Executive Summary

Q2 2024 revenue fell 65.9% YoY to $7.017M as capital available for cell phone sales was reduced following repayment of a convertible note; sequentially, revenue declined 27.1% vs Q1 2024 ($9.620M) .
Net income swung to $4.449M from a loss of ($8.853M) YoY, driven by balance sheet actions (notably, a $7.427M gain on extinguishment of liabilities and the elimination of warrant-related losses), while Adjusted EBITDA remained negative at ($0.836M) .
Gross margin expanded to 25.3% from 12.3% YoY due to strategic mix/operating improvements and lower SG&A (-26.6% YoY), even as top-line contracted materially .
No Q2 earnings call transcript was found and the company did not issue formal forward guidance in the Q2 press release; focus remains on Forever 8 growth, product expansion (refurbished iPads, AirPods, Watch), and Nasdaq compliance actions (reverse split plan) as potential stock catalysts .

What Went Well and What Went Wrong

What Went Well

Balance sheet reset and equity build: Management cancelled $7.4M in liabilities and $15.6M owed to former Forever 8 members (including $6.1M earnout, $5.4M promissory notes, $3.0M interest), and converted $1.1M interest to equity, eliminating 5.85M dilutive shares tied to warrants/convertibles .
Profitability optics improved: Gross margin rose to 25.3% (from 12.3%) and SG&A fell to $3.461M (-26.6% YoY); GAAP net income reached $4.449M vs loss ($8.853M) YoY, aided by one‑time gains .
Strategic focus and category expansion: Management emphasized prioritizing Forever 8 and expanding refurbished Apple categories (iPads, AirPods, Watch, Pencil) to meet demand and drive growth. Quote: “The Company continues to focus on prioritizing the Forever 8 business… [and]… has made significant progress… improving its financial condition” .

What Went Wrong

Material top-line contraction: Revenue decreased to $7.017M from $20.547M YoY, principally due to reduced capital available for mobile phone sales after note repayment; sequential revenue also declined from $9.620M in Q1 2024 .
Core operating loss persisted: Operating loss remained ($1.683M) in Q2 2024 (vs ($2.764M) YoY); Adjusted EBITDA stayed negative at ($0.836M), indicating underlying operations are not yet breakeven absent one‑offs .
Estimates/call transparency lacking: No S&P Global consensus was available for OCTO and no Q2 earnings call transcript was found, limiting external benchmark and Q&A clarity (press release furnished without guidance); S&P Global consensus unavailable via tool.

Financial Results

Headline P&L (chronological: oldest → newest)

Metric (USD)	Q2 2023	Q1 2024	Q2 2024
Revenues	$20.547M	$9.620M	$7.017M
Gross Profit	$2.530M	$1.886M	$1.778M
Gross Profit Margin %	12.3%	19.6%	25.3%
SG&A	$4.718M	$3.462M	$3.461M
Total Operating Expenses	$5.294M	$4.877M	$3.461M
Operating Income (Loss)	($2.764M)	($2.991M)	($1.683M)
EBITDA	($5.483M)	$3.746M	$6.385M
Adjusted EBITDA	($1.907M)	($0.795M)	($0.836M)
Net Income (Loss)	($8.853M)	$4.948M	$4.449M

Notes: Q2 2024 EBITDA includes non‑operating impacts (e.g., gain on extinguishment of liabilities); Adjusted EBITDA excludes specified items per reconciliation .

Variance Analysis (Q2 2024)

Revenue: YoY −65.9% = ($7.017M − $20.547M)/$20.547M; Seq −27.1% = ($7.017M − $9.620M)/$9.620M .
Gross margin: +13.0 ppt YoY (25.3% vs 12.3%); +5.7 ppt Seq (25.3% vs 19.6%) .
Adjusted EBITDA margin: −11.9% = ($−0.836M / $7.017M); prior YoY −9.3% ($−1.907M/$20.547M); Seq −8.3% ($−0.795M/$9.620M) .

Results vs Estimates

Metric	Q2 2024 Actual	Wall St. Consensus (S&P Global)	Delta
Revenue	$7.017M	N/A (unavailable)*	N/A
EPS	N/A (not disclosed in release)	N/A (unavailable)*	N/A

*Consensus values unavailable via S&P Global for OCTO (missing mapping in S&P Global data access).

Segment Breakdown

Not disclosed in Q2 press release; no segment detail provided in the Q2 releases reviewed .

KPIs and Capital Actions

KPI / Action	Value / Detail	Source
Cumulative Forever 8 refurbished Apple smartphone revenue since Apr-2021	$100.0M
Product expansion (refurbished Apple)	Added iPads, AirPods, Apple Watch, Pencil
Shares outstanding (as of 7/15/24)	~8.8M
Dilutive securities eliminated	5,846,627 shares tied to warrants/convertibles cancelled
Liabilities cancelled/converted (H1’24)	$7.4M liabilities; $15.6M to former Forever 8 members (incl. $6.1M earnout, $5.4M notes, $3.0M interest); $1.1M interest converted to equity

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue, margins, OpEx, OI&E, tax, dividends	FY/Quarter (not specified)	—	No formal guidance issued in Q2 2024 press release	Maintained: No formal guidance

Note: No separate Q2 2024 guidance press release or earnings call guidance commentary was available in the reviewed materials.

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found. Themes below reflect press releases and shareholder updates.

Topic	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Balance sheet restructuring	Highlighted elimination of $23M+ of obligations, removal of warrant-related overhang	Continued emphasis; Q2 included $7.427M gain on extinguishment of liabilities	Ongoing improvement
Capital availability	Q1 revenue impact tied to reduced capital post note repayment	Q2 YoY revenue decline linked to reduced capital for phone sales	Constraint persists near term
Forever 8 focus	Strategic pivot to Forever 8; simplified cost structure	Reaffirmed Forever 8 prioritization	Consistent
Product expansion	Expanded into iPads, AirPods, Apple Watch, Pencil	Reinforced refurbished Apple focus; cumulative $100M smartphone revenue milestone	Expansion narrative building
Nasdaq compliance	Reverse split plan (1-for-5) to meet $1 bid requirement; panel extension to Aug 23, 2024	Continued listing efforts referenced across releases	De-risking listing, execution required

Management Commentary

“The Company continues to focus on prioritizing the Forever 8 business in providing inventory capital for e-commerce sellers and refurbished apple product sellers... [and] made significant progress in the first half of 2024 improving its financial condition” — Paul Vassilakos, CEO .
“We are excited to have reached this milestone of $100 million in revenue from our refurbished Apple smartphone division...” — Paul Vassilakos .
“Given the high pricetag for brand new Apple products, the demand for refurbished products is strong… We are excited to be a contributor and will continue to focus on expanding our offering” — Paul Vassilakos .
On listing/compliance: Nasdaq panel granted continued listing subject to closing bid ≥ $1.00 for 10 days; company sought approval for a 1-for-5 reverse split to satisfy the condition .

Q&A Highlights

No Q2 2024 earnings call transcript was found; therefore, no Q&A themes or clarifications are available from a conference call for this quarter.

Estimates Context

S&P Global (Capital IQ) consensus estimates for OCTO were unavailable via our data access for Q2 2024; as a result, we cannot benchmark reported revenue or EPS to consensus for this period (tool returned missing mapping). This limits external validation of beats/misses for Q2 2024.
Given the magnitude of non-GAAP impacts (e.g., $7.427M gain on extinguishment), we would expect analysts (where coverage exists) to focus on Adjusted EBITDA trajectory and capital availability for revenue re-acceleration .

What Drove the Quarter (Why)

Revenue decline was primarily a function of reduced capital available for cell phone sales following repayment of the convertible note; this strategic choice pressured top-line but improved equity and reduced dilution risk .
Net income benefited from one-time items, including a $7.427M gain on extinguishment of liabilities and the absence of prior-year warrant losses tied to a retired convertible note .
Gross margin expansion and SG&A reduction reflect focus on core Forever 8 operations and cost discipline, offsetting part of the volume-driven revenue decline .

Key Takeaways for Investors

The optics of profitability improved on GAAP due to one-time gains, but Adjusted EBITDA remains negative; sustained operating improvement will depend on restoring capital capacity to support Forever 8 growth .
The strategic trade-off—cleaner balance sheet vs lower near-term revenue—appears deliberate; watch for incremental funding capacity or partnerships to re-accelerate refurbished device throughput .
Product expansion beyond iPhones (iPads, AirPods, Watch) aims to broaden addressable inventory financing opportunities within the refurbished Apple ecosystem .
Listing risk is a near-term overhang; successful execution of reverse split/compliance plan reduces perceived financing and liquidity risks .
Without available Street estimates and no call transcript, the stock may trade more on corporate actions (capital/financing updates, listing milestones) and operational KPIs than on traditional beat/miss constructs .
Monitor sequential Adjusted EBITDA and gross margin, given improving mix/discipline but lower volumes; turning Adj. EBITDA positive would be a meaningful inflection .

Appendix: Detailed Financial Tables

Reconciliation Details (Non-GAAP context)

Item (USD)	Q2 2024	Q2 2023
Net Income (Loss)	$4.449M	($8.853M)
Interest (Income) Expense, net	$1.324M	$2.736M
Income Tax Expense	$0.000M	$0.000M
Depreciation & Amortization	$0.613M	$0.634M
EBITDA	$6.385M	($5.483M)
Stock-based Compensation	$0.206M	$0.189M
Loss on Issuance of Warrants	$0.000M	$3.388M
Gain on Extinguishment of Liabilities	($7.427M)	$0.000M
Adjusted EBITDA	($0.836M)	($1.907M)

Prior Quarter Reference (Q1 2024)

Metric (USD)	Q1 2024
Revenue	$9.620M
Gross Profit	$1.886M
Gross Margin %	19.6%
SG&A	$3.462M
Operating Loss	($2.991M)
EBITDA	$3.746M
Adjusted EBITDA	($0.795M)
Net Income	$4.948M

Sources: Q2 2024 earnings press release and 8-K (including Item 2.02 and Exhibit 99.1) , July 23, 2024 8-K (Forever 8 $100M milestone) , April 17, 2024 8-K (product expansion) , July 16, 2024 shareholder update (Q1 2024 detail, listing plan) .

Eightco Holdings Inc. (OCTO)·Q2 2024 Earnings Summary