Sadot Group Inc. (SDOT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered fourth consecutive profitable quarter: Revenue $132.2M, Net Income $0.9M, EBITDA $2.5M, Diluted EPS $0.18, with EBITDA margin 1.9% and net income margin 0.6% .
• Versus S&P Global consensus for Q1 2025: EPS materially beat (actual $0.18 vs consensus -$4.35*), while revenue missed (actual $132.168M vs consensus $171.905M*); no published EBITDA consensus was available for Q1 2025* .
• Operational execution: 76 trades across 17 countries; first trade from newly established Sadot Korea; signed a fee-based pet food ingredients management contract in Canada with no associated COGS .
• Leadership transition: CEO Catia Jorge to step down June 1; David Hanna initially named Interim CEO (June 2), then Chagay Ravid appointed CEO effective May 28, 2025—introducing a tech/AI lens alongside core commodities strategy .

Values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Revenue grew 24.1% YoY to $132.2M, with EBITDA up to $2.5M and a swing to positive net income of $0.9M; diluted EPS improved to $0.18 from -$0.06 YoY .
• Strong execution breadth: 76 transactions across 17 countries; new Sadot Korea trade between Australia, Kenya and others; fee-based Canadian pet food ingredients agreement enhances gross margin without COGS .
• Management emphasized resilience to tariff shifts: “we do not believe tariffs will have a significant material impact on Sadot… costs usually passed through 100%” .

What Went Wrong

• Revenue tracked below S&P Global consensus in Q1 ($132.168M actual vs $171.905M* consensus), highlighting top-line variance relative to expectations* .
• SG&A increased to $3.1M (+$1.7M YoY) due to reclassification of expenses from COGS and shifting wages/insurance—pressure on operating costs despite rationale .
• Restaurant divestiture taking longer than anticipated; while Q1 discontinued operations posted $0.107M net income, the sale process continues with an LOI being finalized .

Values marked with * are retrieved from S&P Global.

Financial Results

Quarterly Financials vs Prior Periods

Q1 2025 Results vs S&P Global Consensus

Values marked with * are retrieved from S&P Global.

Segment/KPI Snapshot (Q1 2025)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CFO Jennifer Black: “Our Sadot Agri-Foods revenue was $132.2 million in Q1… Net income attributable to Sadot Group improved to $0.9 million… EBITDA rose to $2.5 million… SG&A… increased… mostly attributable to reclassifying some expenses from cost of goods sold to SG&A… shifting wages… insurance…” .
• Interim CEO David Hanna (June 2, 2025 effective): “We need to take a hard look at how we improve our balance sheet and income statements within a controlled growth plan… I can bring… operational efficiencies and cost cutting” .
• On tariffs: “We do not believe tariffs will have a significant material impact… costs… are usually passed through 100%… revenue… mostly generated by agri commodity trade between countries all over the world” .
• On margin mix: “Higher margins are more achievable… pulses… sesame seeds… [and] a fee-based… pet food… contract… contributes fully to gross margin” .
• Leadership update: “Catia Jorge has submitted her voluntary resignation… David Hanna… named Interim CEO” ; “Sadot Group appoints Chagay Ravid as new Chief Executive Officer… will review AI and tech opportunities connected to commodities” .

Q&A Highlights

• Tariffs impact: Management reiterated minimal direct exposure due to non-U.S. origin/destination trades and pass-through nature of costs; vigilance maintained .
• Margin strategy: Focus shifting to containerized specialty crops (pulses, sesame) and fee-based services to structurally improve gross margin profile .
• SG&A reclassification: Clarified movement of expenses from COGS to SG&A to better reflect cost structure, explaining YoY SG&A increase .
• Restaurant divestiture: Progress acknowledged; LOI being finalized; continued expansion of Pokémoto locations with 41 open and ~60 sold franchises not yet opened .
• Liquidity/capital deployment: Working capital of $21.9M; continuing to reinvest cash into trading to drive growth and asset acquisition .

Estimates Context

• Q1 2025: EPS beat S&P Global consensus materially (actual $0.18 vs -$4.35*), while revenue missed (actual $132.168M vs $171.905M*); EBITDA actual $2.506M reported, with no published consensus available*. This divergence suggests stronger profitability than modeled—likely from mix, fee income, and non-GAAP EBITDA uplift—even as volume/pricing came in below consensus top-line* .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

• Profitability is stabilizing: fourth consecutive profitable quarter with EBITDA margin expanding to 1.9% and NI margin at 0.6% .
• Near-term setup: EPS outperformance versus consensus despite revenue under-shoot can catalyze estimate revisions toward profitability resilience* .
• Margin mix pivot: Specialty crops and fee-based contracts should support gross margin accretion even if volumes fluctuate .
• Liquidity improving: Working capital surplus rose to $21.9M; disciplined reinvestment into trading supports revenue growth and potential asset acquisitions .
• Corporate actions: Leadership changes (Ravid as CEO) introduce technology and AI-linked opportunities complementing core commodities; monitor strategic announcements and capital markets engagement .
• Restaurant monetization: Extended timeline but progressing (LOI underway); watch for divestiture milestones and proceeds/use of capital .
• Risk monitor: SG&A reclassification elevates reported OpEx; interest expense ($1.541M) warrants continued focus on financing costs and trade finance optimization .

Values marked with * are retrieved from S&P Global.