Executive Summary

Q2 2025 delivered revenue of $114.3M, gross margin of 4.4%, net income of ~$0.4M, diluted EPS of $0.07, and EBITDA of ~$1.7M, marking the fifth consecutive quarter of positive net income and EBITDA .
Results softened vs Q1 2025 and prior year: revenue fell to $114.3M vs $132.2M in Q1 and $173.3M in Q2 2024; diluted EPS declined to $0.07 vs $0.16 in Q1 and $0.45 in Q2 2024, as the company prioritized higher-margin, selective trades .
Versus S&P Global consensus, Q2 revenue missed ($114.3M vs $189.9M*) and diluted EPS missed ($0.07 vs $2.00*); EBITDA consensus was not available for Q2, but reported EBITDA was ~$1.7M . Values with * are from S&P Global.
Catalysts: management introduced a technology-forward strategy to digitize trading with AI, accelerated focus on restaurant divestiture, and announced a strategic carbon project investment expected to generate 1.1–1.2M credits in its first issuance cycle .

What Went Well and What Went Wrong

What Went Well

Fifth straight profitable quarter with positive net income and EBITDA; gross margin improved 100 bps YoY to 4.4% on mix shift to specialty commodities and Canadian subsidiary trades that historically carry higher margins .
Strategic repositioning continues: new CEO (May 28) and new CFO (Aug 1) bring deep finance and technology backgrounds; management laid out a multi-pillar plan emphasizing AI, margin optimization, and expansion into higher-margin verticals .
ESG/adjacent growth: acquired 37.5% of an Indonesian carbon project with anticipated 1.1–1.2M high-integrity credits in the first issuance, broadening offerings (potential offsets) for clients .

Quote: “By leveraging AI, we can enhance our decision making capabilities across the entire trading lifecycle… predictive analytics… logistics optimization and pricing strategy” — CEO Chagay Ravid .

What Went Wrong

Top-line pressure: revenue decreased 34% YoY as the company selectively pursued trades with more favorable margins; EBITDA and EPS also declined vs Q2 2024 and Q1 2025 on lower volumes .
Cash declined to $0.42M at quarter end from $1.94M in Q1, reflecting reinvestment in trading operations; accounts receivable remained high at $44.1M .
Financing and divestiture timing: raised $2.5M in straight equity due to delays in receivable collections and restaurant sale; restaurant divestiture remains in process, with CEO reaffirming urgency to refocus resources .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$173.3	$132.2	$114.3
Net Income Attrib. to Sadot ($USD Millions)	$2.369	$0.938	$0.389
Diluted EPS ($USD)	$0.45	$0.16	$0.07
EBITDA Attrib. to Sadot ($USD Millions)	$3.474	$2.506	$1.653
Gross Profit ($USD Millions)	$5.788	$6.012	$4.987
SG&A ($USD Millions)	$1.701	$3.081	$2.771

Segment/type breakdown:

Revenue Type ($USD Millions)	Q2 2024	Q1 2025	Q2 2025
Commodity Sales	$173.293	$132.168	$114.338
Other Revenues	$0.000	—	$0.052

KPIs and balance sheet highlights:

KPI / Balance Metric	Q4 2024	Q1 2025	Q2 2025
Transactions Completed (#)	75	76	26
Metric Tons Traded	—	≥200,000 mt	≥200,000 mt
Countries Traded (#)	20	17	7
Working Capital Surplus ($USD Millions)	$20.5 (as of 12/31/24)	$21.9	$24.2
Cash ($USD Millions)	$1.8 (12/31/24)	$1.94	$0.42
Accounts Receivable ($USD Millions)	$18.0 (12/31/24)	$47.8	$44.1

Estimate comparison (S&P Global):

Metric	Actual Q2 2025	Consensus Q2 2025	Surprise
Revenue ($USD Millions)	$114.3	$189.9*	Miss: -$75.6M
Diluted EPS ($USD)	$0.07	$2.00*	Miss: -$1.93
EBITDA ($USD Millions)	$1.653	N/A	—

Values with * are from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Revenue	Near-term	Management target of $150–$200M per quarter (not formal)	No formal guidance; revenue fell as company prioritized higher-margin, selective trades	Maintained target commentary; execution favors margin over volume
Gross Margin (%)	Ongoing	Focus to reach 2–3% range (objective)	Reported 4.4% in Q2 2025; improvement via specialty mix and Canada trades	Performance above stated objective; continued optimization
OpEx (SG&A)	Ongoing	Reclassifications and restructuring underway	SG&A increased due to reclassifying costs from COGS into SG&A	Maintained; accounting reclassification impacts SG&A optics
Tariffs Exposure	Ongoing	Tariffs non-material given global trade footprint	Minimal exposure; can reroute trades to avoid US tariffs if needed	Maintained
Restaurant Divestiture	2025	Multiple parties; valuations broadly unchanged; process continuing	CEO refocused team to complete sale; final stages with several buyers for combined transaction	Accelerated urgency; scope clarified (combined sale)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology Initiatives	Limited mention; focus on operational efficiency and margin goals	Detailed plan to digitize trading with AI/analytics across forecasting, execution, risk, compliance, NLP	Rising emphasis on tech enablement
Supply Chain/Tariffs/Macro	Tariffs viewed non-material due to global trade flows	Minimal US tariff exposure; flexible routing to avoid tariffs	Stable narrative; risk monitored
Product Mix & Margins	Intent to increase margins, expand pulses and specialty crops	Gross margin +100 bps YoY to 4.4%; focus on specialty and Canada trades	Continuing shift to higher-margin mix
Regional Expansion	Canada operations, trades across 17 countries in Q1	Canada cited as driver of higher-margin transactions; 7 countries in Q2	Building regional capabilities
ESG/Carbon Credits	Not highlighted previously	37.5% stake in Indonesian SDG carbon project; expected 1.1–1.2M credits	New initiative
Restaurant Divestiture	Advanced negotiations; valuations intact	Increased urgency; combined sale of MMG and Pokémoto pursued	Accelerating execution focus

Management Commentary

Strategy: “We have the chance of modernizing the tools used to manage the entire food supply chain… leveraging AI… to improve the accuracy of market forecasts… and reduce costly human error” — CEO Chagay Ravid .
Margin and mix: “Gross profit was 4.4% in Q2 2025 versus 3.3% in Q2 2024… focusing on higher margin trades in specialty items and a larger percentage of trades from our Canadian subsidiary” — CFO Paul Sansom .
SG&A framing: “Increase in SG&A was mostly attributable to reclassifying some expenses from cost of goods to SG&A… shifting wages for admin personnel, insurance and other items” — CFO Paul Sansom .
Divestiture focus: “It is imperative… that we divest the restaurants to remove shareholder confusion, reduce costs, generate cash to pay off debt and focus all efforts… we are… in the final stages… with several potential buyers” — CEO Chagay Ravid .
Carbon project: “Expected to generate between 1.1 and 1.2 million high-integrity carbon credits in its first issuance cycle” — Company press release .

Q&A Highlights

Restaurant sale: Management emphasized urgency and progressing final negotiations to sell both chains in a combined transaction to reduce costs and sharpen focus on agri-foods .
Capital raise: The $2.5M equity raise was driven by receivable collection delays and timing of restaurant sale; structured as non-toxic, no warrants .
Tariffs: Exposure is limited; trades predominantly occur outside the US, and Sadot can reroute to avoid tariff impacts when necessary .
Organizational changes: Board/management shifts align with the pivot from restaurants to global food supply chain and technology-led operations .

Estimates Context

Revenue missed S&P Global consensus by ~$75.6M (actual $114.3M vs $189.9M*), reflecting the company’s strategic choice to execute fewer, higher-margin trades and focus on specialty commodities; EPS missed by ~$1.93 (actual $0.07 vs $2.00*) . Values with * are from S&P Global.
EBITDA consensus was unavailable; reported EBITDA attributable to Sadot Group was ~$1.65M .
Given the magnitude of the revenue/earnings miss vs consensus, near-term estimates likely need to adjust lower to incorporate the selective trading strategy, mix shift, and SG&A reclassification impact discussed by management .

Key Takeaways for Investors

Sadot is sustaining profitability while pivoting to a technology-enabled agribusiness; Q2 marks the fifth consecutive positive quarter, even as revenue moderates on margin-first execution .
Margin trajectory is improving (+100 bps YoY to 4.4%) via specialty crop focus and Canada-originated trades, supporting the investment case for mix quality over volume .
Liquidity requires monitoring: cash fell to $0.42M, A/R remains high, and the firm raised $2.5M equity to bridge timing gaps; working capital surplus improved to $24.2M .
The restaurant divestiture is a key de-risking catalyst; successful sale would simplify the story, lower costs, and potentially free cash to reduce debt .
The AI/digitization plan and the carbon project stake broaden strategic optionality and could differentiate Sadot’s trading platform and client offering (offsets) .
Expect estimate revisions: consensus embedded higher volumes; the company’s emphasis on margin quality will likely recalibrate Street models for revenue/EPS . Values with * are from S&P Global.
Near-term trading setup: focus on updates to restaurant sale, progress in AI initiatives, and execution within pulses/specialty crops; watch tariffs (management views non-material) and working capital dynamics .

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

Sadot Group Inc. (SDOT)·Q2 2025 Earnings Summary