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Sadot Group Inc. (SDOT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 collapsed operationally: revenue fell to $0.289M from $114.39M in Q2 and $200.91M in Q3 2024, driven by receivables collection issues that limited commodity credit trades, producing a net loss of $(15.19)M and negative EBITDA of $(14.35)M .
  • Massive misses vs S&P Global consensus: revenue $0.289M vs $180.4M consensus and diluted EPS $(17.38) vs $2.10 consensus; prior quarter also missed revenue and EPS, while Q1 beat EPS *.
  • Strategic pivot accelerating: new CEO (May 28) and CFO (Aug 1) instituted cost cuts and began asset monetization (restaurant unit); Board reconstituted Oct 29-30 to review whether agri-food supply chain remains core, citing geopolitical and climate risks .
  • Liquidity tight: cash fell to $0.581M and working capital swung to a $(1.5)M deficit; company raised small secured financing on Oct 29 at 10% and regained Nasdaq bid price compliance Oct 10 .
  • Near-term stock catalysts revolve around strategic review outcomes, receivables recovery, restaurant divestiture timing, and validation/monetization path for Indonesia carbon project credits .

What Went Well and What Went Wrong

What Went Well

  • Management decisively initiated cost cutting and asset monetization, explicitly targeting restaurant divestiture to reduce costs, pay down debt, and focus on agri-business .
  • Corporate governance refresh: Board expanded then reconstituted with new directors; Audit Committee chaired by a designated audit committee financial expert; CEO added to the Board .
  • Strategic optionality: acquired 37.5% stake in Indonesia carbon project expected to issue 1.1–1.2M high-integrity carbon credits, aiming to create offset offerings for clients .
    • CEO: “We began implementing cost cutting measures across the board, concurrently with its aim to monetize assets including that of the restaurant operating unit.”
    • CEO (Q2 call): “A forward looking digital strategy has the potential to position Sadot Group...as a technology enabled company...”

What Went Wrong

  • Severe receivables collection issues at Sadot LLC curtailed commodity-based credit trades; revenue collapsed to $0.289M, driving gross loss and extreme negative margins .
  • Liquidity and working capital deteriorated: cash fell to $0.581M and working capital turned to $(1.5)M deficit; required 10% secured note financing across all assets in Oct .
  • Estimate misses: Q3 revenue and EPS dramatically missed S&P consensus; Q2 also missed on revenue and EPS despite prior multi-quarter profitability streak *.

Financial Results

Quarterly Actuals (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$200.91 $132.17 $114.39 $0.289
Diluted EPS ($)$3.65 $0.16 $0.08 $(17.38)
Net Income ($USD Millions)$1.16 $0.94 $0.39 $(15.19)
EBITDA ($USD Millions)$2.86 $2.388 (EBITDA) / $2.506 (SGI attrib.) $1.550 (EBITDA) / $1.653 (SGI attrib.) $(14.351) (EBITDA) / $(14.278) (SGI attrib.)
Net Income Margin (%)0.5% 0.6% 0.3% (5281.0)%
EBITDA Margin (%)1.5% 1.9% 1.4% (4940.5)%

Note: Q3 2025 press highlights state diluted EPS loss $(17.42) vs statement of operations diluted $(17.38)—minor discrepancy .

Actuals vs S&P Global Consensus

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$132.17 $114.39 $0.289
Revenue Consensus Mean ($USD Millions)$171.91*$189.90*$180.40*
Diluted EPS Actual ($)$0.16 $0.08 $(17.38)
Primary EPS Consensus Mean ($)$(4.35)*$2.00*$2.10*
  • Values retrieved from S&P Global.

Balance Sheet Snapshot

Metric ($USD Millions)Dec 31, 2024Mar 31, 2025Jun 30, 2025Sep 30, 2025
Cash$1.786 $1.940 $0.422 $0.581
Accounts Receivable (net)$18.01 $47.75 $44.14 $29.05
Total Current Assets$152.68 $71.80 $118.72 $47.67
Total Current Liabilities$132.17 $49.93 $94.53 $49.14
Working Capital$20.51 $21.87 $24.19 $(1.47)

KPIs and Operating Metrics

KPIQ1 2025Q2 2025Q3 2025
Transactions Completed76 26 n/a
Metric Tons Shipped>0.2M >0.2M n/a
Gross Profit ($USD Millions)$6.012 $4.987 $(6.341)
Working Capital$21.9M surplus $24.2M surplus $1.5M deficit

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidanceFY/Q4 outlookNone disclosedNone disclosed; Board reviewing strategic focus (agri-food vs alternatives)Maintained (no formal guidance)
Strategic actionsNear-termOngoing restaurant divestiture processCost cuts; asset monetization incl. restaurants; receivables remediation; Board-led strategic reviewRaised focus on restructuring
Capital/financingNear-termn/a$238,987.87 secured note at 10% (matures Oct 29, 2026)New financing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesNone noted in Q1 releaseCEO outlined AI-driven trading, predictive analytics, NLP, algorithmic pricing vision No Q3 call; press focused on restructuringVision intact, execution pending
Supply chain operationsExpanded geographies; Sadot Korea trade; Canada services agreement 26 transactions across 7 countries; margin mix shift to specialty/Canada Receivables issues halted credit trades at Sadot LLC Deterioration in Q3
Tariffs/macroNot discussedCFO: limited US exposure; ability to reroute trades; low tariff impact Macro/geopolitical and climate risks cited in Board review Risk awareness rising
Product performance/marginsQ1: revenue +24.1% YoY; EBITDA $2.5M Gross margin 4.4%; 100 bps YoY improvement Gross loss and extreme negative margins Sharp negative inflection
Regulatory/listingn/an/aRegained Nasdaq bid price compliance Oct 10 Positive compliance milestone
Strategic portfolio (restaurants)Business segment still presentCEO intent to divest; in final-stage buyer diligence Monetization emphasized; Board reviewing core focus Accelerating divest/strategic review
Capital & liquidityWorking capital surplus $21.9M Working capital surplus $24.2M; small equity raise Working capital deficit $(1.5)M; secured note financing Liquidity strain

Management Commentary

  • CEO on Q3 problems: “Sadot Group’s largest operating unit, Sadot LLC, encountered significant issues with collecting on certain receivables. This limited Sadot’s ability to enter into commodity-based credit trades.”
  • Restructuring thrust: “The Company began implementing cost cutting measures across the board, concurrently with its aim to monetize assets including that of the restaurant operating unit.”
  • Strategic review scope: Board will consider whether agri-food supply chain remains strategic given geopolitical and climate risks; financing commitments enable review .
  • Q2 strategic vision: “By leveraging AI, we can enhance our decision-making...predictive analytics...AI-driven automation...NLP...position Sadot Group...as a technology enabled company” .

Q&A Highlights

  • Restaurant divestiture: CEO acknowledged slow sale progress; refocusing team to complete combined sale of Muscle Maker Grill and Pokémoto to reduce costs, eliminate confusion, and pay down debt .
  • Capital raise rationale: Straight equity to bridge receivables collection delays and restaurant sale timing; “non-toxic deal without warrants” .
  • Tariffs: CFO noted minimal US exposure and global rerouting capability to mitigate tariffs .
  • Board/management changes: CEO framed shifts as natural for pivot to global food supply chain, requiring finance and tech skill sets .

Estimates Context

  • Q3 2025: Revenue $0.289M vs $180.4M consensus; diluted EPS $(17.38) vs $2.10 consensus—bold miss on both lines as receivables issues froze trading capacity *.
  • Q2 2025: Revenue $114.39M vs $189.90M consensus; diluted EPS $0.08 vs $2.00 consensus—miss driven by selective higher-margin trades reducing volume *.
  • Q1 2025: Diluted EPS $0.16 vs $(4.35) consensus—beat; revenue $132.17M vs $171.91M consensus—miss, but EBITDA positive *.
  • FY 2025 consensus revenue $723.63M and EBITDA $2.46M appear stale given Q3 collapse; estimate revisions likely downward after Q3 print*.
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Receivables collections are the core operational risk; recovery and credit counterparties will determine near-term trading capacity and revenue normalization .
  • Liquidity is constrained (cash $0.581M; working capital deficit); expect continued financing actions until receivables convert and assets are monetized .
  • Strategic review could culminate in business model changes; monitor Board decisions on agri-food focus, potential exits, or pivots (including carbon projects) .
  • Watch restaurant divestiture timeline as a de-leveraging and cost-cut catalyst; CEO is pushing to close combined transaction .
  • Indonesia carbon project is a potential non-core monetization or strategic option; validation and marketability of credits are key milestones .
  • Given extreme misses vs consensus, expect estimate cuts; trading positions should be sized for headline risk around receivables/strategic outcomes *.
  • Governance refresh (new Board, audit expertise) supports oversight during transition; execution on cost cuts and risk controls will be the proof point .