Executive Summary

Q3 2024 net revenue was $15.5M, down 12% year-over-year, while gross margin improved sequentially to 41.2% (from 36.6% in Q2), and Adjusted EBITDA turned positive at $0.7M, reflecting cost discipline and mix improvements .
Reported net loss was $6.3M due largely to a non-cash fair value share adjustment; management highlighted ~$3M run-rate cost optimization identified via the shared services platform .
Execution highlights: Winona Popcorn Spray +60% YoY growth with distribution expanding across major retailers; Whipshots expanded to 47 states with Kroger (1,257 points), Costco, Dave & Buster’s, and collaboration with Kahlúa; Skylar’s subscription base ~10k monthly with Costco orders; Soylent retail expansion (Walmart, Meijer, Publix, Kroger) and strong Amazon share .
Catalysts into 2025: targeted distribution expansions (Target in Q1–Q2, club channel), new product pipeline, and disciplined marketing spend underpin confidence in profitable growth trajectory .

What Went Well and What Went Wrong

What Went Well

Sequential margin expansion: gross margin improved to 41.2% (Q3) vs 36.6% (Q2), driven by cost management and mix, and Adjusted EBITDA turned positive at $0.7M .
Distribution wins and brand momentum: “We’ve identified and removed approximately $3 million in cost optimization opportunities… Looking ahead to 2025, we’re well-positioned… through our robust new product pipeline and targeted distribution expansion” — Ross Sklar, CEO .
Winona scaling: “Winona continues to demonstrate exceptional growth… showing over 60% growth year-over-year… achieving 10% market share despite only 30% ACV… distribution is set to double at a minimum in 2025” .

What Went Wrong

Top-line decline YoY: Q3 net revenue fell to $15.5M from $17.7M YoY due to Whipshots prior-year inventory stocking and retailer set changes in RTD meal replacements; targeted reductions in inefficient e-commerce spend at Soylent also weighed on revenue .
Non-cash headwind: Q3 reported net loss of $6.3M was primarily driven by fair value share adjustment (non-cash) elevating YoY loss comparisons .
Liquidity remains tight: cash of ~$1.6M and inventory of ~$13.2M at quarter-end; prior filings flagged going-concern risks and upcoming debt maturities, underscoring the importance of operational execution and financing plans .

Financial Results

Core P&L and Balance Metrics (USD Millions unless noted)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($)	$15.491	$15.6	$15.5
Gross Profit ($)	$7.014	$5.7	$6.4
Gross Margin (%)	45.3% (derived from GP/Rev)	36.6%	41.2%
Adjusted EBITDA ($)	N/A	$(1.252)	$0.658
Net Income ($)	$(4.271)	$(11.561)	$(6.257)
Diluted EPS ($)	$(0.01)	N/A	N/A
Cash and Equivalents ($)	$1.767	~$2.0	~$1.6
Inventory ($)	$11.261	~$13.2	~$13.2

Notes: EPS not disclosed for Q2/Q3 in press releases; Adjusted EBITDA is non-GAAP as defined in company materials .

Year-over-Year context (selected Q3 YoY)

Revenue: $15.5M vs $17.7M in Q3 2023 .
Gross Profit: $6.4M vs $7.7M in Q3 2023 .
Gross Margin: 41.2% vs ~44% in Q3 2023 (management commentary) .

Segment context

Quarterly segment detail for Q3 was not disclosed. For Q2 (context): Starco Brands segment net revenues $2.1M, gross profit $1.1M; Skylar net revenues $1.9M, gross profit $1.3M; Soylent net revenues $11.6M, gross profit $3.3M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Distribution footprint (Winona)	FY 2025	Not provided	Distribution “set to double… in 2025”; Target rollout planned in Q1–Q2; pursuing club channel	Raised (qualitative)
Margin trajectory	Near term	Not provided	Emphasis on sequential margin improvement via mix and cost discipline	Positive qualitative trajectory
AOS retail/e-commerce	Q4 2024–FY 2025	Not provided	AOS protein at Kroger divisions; costco.com availability starting Dec 18; broader 2025 expansion	Initiated (qualitative)
Soylent channels/KPIs	FY 2025	Not provided	Focus on retail expansion, subscription growth, e-commerce optimization	Maintained growth focus

No formal quantitative revenue, margin, OpEx, OI&E, or tax rate guidance was provided in Q3 materials .

Earnings Call Themes & Trends

Topic	Q1 2024 (prior)	Q2 2024 (prior)	Q3 2024 (current)	Trend
Gross margin	Strong GP; implied margin ~45% (Rev $15.49M, GP $7.01M)	Margin 36.6%; mix headwinds (Whipshots destocking)	Margin 41.2%; sequential improvement	Improving sequentially
Cost optimization	Shared services in build-out	Integration and efficiency initiatives underway	~$3M run-rate cost optimization identified and actioned	Executing
Distribution expansion	Ongoing retail wins across brands	Kroger, Costco, Dave & Buster’s; Winona retailers expanding	Winona doubling distribution in 2025; Target rollout; Whipshots in 47 states; AOS on costco.com	Accelerating
Subscription / D2C KPIs	n/a	Skylar & Soylent highlighted in PRs	Skylar ~10k subscribers (CAC ~$30, LTV ~$330); Soylent CAC ~$60, LTV ~$1,400; strong Amazon share	Scalable unit economics
Brand collaborations	n/a	Q2 set-up for H2 partnerships	Whipshots x Kahlúa nationwide; menu presence at Dave & Buster’s	Expanding

Management Commentary

“Our third quarter showed strong operational and financial progress, delivering positive Adjusted EBITDA and sequential margin improvement through effective cost management and expanded distribution channels… [and] approximately $3 million in cost optimization opportunities” — Ross Sklar, CEO .
“Winona… showing over 60% growth year-over-year… achieving 10% market share despite only 30% ACV… distribution is set to double at a minimum in 2025” .
“Whipshots… now available in 47 states and D.C… Kroger partnership securing 1,257 distribution points… Costco program… Dave & Buster’s featuring Whipshots” .
“Soylent… ~15% cost savings via logistics reorganization; strong subscription LTV/CAC; Amazon meal replacement share ~23.6% with ROAS ~4.5x” .

Q&A Highlights

No analyst questions were recorded on the Q3 call; the presentation concluded after prepared remarks .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue was unavailable due to data access limitations; therefore, estimate comparisons could not be made in this recap. Estimates via S&P Global were unavailable at the time of analysis.

KPIs and Operating Highlights

KPI	Q3 2024 Detail
Winona Popcorn Spray	>60% YoY growth; ~10% market share with ~30% ACV; velocity ~2x category; national expansion into Albertsons (~2,200) and Sobeys (~2,200); Target rollout planned Q1–Q2 2025 .
Whipshots	47 states + D.C.; Kroger 1,257 points of distribution; Costco program; menu placement at Dave & Buster’s (162 locations); national Kahlúa collaboration .
Skylar	~10,000 monthly subscribers; ~600,000 opt-in emails; CAC ~$30; gross LTV ~$330; Costco order strength; retail relationships (Sephora, Nordstrom, Macy’s, Anthropologie) .
Soylent	CAC ~$60; gross LTV ~$1,400; Complete Protein powder repurchase rate 62.9%; Amazon meal replacement share ~23.6%; ROAS ~4.5x; retail expansion (Walmart, Meijer, Publix, Kroger) .

Key Takeaways for Investors

Sequential margin recovery and positive Adjusted EBITDA signal improving operational execution despite YoY revenue declines; focus on sustaining 40%+ gross margins via mix and cost discipline .
Non-cash fair value share adjustment drove reported losses; underlying operating trends (distribution growth, subscription KPIs) are healthier than GAAP net loss suggests .
Distribution momentum (Target, club, Kroger/Costco expansions) and collaboration (Kahlúa) provide near- to medium-term catalysts for revenue normalization in 2025 .
Liquidity remains a watch item; execution on cost savings and working capital discipline, plus financing plans, are critical to de-risking balance sheet constraints .
Winona’s multi-aisle potential and superior velocity metrics indicate outsized retail opportunity; monitor shelf expansion and repeat rates through 2025 .
Skylar and Soylent exhibit attractive LTV/CAC dynamics, supporting investment in subscription and D2C channels with favorable paybacks .
Near-term trading: headlines on new retail authorizations and holiday promotions (AOS on costco.com, collaborations) may drive sentiment; medium-term thesis hinges on executing distribution adds and maintaining margin discipline .

Source Documents

Q3 2024 8-K and Exhibits (Press Release and Call Transcript) .
Q3 2024 Earnings Press Release .
Q3 2024 Earnings Call Transcript .
Q2 2024 Press Release (for prior-quarter context) .
Q1 2024 Form 10-Q (for prior-quarter context) .

Starco Brands, Inc. (STCB)·Q3 2024 Earnings Summary