Executive Summary

Q1 2025 revenue rose 52.4% year over year to $28.7M, with gross profit up 51.1% to $8.5M (29.6% margin); net loss narrowed to $0.4M ($-0.02 EPS), driven by strong organic growth (+11.2% in the Stran segment) and contribution from Stran Loyalty Solutions (SLS) following the Gander Group asset acquisition .
The Stran segment’s gross margin expanded to 32.4% (from 29.8%), partially offset by lower-margin SLS (21.8%), yielding a blended margin of 29.6% .
Operations and reporting cadence normalized (reaudit complete), NetSuite ERP launched in January and is delivering automation and real-time visibility; management reiterated focus on margin expansion and disciplined OpEx control in 2025 .
Liquidity remained solid with ~ $12.2M in cash, cash equivalents and investments; management intends to resume the previously authorized $10M buyback (~$6M remaining) post blackout windows, positioning capital allocation as a potential near-term catalyst .
Wall Street consensus (S&P Global) for Q1 2025 was not available for EPS or revenue at query time, so estimate-beat/miss framing is unavailable; we anchor analysis to reported actuals [GetEstimates Q1 2025].

What Went Well and What Went Wrong

What Went Well
- Organic growth and SLS contribution: Revenue +52.4% YoY to $28.7M, with Stran segment organic growth of 11.2% and SLS revenue of $7.8M from the Gander acquisition .
- Margin resiliency with mix headwind: Stran segment GP margin improved to 32.4% (from 29.8%) even as blended gross margin held ~flat at 29.6% given SLS’s lower margin profile (21.8%) .
- Execution and systems: “The successful implementation of our NetSuite ERP system in January... already delivering meaningful gains in automation, real-time visibility, and centralized process control” — CEO Andy Shape .
What Went Wrong
- Margin mix headwind: Consolidated GP margin dipped slightly to 29.6% (from 29.8%) due to the lower-margin SLS mix despite Stran’s margin expansion .
- Elevated OpEx and non-recurring costs: General & administrative expense rose to $9.0M (+43.6% YoY), including ~$0.8M Q1 legal/accounting costs tied to 2024 compliance/re-audit, though management expects these to decline through 2025 .
- Control environment still under remediation: Q1 10-Q cites ongoing material weaknesses (complex accounting, review controls, tax provision, AR/unearned revenue/inventory/cost of sales, related-party disclosures, and IT general controls) .

Financial Results

Metric	Q1 2024	Q3 2024	Q1 2025
Revenue ($USD Millions)	$18.827	$20.144	$28.694
Gross Profit ($USD Millions)	$5.614	$5.952	$8.482
Gross Margin %	29.8%	29.5%	29.6%
Operating Expenses ($USD Millions)	$6.279	$8.136	$9.017
Loss from Operations ($USD Millions)	$(0.665)	$(2.184)	$(0.535)
Net Income (Loss) ($USD Millions)	$(0.487)	$(2.038)	$(0.393)
Diluted EPS ($)	$(0.03)	$(0.11)	$(0.02)

Note: The company did not disclose standalone Q4 2024 quarterly results in the materials reviewed; Q3 2024 is shown as the most recent prior quarter. The FY 2024 press release and call focused on annual results .

Segment breakdown (Q1 2025 vs prior year):

Segment	Q1 2024 Revenue ($M)	Q1 2025 Revenue ($M)	Q1 2024 Gross Profit ($M)	Q1 2025 Gross Profit ($M)	Q1 2024 GP %	Q1 2025 GP %
Stran	$18.827	$20.935	$5.614	$6.791	29.8%	32.4%
Stran Loyalty Solutions (SLS)	$0.000	$7.759	$0.000	$1.691	n/a	21.8%

Product/category KPIs:

KPI Revenue	Q1 2024 ($M)	Q1 2025 ($M)
Promotional products - dropshipping	$8.412	$9.185
Promotional products – bulk dropshipping	$5.765	$6.331
Promotional products – Company owned inventory	$2.599	$2.894
Casino continuity program	$0.000	$7.368
Promotional products – third-party distributor	$1.674	$2.595
Rewards program	$0.285	$0.226
Additional services	$0.092	$0.095

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total revenue / EPS / margin guidance	FY 2025	None disclosed	None disclosed in Q1 materials	Maintained: no formal guidance
Reaudit/compliance-related costs	FY 2025	2024 expenses were “multimillions”	Expect “significant drop” in 2025; Q1 had ~ $0.8M legal/accounting	Lowering (qualitative)
Share repurchase program	2025	$10M authorization; ~$6M remaining available; paused in 2024 due to restrictions	Plan to resume repurchases when window opens; subject to blackout/liquidity limits	Reinstating
Dividends	2025	None	None	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
ERP/Technology	NetSuite prep and January 2025 launch targeted (Q4 call)	NetSuite ERP launched in January; “game changer” with automation and visibility	Execution improving; scalability up
Tariffs/Supply chain	Vendor cost pressures impacted margins (Q3)	Detailed tariff mitigation: diversify sourcing (Vietnam, Cambodia, Taiwan, India, Bangladesh, USA), price negotiations, contracts allow pass-through where applicable	Active mitigation; exposure managed
Segment mix (SLS)	Gander assets acquired; lower margin profile noted (Q4 call)	SLS contributed $7.8M revenue at 21.8% margin; Stran segment margin expanded to 32.4%	Scale building; mix dilutive but narrowing
Compliance/Nasdaq	Listing extension granted; filings updated (Q3 PR)	Reaudit behind; timely reporting restored; material weaknesses still under remediation	Compliance normalizing; controls improving
Capital allocation	Plan to resume $10M buyback with ~$6M remaining (Q4 call)	Reaffirmed intent to restart post blackout	Buyback to resume

Management Commentary

“Our first-quarter performance was exceptional, with revenue soaring 52.4% year-over-year to approximately $28.7 million… Our organic revenue growth of 11.2% underscores our resilience” — CEO Andy Shape .
“NetSuite ERP… already delivering meaningful gains in automation, real-time visibility, and centralized process control… enhanced our ability to scale efficiently” — CEO .
“We ended Q1 2025 with… approximately $12.2 million in cash, cash equivalents and investments and no long-term debt” — CFO David Browner .
“We did incur… multimillions of expenses for the reaudit… Q1… legal and compliance and audit work… close to $800,000… looking for them to significantly decrease throughout the year” — CEO .

Q&A Highlights

Non-recurring costs: ~ $0.8M legal/accounting in Q1 tied to closing 2024 compliance; management expects a significant decline through 2025 as cadence normalizes .
Share repurchases: ~$6M remains under the $10M authorization; management intends to restart repurchases as blackout windows allow .
Cash movement: Q1 cash decline primarily due to funding ~$5M of prepaid debit cards for a client’s rewards program; cash inflows expected subsequently as the program replenishes .
Tariff dynamics: Exposure mainly in direct imports from China (<20% of revenue); mitigation includes supplier diversification, contractual pass-throughs, and vendor/customer negotiations amid fluid rates .

Estimates Context

Metric	Q1 2025
Revenue Actual ($USD Millions)	$28.694
Revenue Consensus ($USD Millions)	n/a*
Primary EPS Actual ($)	$(0.02)
Primary EPS Consensus ($)	n/a*

*Values retrieved from S&P Global. Consensus data for SWAG Q1 2025 was unavailable at query time [GetEstimates Q1 2025].

Implications: With no published consensus, investor framing should anchor to company-reported outperformance YoY, segment mix, and operating leverage progress rather than a beat/miss narrative .

Key Takeaways for Investors

Growth inflection with mix headwind: Strong top-line (+52.4% YoY) and improved Stran margins (32.4%), partially offset by lower-margin SLS; watch for SLS margin convergence as integration synergies mature .
Operating leverage setup: Elevated non-recurring compliance and integration costs should fade, supporting margin expansion in 2025; management cites significant reduction ahead .
Systems advantage: NetSuite ERP live and delivering automation/visibility; should aid working capital and cost discipline as volumes scale .
Capital return optionality: Intent to restart the ~$6M remaining buyback authorization post blackout enhances downside support and signals confidence .
Liquidity intact, no long-term debt: ~$12.2M in cash/investments provides flexibility to fund growth and buffer macro volatility .
Macro/tariffs manageable: Direct import exposure <20% of revenue, with mitigation via supplier diversification and pass-throughs; monitor rate resets and customer elasticity .
Control remediation in progress: Material weaknesses persist; sustained remediation and stable reporting cadence would further de-risk the story .

All cited facts and figures are sourced from Stran’s Q1 2025 8-K/press release and 10-Q, the Q1 2025 earnings call transcript, and prior-quarter/company materials as referenced above.

Stran & Company, Inc. (SWAG)·Q1 2025 Earnings Summary