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Stran & Company, Inc. (SWAG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was approximately $27.0M, up 17.8% year over year from an estimated $23.0M in Q4 2023, and up sequentially from $20.1M in Q3 2024; EPS and margin for Q4 were not disclosed in the preliminary release .
  • FY 2024 sales increased 8.8% to $82.7M, with gross profit of $25.8M (31.2% gross margin) and a net loss of $(4.1)M driven by higher operating expenses tied to re-audit costs, ERP implementation, and Gander integration .
  • Management guided qualitatively to surpass $100M annual sales in 2025 and to resume the buyback program (~$6.6M remaining authorization), citing NetSuite-driven efficiencies and lower audit-related spend as key margin levers .
  • Strategic integration of Gander Group assets contributed $9.9M to 2024 sales and expands Stran’s footprint into gaming/casino loyalty programs; the company maintained ~$18.2M cash and investments and no long-term debt at year-end, supporting growth and capital deployment .

What Went Well and What Went Wrong

What Went Well

  • Accelerating topline: Q4 2024 revenue ~$27.0M (+17.8% YoY), and FY 2024 sales +8.8% to $82.7M, supported by Gander’s ~$9.9M contribution and new multi-year contracts across diversified end markets .
  • Strategic platform build: NetSuite ERP launched in January 2025 to centralize operations and enable automation and scalability; management expects tangible operational efficiencies in 2025 .
  • Balance sheet and capital allocation: ~$18.2M cash/investments at FY-end, no long-term debt, and intent to resume buybacks with ~$6.6M remaining authorization, signaling confidence .
    • “We remain optimistic about our growth trajectory and ability to surpass $100 million in annual sales in 2025.” — Andy Shape, CEO .

What Went Wrong

  • Profitability pressure: FY 2024 net loss widened to $(4.1)M from $(0.4)M in FY 2023, primarily on higher operating expenses (ERP implementation, Gander integration, re-audit professional fees) .
  • Margin mix headwind: FY 2024 gross margin fell to 31.2% from 32.7% YoY, largely due to incorporating lower-margin SLS/Gander into the mix; Q3 gross margin declined to 29.5% vs. 32.5% in prior-year Q3, reflecting vendor cost increases .
  • Customer spending softness: Q3 2024 noted reduced client spend in the second half, pressuring gross profit and contributing to a quarterly net loss of $(2.0)M .

Financial Results

Quarterly Comparisons

MetricQ4 2023 (Restated)Q3 2024Q4 2024 (Prelim)
Revenue ($USD Millions)~$23.0 $20.1 ~$27.0
Gross Margin (%)N/A29.5% N/A
EPS ($USD)N/A$(0.11) N/A

Full-Year P&L

MetricFY 2023FY 2024
Total Sales ($USD Millions)$76.0 $82.7
Gross Profit ($USD Millions)$24.9 $25.8
Gross Margin (%)32.7% 31.2%
Operating Expenses ($USD Millions)$26.1 $30.7
Net Loss ($USD Millions)$(0.385) $(4.140)
Basic & Diluted EPS ($USD)$(0.02) $(0.22)

Segment Breakdown (FY)

MetricFY 2023FY 2024
Stran Segment Sales ($USD Millions)$76.0 $72.7
Stran Segment Gross Profit ($USD Millions)$24.9 $23.7
Stran Gross Margin (%)32.7% 32.7%
SLS (Gander) Sales ($USD Millions)$0.0 $9.9
SLS Gross Profit ($USD Millions)$0.0 $2.1
SLS Gross Margin (%)N/A20.8%

KPIs (Balance Sheet and Operating)

KPI12/31/202312/31/2024
Cash & Cash Equivalents ($USD Millions)$8.059 $9.358
Investments ($USD Millions)$10.393 $8.856
Cash + Investments ($USD Millions)$18.452 $18.214
Accounts Receivable, net ($USD Millions)$16.223 $18.092
Inventory ($USD Millions)$4.782 $5.389
Unearned Revenue ($USD Millions)$1.116 $4.423
Rewards Program Liability ($USD Millions)$0.875 $6.000

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual SalesFY 2025None disclosedExpects to surpass $100M annual sales Raised (qualitative)
Share Repurchase2025Paused in 2024 due to trading restrictions Intends to resume; ~$6.6M authorization remaining Resumption planned
Operating Expenses2025Elevated due to re-audit and ERP implementation Expect lower audit-related fees; focus on OpEx management Lower (qualitative)
Margin2025None disclosedFocus on margin expansion via NetSuite efficiencies Raised (qualitative)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Technology/ERPQ1 2024: strong gross margin trajectory; Q2 2024: prelim gross margin to 31.7% with tech/process improvements NetSuite ERP launched Jan-2025; expected automation and efficiency gains Positive, execution phase
Supply Chain & TariffsNoted industry challenges and vendor cost increases in Q3 2024 Proactive tariff preparedness: domestic sourcing, partner diversification, cost controls Risk mitigated, resilient
Macro/client spendQ3 2024: reduced customer spending in H2 weighed on margins and profit Emphasis on diversified client base and pipeline strength Stabilizing with diversification
Regulatory/listingNasdaq compliance regained via filings and bid price; annual meeting pending (Q3 2024 comms) Re-audit completed; compliance restored; routine cadence going forward Resolved/normalizing
M&A integrationGander assets acquired Aug-2024; prelim nine-months commentary on integration Gander contributed ~$9.9M to FY sales; SLS segment established Accretive, scaling

Management Commentary

  • “With our financial reporting compliance now restored, we’re back to executing our growth strategy with renewed focus and energy… optimistic about our growth trajectory and ability to surpass $100 million in annual sales in 2025.” — Andy Shape, CEO .
  • “Gander contributed $9.9 million in revenue… and has become a key pillar of our newly established Stran Loyalty Solutions (SLS) segment.” — Andy Shape .
  • “NetSuite is already delivering greater visibility, more automation, and accuracy… cornerstone of our efforts to drive operational excellence in 2025.” — Andy Shape .
  • “At 12/31/2024, the company had approximately $18.2 million of cash, cash equivalents and investments and no long term debt.” — David Browner, CFO .
  • “We intend to resume our buyback efforts in 2025… approximately $6.6 million of that authorization remains available.” — Andy Shape .

Q&A Highlights

  • Profitability path: Management expects audit-related fees to drop materially and NetSuite-driven automation to reduce manual work, enabling OpEx control and margin expansion in 2025; focus shifts from re-audit to operating execution and growth .
  • Buyback clarity: Program was paused in 2024 due to trading restrictions; ~$6.6M capacity remains and management intends to resume in 2025 .
  • Macro/tariffs: Preparedness via domestic sourcing and partner diversification aims to protect profitability despite potential tariff increases .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, and EBITDA was unavailable at time of request due to data access limits; thus, no beat/miss determination versus consensus can be made. Estimates are explicitly unavailable.
  • Given actual Q4 revenue of ~$27.0M and FY sales of $82.7M, sell-side models may need to incorporate stronger-than-prior-year Q4 seasonality and SLS/Gander’s lower-margin mix implications for FY 2025 .
MetricQ4 2024 S&P Global ConsensusActualBeat/Miss
Revenue ($USD Millions)N/A (Unavailable)~$27.0 N/A
EPS ($USD)N/A (Unavailable)N/AN/A
EBITDA ($USD Millions)N/A (Unavailable)N/AN/A

Key Takeaways for Investors

  • Q4 topline momentum: ~18% YoY revenue growth and sequential improvement underscore demand resilience and early SLS contribution .
  • Mix weighs margins near term: FY gross margin compressed to 31.2% as SLS operates at ~20.8% margin; margin workstreams prioritize NetSuite efficiencies and pricing discipline .
  • 2025 setup: Qualitative guide to >$100M revenue plus buyback resumption and lower re-audit spend positions SWAG for improved operating leverage .
  • Balance sheet supports execution: ~$18.2M cash/investments and no long-term debt provide flexibility amid macro/tariff uncertainty .
  • Pipeline and diversification: New contracts across housing, diagnostics, transportation, and premium consumer products broaden revenue base and reduce single-sector risk .
  • Watch near-term catalysts: Formal 2025 guidance clarity, margin progression post-NetSuite, SLS cross-sell wins, and buyback execution should be monitored for stock impact .
  • Prior-quarter softness appears transitory: H2 customer spend headwinds noted in Q3; re-audit completion and ERP go-live enable refocus on growth and margin .