On August 8, 2024, AMMO Inc (POWW, Financial) released its 8-K filing for the first quarter of fiscal year 2025, ending June 30, 2024. AMMO Inc, the owner of GunBroker.com and a vertically integrated producer of high-performance ammunition, reported a challenging quarter with revenues and earnings falling short of analyst estimates.
Company Overview
AMMO Inc is a prominent player in the firearms and shooting sports industries, owning GunBroker.com, the largest online marketplace in this sector. The company operates through two main segments: Ammunition and Marketplace. The Ammunition segment focuses on the design, production, and marketing of ammunition products, while the Marketplace segment is driven by the GunBroker.com platform. The majority of the company's revenue is generated from the Ammunition segment.
Performance and Challenges
For the first quarter of fiscal 2025, AMMO Inc reported net revenues of $31.0 million, a decline from $34.3 million in the same period last year. The company's gross profit margin also decreased to 31.6% from 40.9% in the prior year. Adjusted EBITDA fell to $2.0 million from $6.6 million, and the net loss widened to $7.1 million compared to a net loss of $1.1 million in the previous year. Diluted EPS was reported at -$0.07, missing the analyst estimate of -$0.03.
Financial Achievements and Industry Impact
Despite the challenges, AMMO Inc's GunBroker.com platform showed resilience with marketplace revenue of approximately $12.3 million and an increase in the average take rate to 6.2% from 5.8% in Q1 FY 2024. The company also reported new user growth averaging 25,000 per month. These metrics are crucial as they highlight the platform's continued relevance and potential for future growth in the e-commerce space.
Key Financial Metrics
| Metric | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Net Revenues | $31.0 million | $34.3 million |
| Gross Profit Margin | 31.6% | 40.9% |
| Adjusted EBITDA | $2.0 million | $6.6 million |
| Net Loss | ($7.1) million | ($1.1) million |
| Diluted EPS | ($0.07) | ($0.02) |
Income Statement Highlights
AMMO Inc's income statement reveals a decrease in both ammunition sales and marketplace revenue. Ammunition sales were $13.4 million, down from $14.1 million, while marketplace revenue fell to $12.3 million from $13.9 million. The cost of revenues increased to $21.2 million from $20.2 million, leading to a reduced gross profit of $9.8 million compared to $14.0 million in the prior year.
Balance Sheet and Cash Flow
The company's balance sheet remains strong with $134.0 million in current assets, including $50.8 million in cash and cash equivalents. Current liabilities stand at $42.3 million. AMMO Inc also repurchased approximately 580,000 shares of common stock during the quarter, reflecting a commitment to returning value to shareholders.
Commentary and Future Outlook
Jared Smith, AMMO’s CEO, commented, “In our first quarter of fiscal 2025, we continued to make progress on the primary core initiatives for each of our business units, transforming our ammunition plant to higher margin rifle and pistol production and transforming our marketplace into an innovative e-commerce leader.”
Looking ahead, AMMO Inc plans to focus on streamlining manufacturing processes to improve product throughput and marginality. The company is also enhancing its GunBroker.com platform with flexible financing options and cross-selling solutions to drive sales growth.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from AMMO Inc for further details.
