BranchOut Food Achieves Record $1.7M Monthly Revenue in June, Record 27% Gross Margin, and Approaches Breakeven EBITDA

Rhea-AI Summary

BranchOut Food (NASDAQ: BOF) reported exceptional performance in June 2025, achieving a record $1.7 million in monthly revenue and a record 27% gross margin. The company's GentleDry™ technology facility in Peru increased throughput by 50% compared to previous months, approaching breakeven EBITDA. First-half 2025 revenue grew 129% year-over-year.

The company significantly improved its financial position by reducing current liability debt by 67% from $6.39M to $2.16M in Q2 2025. Despite an H1 EBITDA loss of $1.6M due to one-time costs, operational efficiency is improving with inventory turning in under 60 days. Management expects enhanced performance in H2 2025 as air freight costs decrease and facility utilization improves.

Insights

Financial Analyst

BranchOut achieves operational turning point with record June performance, suggesting sustainable path to profitability despite early-stage inefficiencies.

BranchOut Food's June results represent a potential inflection point in the company's operational development. The $1.7 million monthly revenue combined with a 27% gross margin demonstrates that their Peru facility is beginning to achieve the scale efficiencies necessary for sustainable operations. This is particularly significant as it approaches breakeven EBITDA despite still being in scale-up mode.

The 129% year-to-date revenue growth indicates strong market demand, while the inventory turnover of under 60 days suggests healthy working capital management. Most notably, the 67% reduction in current liability debt (from $6.39 million to $2.16 million) substantially improves the balance sheet position and reduces financial risk.

The 50% increase in factory throughput from previous months demonstrates that operational investments are beginning to yield returns. While one-time costs ($68,000 in air freight and $82,000 in retailer deductions) prevented June from reaching positive EBITDA, these expenses appear transitory rather than structural.

The gross margin improvement path is clearly defined through three mechanisms: elimination of air freight (expected to add 3-4% to margins), increased factory utilization reducing per-unit fixed costs, and completion of the initial R&D and scale-up phase. The company's strategy of prioritizing speed-to-market over initial efficiency appears to be yielding results, with products like Pineapple Chips and Chewy Bananas now reaching steady-state production efficiency.

The H1 EBITDA loss of $1.6 million contextualizes the June performance – it suggests the company has significantly narrowed its operating losses from earlier months. With reduced one-time expenses and improved operational metrics, BranchOut appears positioned to potentially achieve consistent profitability in coming quarters if it can maintain revenue growth while realizing the projected margin improvements.

129% Year-to-Date Revenue Growth, Fast-Moving Inventory, Lower Debt, and June Operational Gains Set the Stage for Continued Strong Performance

Key Highlights:

• Record-Breaking June: Achieved highest-ever monthly revenue of about $1.7 million, with 27% gross margin and moved closer to breakeven EBITDA, marking a major operational milestone.
• 129% revenue growth for first six months of 2025 versus 2024
• Significant Operational Progress: Factory throughput increased 50% in June over prior months; inventory turning in under 60 days; and idle capacity costs expected to decline as utilization improves.
• Current Liability Debt down 67%: Current liability debt was reduced from $6.39 million to $2.16 million in Q2.

BEND, Ore., Aug. 11, 2025 (GLOBE NEWSWIRE) -- BranchOut Food Inc. (NASDAQ: BOF), a leading food technology company specializing in its patented GentleDry™ dehydrated snacks and ingredients, today announces record June performance, underscoring the company’s scalable platform model and long-term growth trajectory. Performance has strengthened month over month since the facility opened earlier this year, with June delivering the highest results of the first half of 2025.

April remained similar to Q1, with lower utilization and significant R&D and scale-up activity. May marked a transitional period, and by June, the company achieved a meaningful step forward — increasing monthly factory throughput by 50% over previous months. June reflects the early impact of greater efficiency and operational maturity, and management expects continued improvement throughout Q3 and beyond as the business scales further.

June was the company’s highest revenue month to date, generating about $1.7 million in sales and a record gross margin of 27%. With adjustments for one-time costs — including $68K in air freight and an $82K one time retailer deduction — EBITDA for the month would be positive. This milestone reflects both surging demand and the operational efficiencies now emerging at the company’s Peru facility.

“Our June results mark the first month since opening our Peru facility earlier this year that we’ve started to see real gains from our ongoing R&D and scale-up efforts — increasing throughput by 50% over prior months and showing that our model works at scale,” said Eric Healy, CEO of BranchOut Food. “The facility continues to improve every month, and we believe there’s still considerable upside as we refine and expand production in the months ahead.”

Operational Efficiency and Margin Improvements
Inventory is currently turning in less than 60 days as the company works to keep pace with strong and consistent demand. Since opening the Peru facility, BranchOut has operated with a backlog of orders and is actively working to catch up. To meet customer timelines, the company has relied on air freight, which has temporarily impacted margins. As operations catch up with the order backlog and allow sufficient lead time for ocean freight, gross margins are expected to improve by approximately 3–4% by eliminating air freight alone. Additional margin improvements are anticipated as factory utilization continues to increase, large non-cash equipment depreciation is adjusted for, and the company moves past early-stage R&D and scale-up costs.

Scaling Fast: Meeting Demand Through Agile Product Development
The company remains focused on new product development to expand its offering and meet growing customer demand. Since opening the Peru facility earlier this year, BranchOut has developed each product from the ground up—building supply chains, conducting testing, and rapidly scaling production to meet order deadlines. This process has also required training an entirely new team to operate complex technology for each product as it comes online.

For example, the nation’s largest warehouse club placed a significant order for Strawberry Halves—a product previously produced only at R&D scale. To fulfill the order on time and continue building a portfolio of high-impact, staple products like strawberry, the company began scaling up production in July. As with any new product, early runs are less efficient as the team works through supplier validation, machine parameters, production SOPs, and optimizing throughputs.

As the year progresses, BranchOut expects to complete the scale-up process for all key products, enabling follow-on orders to be produced far more efficiently. Products like Pineapple Chips, Chewy Bananas and several other key products, which were scaled earlier in the year, are now highly efficient with consistent repeat production.

While the company remains committed to long-term operational efficiency, its rapid growth strategy emphasizes speed-to-market and customer responsiveness. This often means accepting initial inefficiencies in order to quickly launch new products and secure strategic orders. Management believes this agile approach is a key driver of accelerated growth and long-term market share gains.

Financial Strength
BranchOut reduced its current liability debt by 67% in Q2, from $6.39 million to $2.16 million, while absorbing several one-time costs — including legal expenses, air freight, and other non-recurring items — that are not expected to recur at the same scale in future quarters.

Revenue for the first half of 2025 more than doubled year-over-year, driven by strong demand across both retail and ingredient channels. The company’s H1 EBITDA loss of $1.6 million was largely the result of one-time scale-up costs, including R&D, legal expenses, air freight, and low facility utilization. Management believes that improved operational efficiency, lower freight costs, and reduced one-time expenses will contribute to significantly stronger financial performance in the second half of the year.

Looking Ahead
BranchOut is well-positioned for continued growth and margin expansion, supported by strong sell-through in warehouse clubs and national retailers, and rapidly growing ingredient sales through its MicroDried partnership. Additional tailwinds from tariffs on Chinese imports further enhance the company’s competitive positioning.

About BranchOut Food Inc.
BranchOut Food is a leading international food technology company, specializing in the production of high-quality dehydrated fruit and vegetable-based products through its proprietary GentleDry Technology. This next-generation dehydration method preserves up to 95% of the original nutrition of fresh produce, offering superior quality and taste. Protected by over 17 patents, BranchOut’s technology enables it to stand out as a trusted brand, ingredient and a private-label supplier. For more information, visit www.branchoutfood.com or follow us on social media here.

For more information:
ir@branchoutfood.com

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