Eightco Announces First Quarter 2025 Financial Results

Rhea-AI Summary

Eightco Holdings (NASDAQ: OCTO) reported its Q1 2025 financial results, showing revenue growth of 25% to $9.9mn compared to $8.0mn in Q1 2024, driven by its refurbished Apple products business. The company reduced its operating loss by 55% to $1.4mn from $3.2mn in the prior year quarter. However, gross margins declined to 8.2% from 17.5% due to product mix shift. The company achieved a 28% reduction in SG&A expenses to $2.2mn, demonstrating improved cost management. Despite operational improvements, Eightco reported a net loss of $2.5mn in Q1 2025 compared to a net income of $1.9mn in Q1 2024. Adjusted EBITDA loss improved to $0.8mn from $1.2mn in the prior year quarter.

Positive

• Revenue growth of 25% to $9.9mn year-over-year
• Operating loss reduced by 55% to $1.4mn
• SG&A expenses decreased by 28% to $2.2mn
• Adjusted EBITDA loss improved to $0.8mn from $1.2mn
• No restructuring and severance expenses in Q1 2025 compared to $1.4mn in Q1 2024

Negative

• Gross margin declined significantly to 8.2% from 17.5% year-over-year
• Net loss of $2.5mn compared to net income of $1.9mn in Q1 2024
• Interest expenses increased to $1.3mn from $1.2mn
• Operating at a loss despite cost-cutting measures

Insights

Financial Analyst

Eightco shows mixed Q1 2025 with 25% revenue growth but widening net loss amid strategic pivot to refurbished Apple products.

Eightco's Q1 2025 results present a mixed financial picture with notable improvements in some areas but concerning trends in others. The 25% revenue growth to $9.9 million demonstrates the company's successful pivot toward refurbished Apple products, but this strategic shift has come at the cost of profitability.

The gross margin deterioration from 17.5% to 8.2% is significant and directly attributed to the product mix change toward lower-margin cell phones. While management has made commendable progress in reducing SG&A expenses by 29% to $2.2 million, the company still posted an operating loss of $1.4 million.

Most concerning is the swing from net income to net loss year-over-year. Q1 2025 saw a net loss of $2.5 million compared to net income of $1.9 million in Q1 2024. However, this comparison is misleading as the prior year's profit was driven by a one-time $6.1 million gain on forgiveness of earnout - without which 2024 would have also shown a substantial loss.

The interest expense remains high at $1.3 million, suggesting significant debt burden that's consuming a substantial portion of the company's operating resources. This interest expense represents about 13% of revenue, which is unsustainably high.

The improvement in Adjusted EBITDA loss (from $1.2 million to $0.8 million) shows the company's cost-cutting measures are having some positive effect, but Eightco remains far from sustainable profitability. Management's statement about being able to "scale revenues with a relatively modest increase in expenses" will be crucial to test in coming quarters, as the current business model hasn't yet demonstrated viability.

The company's focus on the refurbished Apple products business appears to be a strategic pivot that's generating revenue growth but at significantly lower margins. This trade-off may eventually prove beneficial if scale economies are achieved, but current financials indicate a challenging path ahead.

Quarter Driven by Focus on Deploying Capital into the Refurbished Apple Products Business and Prioritizing Financial Stability for Long-Term Growth

• First quarter 2025 revenue growth of 25% to $9.9mn compared to $8.0mn for the prior year quarter, due to focus on refurbished apple products sales
  
  
• First quarter 2025 operating loss of $1.4mn, a reduction of 55% compared to an operating loss of $3.2mn for the prior year quarter, due to lower SG&A and absence of restructuring and severance expenses in the first quarter of 2025
  

Easton, PA, May 16, 2025 (GLOBE NEWSWIRE) -- Eightco Holdings Inc. (NASDAQ: OCTO) (the “Company” or “Eightco”) today announced financial results for the three months ended March 31, 2025.

Paul Vassilakos, CEO of Eightco and President of Forever 8 Fund, LLC, the Company’s primary operating subsidiary (“Forever 8”), stated “In order to improve our cost structure to deliver long-term value to shareholders, we continue to reduce operating costs and address selling and administrative expenses. Our goal is to remain on this path to further support the Company’s growth as it continues to explore funding options.”

Mr. Vassilakos continued, “Our current operations provide the infrastructure to significantly scale revenues with a relatively modest increase in expenses. I continue to witness substantial progress within Eightco and believe our accomplishments provide a strong foundation to scale revenues rapidly. The demand for our inventory capital, especially in the refurbished apple products business, continues to underscore the value we believe we can bring to clients. We have now emerged from a transformative period, where I am confident in our ability to accelerate growth and drive sustained success for Eightco and our stakeholders."

Financial Highlights and Commentary

Reallocation of capital back into the refurbished apple products business resulted in revenue growth. This also resulted in a reduction in gross margins from 8.2% for the first quarter of 2025, compared to 17.5% in the first quarter of 2024. The Company also saw a 28% decrease in selling, general and administrative expenses this quarter compared to the prior year quarter, which helped in improving operating losses of $1.4mn compared to a $3.2mn loss in the first quarter of 2024.

• First quarter 2025 revenues of $9.9mn representing a 25% improvement on the first quarter 2024 revenue of $8.0mn
• First quarter 2025 gross profit of $0.8mn compared to a gross profit $1.4mn in the first quarter of 2024
• First quarter 2025 gross profit margin of 8.2%, compared to 17.5% in the first quarter of 2024, due to shift in product mix back into cell phones
• A 55% improvement in operating losses, down to a $1.4mn loss in the first quarter of 2025, compared to a $3.2mn loss in the first quarter of 2024
• First quarter 2025 SG&A of $2.2mn, down 29% from $3.1mn in the first quarter of 2024, as a result of continued streamlining and operating costs reduction across all areas of the business
• First quarter 2025 net loss of $2.5mn compared to a net income of $1.9mn in the first quarter of 2024
• First quarter 2025 Adjusted EBITDA loss from continuing operations of $0.8mn, compared to Adjusted EBITDA loss from continuing operations of $1.2mn for the first quarter of 2024
  
  

		For the Three Months Ended
		March 31,
		2025			2024
Revenues, net		9,913,987			7,958,697
Cost of revenues		9,100,728			6,569,687
Gross profit		813,259			1,389,010
Operating expenses:
Selling, general and administrative expenses		2,229,425			3,127,943
Restructuring and severance		-			1,414,838
Total operating expenses		2,229,425			4,542,781
Operating loss		-1,416,166			-3,153,771
Non-operating income (expense):
Interest income (expense), net		-1,288,804			-1,198,771
Gain on forgiveness of earnout		-			6,100,000
Other income		21,898			26,677
Total non-operating income (expense)		-1,266,906			4,927,906
Net income (loss) before income tax expense		-2,683,072			1,774,135
Income tax expense (benefit)		-28,793			-
Net income (loss) from continuing operations		-2,654,279			1,774,135
Net income from discontinued operations, net of tax		105,553			166,828
Net income (loss)		-2,548,725			1,940,963
Net loss attributable to non-controlling interest		-			-12
Net income (loss) attributable to Eightco Holdings Inc.		-2,548,725			1,940,975
		For the Three Months Ended
		March 31,
		2025			2024
Net income (loss)		(2,654,279	)		1,774,135
Interest (income) expense, net		1,288,804			1,198,771
Gain on forgiveness of interest		-			-
Income tax expense		-28,793			-
Depreciation and amortization		574,642			556,299
EBITDA		(819,626	)		3,529,205
Stock-based compensation		0			0
Loss on issuance of warrants		-			-
Restructuring					1,414,838
Gain on extinguishment of liabilities		-			-6,100,000
Adjusted EBITDA		(819,626	)		(1,155,957	)

Reconciliation of EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP performance measures. Management believes EBITDA and Adjusted EBITDA, in addition to operating profit, net (loss) income and other GAAP measures, are useful to investors to evaluate the Company’s results because they exclude certain items that are not directly related to the Company’s core operating performance. Investors should recognize that EBITDA and Adjusted EBITDA might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.

Reconciliations of the non-GAAP measures used in this press release are included in the table below. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. Items excluded to arrive at forward-looking non-GAAP measures may have a significant, and potentially unpredictable, impact on our future GAAP results.

A reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G as above.

About Eightco

Eightco (NASDAQ: OCTO) is committed to growth of its subsidiaries, made up of Forever 8, an inventory capital and management platform for e-commerce sellers, and Ferguson Containers, Inc., a provider of complete manufacturing and logistical solutions for product and packaging needs, through strategic management and investment. In addition, the Company is actively seeking new opportunities to add to its portfolio of technology solutions focused on the e-commerce ecosystem through strategic acquisitions. Through a combination of innovative strategies and focused execution, Eightco aims to create significant value and growth for its portfolio companies and stockholders.

For additional information, please visit www.8co.holdings

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact could be deemed forward looking. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “expand,” “advance,” “develop” “believes,” “guidance,” “target,” “may,” “remain,” “project,” “outlook,” “intend,” “estimate,” “could,” “should,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: Eightco’s ability to maintain compliance with the Nasdaq’s continued listing requirements; unexpected costs, charges or expenses that reduce Eightco’s capital resources; Eightco’s inability to raise adequate capital to fund its business; Eightco’s inability to innovate and attract users for Eightco’s products; future legislation and rulemaking negatively impacting digital assets; and shifting public and governmental positions on digital asset mining activity. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Eightco’s actual results to differ from those contained in forward-looking statements, see Eightco’s filings with the Securities and Exchange Commission (the “SEC”), including in its Annual Report on Form 10-K filed with the SEC on April 15, 2025. All information in this press release is as of the date of the release, and Eightco undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

For further information, please contact:
Investor Relations
investors@8co.holdings

FAQ

What was Eightco's (OCTO) revenue growth in Q1 2025?

Eightco reported revenue growth of 25% to $9.9 million in Q1 2025, compared to $8.0 million in Q1 2024, driven by its refurbished Apple products business.

How much did Eightco (OCTO) reduce its operating loss in Q1 2025?

Eightco reduced its operating loss by 55% to $1.4 million in Q1 2025, compared to an operating loss of $3.2 million in Q1 2024.

Why did Eightco's (OCTO) gross margins decline in Q1 2025?

Eightco's gross margins declined to 8.2% from 17.5% due to a shift in product mix back into cell phones and reallocation of capital into the refurbished Apple products business.

What was Eightco's (OCTO) net income/loss for Q1 2025?

Eightco reported a net loss of $2.5 million in Q1 2025, compared to a net income of $1.9 million in Q1 2024.

How much did Eightco (OCTO) reduce its SG&A expenses in Q1 2025?

Eightco reduced its selling, general and administrative (SG&A) expenses by 28% to $2.2 million in Q1 2025, down from $3.1 million in Q1 2024.