Stran & Company — Second Quarter 2026 Earnings Summary

Financial Performance

• Q2 2026 revenue was $33.4 million, a 2.4% increase year-over-year from $32.6 million; H1 2026 revenue was $64.6 million, a 5.4% increase from $61.3 million.
• Q2 2026 gross profit was $10.0 million (30.0% margin), up 1.6% from $9.9 million (30.3% margin) in the prior year period; H1 2026 gross profit was $19.7 million (30.4% margin), up 7.2% from $18.4 million (30.0% margin).
• Q2 2026 net income was $0.3 million compared to $0.6 million in the prior year; H1 2026 net income was $1.1 million compared to $0.3 million in the prior year, an increase of over 300%.
• Q2 2026 EBITDA was $0.6 million compared to $0.9 million in the prior year; H1 2026 EBITDA was $1.6 million compared to $0.7 million in the prior year, an improvement of approximately 115%.
• Total operating expenses for Q2 2026 were $9.9 million (29.8% of sales) compared to $9.5 million (29.1% of sales) in the prior year; H1 2026 operating expenses were $18.9 million (29.3% of sales) compared to $18.5 million (30.2% of sales).
• Cash, cash equivalents, and investments totaled $12.6 million as of June 30, 2026, compared to $11.6 million at December 31, 2025.
• Accounts receivable increased to $20.3 million as of June 30, 2026, from $17.3 million at December 31, 2025.
• Unearned revenue increased to $6.1 million as of June 30, 2026, from $3.2 million at December 31, 2025.
• Total liabilities increased to $25.4 million as of June 30, 2026, from $18.8 million at December 31, 2025.
• Net cash provided by operating activities for the six months ended June 30, 2026, was $1.6 million, compared to $0.5 million in the prior year period.

Business Segments and Product Lines

• The Stran segment generated $23.3 million in Q2 revenue (up 6.9% year-over-year) with a gross margin of 32.5%; H1 Stran revenue was $46.7 million (up 9.3% year-over-year) with a gross margin of 32.1%.
• The Stran Loyalty Solutions (SLS) segment generated $10.1 million in Q2 revenue, down from $10.8 million in the prior year, with gross profit increasing 7.8% to $2.5 million and gross margin expanding to 24.3% from 21.0%.
• SLS operating income nearly doubled to $443 thousand in Q2 2026.
• H1 SLS revenue was $17.9 million, down from $18.6 million in the prior year, with gross profit increasing 18.5% to $4.7 million and gross margin expanding to 26.2% from 21.4%.
• The company expanded its enterprise footprint with a new contract with a leading construction solutions provider expected to generate nearly seven figures in annual revenue.
• The company onboarded an industry veteran with a book of business focused on the gaming market.
• The company serves a diversified customer base of more than 2,000 active clients, including over 30 Fortune 500 companies.

Market and Competitive Landscape

• Stran advanced to No. 21 on the 2026 ASI Counselor Top 40 Distributors list, up from No. 23 in 2025.
• The company operates in the promotional products industry, specializing in complex marketing programs, branded merchandise, and loyalty incentive programs.

Risks and Challenges

• Risks include the ability to achieve or sustain profitability, particularly in the SLS segment.
• Risks include the ability to retain key clients and secure new engagements, including realizing expected revenue from new contracts and personnel.
• Risks include dependence on a limited number of significant clients.
• Risks include changes in demand for promotional products, branded merchandise, and loyalty incentive programs.
• Risks include general economic conditions, inflation, supply chain disruptions, and changes in consumer and corporate spending.
• Risks include increased competition in the promotional products industry.
• Risks include the ability to identify, complete, and successfully integrate acquisitions.
• Risks include the ability to attract and retain qualified personnel.
• Risks include fluctuations in quarterly and annual results of operations.

Management Commentary and Tone

• CEO Andy Shape stated the first half of 2026 represents the strongest six-month period in the company's history as a public company.
• Management highlighted operating leverage embedded in the platform and progress toward building a sustainably profitable business.
• Management expressed confidence that the SLS segment's trajectory toward sustainable profitability remains firmly intact despite revenue timing variability.
• Management noted a growing enterprise pipeline and a strong balance sheet position the company well for the balance of 2026.
• Management reiterated commitment to expanding both Stran and SLS segments and pursuing disciplined acquisition opportunities.

Other Key Points

• The company resumed share repurchase activity in Q2 2026 under its $10 million authorized program, repurchasing and retiring approximately 131,000 shares at a cost of $272,000.
• Since the program's inception in May 2022, the company has repurchased a total of 2.3 million shares for $4.2 million at a weighted-average price of $1.81 per share.
• The company announced a conference call for August 12, 2026, at 10:00 a.m. Eastern Time to discuss results.
• The company reported a realized gain on investments of $10 thousand in Q2 2026 and $10 thousand in H1 2026.
• Stock-based compensation was $194 thousand for the six months ended June 30, 2026, compared to $40 thousand in the prior year period.
• The company reported a noncash earnout liability adjustment of $(200) thousand in the six months ended June 30, 2026.