Grabagun Digital Q2 Earnings Call Highlights

Key Points

• Revenue and gross margin improved: Second-quarter revenue rose 9.4% to $23.2 million, while gross profit increased 39% to $3.1 million and gross margin expanded to 13.5%. Growth was driven by higher-priced firearms, larger customer orders, pricing optimization and favorable product mix.
• Profitability remained pressured by investment costs: Operating expenses climbed to $5.7 million due to public-company costs, PEW Logistics investments and added infrastructure, resulting in a $1.8 million net loss and $1.7 million adjusted EBITDA loss.
• PEW Logistics is expanding, while leadership changes: The platform processed more than $1.9 million in gross merchandise value and added Backwoods Suppressors as its third manufacturer partner. CFO and co-founder Justin Hilty plans to retire and will be succeeded by Jonathan Terry, formerly of YETI.

Grabagun Digital NYSE: PEW reported second-quarter revenue growth and a sharp improvement in gross margin as higher-priced firearms sales, pricing initiatives and product mix supported profitability at the gross-profit level. The company also highlighted early progress at its PEW Logistics platform and announced a planned chief financial officer transition.

Second-quarter net revenue rose 9.4% to $23.2 million from $21.2 million in the prior-year period. Firearms product sales increased 8.5% to $19.3 million, while non-firearms product sales grew 7% to $3.6 million despite what management described as continued softness in ammunition demand across the broader firearms industry.

Chief Executive Officer Marc Nemati said firearms growth was driven primarily by higher average order values and a shift toward higher-priced products. During the question-and-answer session, Nemati said the higher order values reflected both sales of higher-quality, higher-priced firearms and additional accessories in customer baskets.

Margin Expansion Offsets Some Investment Costs

Gross profit increased 39% to $3.1 million, compared with $2.2 million a year earlier. Gross margin expanded approximately 290 basis points to 13.5% of net sales from 10.6% in the prior-year quarter.

Nemati attributed the gain to the company’s AI-driven pricing optimization, favorable product mix, sourcing capabilities and initial contributions from PEW Logistics. Chief Financial Officer Justin Hilty said the margin improvement was driven by a mix shift toward higher-margin firearm categories and continued pricing optimization initiatives.

Sales and marketing expense remained at approximately 1% of net revenue, according to Nemati, who said the company’s technology, supplier relationships and customer trust have helped maintain a lean customer-acquisition profile.

However, operating expenses rose to $5.7 million from $1.5 million in the prior-year period. Hilty said the increase reflected costs associated with operating as a public company, investments in PEW Logistics and additional headcount and infrastructure to support growth initiatives. He noted that the comparable 2025 period occurred before the company became public.

The company reported a net loss of $1.8 million, compared with net income of $0.8 million a year earlier. Adjusted EBITDA was a loss of $1.7 million, versus adjusted EBITDA of $0.9 million in the prior-year quarter.

Management said it has reached the final quarter of year-over-year comparisons affected by incremental public-company costs. Beginning next quarter, Hilty said expense comparisons should become more comparable on a like-for-like basis. Nemati added that general and administrative expenses should moderate as initial public-company costs normalize, though some additional expenses tied to the company’s growth efforts may phase out over the remainder of the year and into next year.

PEW Logistics Adds Third Manufacturer

PEW Logistics, the company’s logistics and direct-to-consumer platform for firearms manufacturers, processed more than $1.9 million in gross merchandise value through the end of the second quarter. GrabAGun recently added Backwoods Suppressors as its third manufacturer partner, joining Kel-Tec and Derya, according to management.

Nemati said the platform is intended to extend the company’s existing technology, compliance, fulfillment and industry capabilities to manufacturers. He said the company has a sizable manufacturer pipeline but did not quantify potential gross merchandise value or provide a timetable for additional customer signings.

“It is a very new offering” and “very disruptive to the industry,” Nemati said in response to an analyst question. He said additional manufacturer partnerships could help demonstrate the platform’s value to hesitant potential customers.

Management said PEW Logistics remains in its early stages but could become a meaningful contributor to revenue diversification and margin expansion over time, citing its asset-light model and higher-margin potential.

The company said its nationwide network places a federally licensed firearms dealer within 15 miles of approximately 97% of the U.S. population. Average time from checkout to delivery was just under three business days, management said.

Cash Position, Facility Plans and Capital Allocation

GrabAGun ended the quarter with $97.5 million in cash and minimal debt. The company held $9.3 million of inventory and $7.8 million of accounts payable at quarter-end, compared with $13 million in accounts payable at the end of the first quarter while inventory remained relatively unchanged.

Hilty said the lower cash balance was principally attributable to the timing of working-capital payments, including reduced accounts payable near the end of June. The company collects cash from customers before paying suppliers, he said, and management does not expect the quarter-end balance to signal a change in its underlying working-capital profile.

For the first six months of the year, GrabAGun repurchased approximately $2.4 million of common stock under its $20 million repurchase authorization. Management said it would continue to assess opportunistic buybacks while preserving flexibility for growth investments and potential acquisitions.

The company also continues to outfit its new headquarters, fulfillment and distribution facility, which management expects to become fully operational in the fourth quarter of 2026. Nemati said the facility is intended to expand capacity for the core e-commerce business and PEW Logistics.

On acquisitions, Nemati said the company is actively evaluating opportunities but remains disciplined on valuation and strategic fit. “We are not going to overpay or again, not just make a deal for the sake of making a deal,” he said.

CFO Transition Announced

Nemati announced that Hilty, GrabAGun’s co-founder and CFO, plans to retire after more than 15 years with the company. Hilty will remain in an advisory role to support the transition and knowledge transfer process.

Jonathan Terry has been named the company’s next CFO. Nemati said Terry brings public-company and outdoor consumer-products experience, most recently serving in a senior finance role at YETI.

About Grabagun Digital (NYSE:PEW)

GrabAGun.com is an online retailer of firearms, ammunition and related accessories. GrabAGun.com, formerly known as Colombier Acquisition Corp. II, is based in COPPELL, Texas.

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