Outdoor NASDAQ: POWW reported first-quarter fiscal 2027 results that showed higher marketplace activity, the initial contribution from its FFL transfer service, and a substantially lower operating-cost base following restructuring and the resolution of several legacy matters.
Net revenue increased 22.1% year over year to $14.5 million, while net income from continuing operations improved to $3.6 million from a $5.9 million loss in the prior-year period. Adjusted EBITDA rose 152% to $7.9 million, and operating cash flow turned positive at $4.4 million, compared with a $6.7 million cash outflow a year earlier.
Chairman and Chief Executive Officer Steve Urvan said the company’s stabilization phase is “substantially behind us,” although management continues to focus on operating efficiency, technology deployment and expanding revenue through services that add value for marketplace users.
Marketplace Growth Outpaced Broader Firearms Metrics
Gross merchandise value rose 18.1% to $223.7 million during the quarter. Average order value increased 7.5%, or $33, to $477, while conversion improved 11 basis points to 1.76%. First-party engaged sessions rose 2.9%.
Firearm unit sales increased 11.6%, exceeding the 5.3% increase in adjusted National Instant Criminal Background Check System, or NICS, activity cited by the company. Urvan said the company’s FFL-required units represented about 6.4% of adjusted NICS, up 41 basis points from a year earlier, indicating that GunBroker.com grew faster than the broader market during the period.
Management said demand in Virginia provided a meaningful but temporary boost to GMV as customers responded to proposed legislation involving high-capacity firearms. Urvan cautioned that the company does not expect demand pulled forward into the first quarter to recur in the second quarter, particularly because enforcement of the law is subject to preliminary injunctions and litigation remains ongoing.
Excluding Virginia, GMV increased about $23 million year over year, according to Urvan. He said that performance was supported by gains in traffic, conversion and average order value, though marketplace velocity slowed in June. Management also described summer as the company’s historically slowest seasonal period and said activity had tailed off heading into July.
One category that posted notable growth was silencers and suppressed firearms, where GMV increased about 71% year over year. Urvan said NFA-item activity was also up roughly 50% sequentially from the prior quarter. He attributed the category’s growth in part to the reduction to zero of federal making and transfer taxes for most NFA items, including silencers, effective Jan. 1, while noting that application and registration requirements remain in place.
FFL Transfer Service Added Revenue and Take-Rate Expansion
Chief Financial Officer Paul Kasowski said approximately $1.7 million of the company’s revenue increase stemmed from higher marketplace volume, including final value fees and marketplace service fees. A further $0.9 million came from FFL transfer fees, a service that began in April.
The FFL integration added 39 basis points to the company’s take rate, which increased to 6.47% from 6.26% a year earlier. The legacy take rate, excluding the newer FFL service, was 6.08%, modestly below the prior-year level. Kasowski said that decline reflected a greater mix of business from top sellers that receive discounted rates, as well as higher average item values that carry a lower inherent take rate.
Management said the FFL transfer service centralizes dealer verification and compliance and is intended to streamline firearm transfers for customers. Urvan said the revenue stream moves with the number of firearm transactions rather than the dollar value of those transactions. He added that implementation costs tailed off near the end of the quarter and that the service is expected to provide meaningful revenue and profitability as it scales.
Gross profit rose 18.5% to $12.2 million, although gross margin declined to 84.5% from 87.2%. Kasowski said the approximately 260-basis-point decline primarily reflected startup and implementation expenses for FFL transfers. Those activities were substantially completed in May, and the company expects overall gross margin to stabilize above 85% as the service expands.
Lower Expenses Drove Return to Profitability
Total operating expenses declined 45% to $8.9 million from $16.3 million in the prior-year quarter. Legal and professional fees fell $3.7 million, which Kasowski attributed largely to the Delaware litigation, SEC investigation, audit investigation and financial restatement being largely behind the company.
Salaries and related costs declined $2.7 million because of corporate restructuring, while stock-based compensation fell $0.4 million. The prior-year period also included $0.6 million in one-time sales-tax audit expenses that did not recur.
After a $0.8 million preferred dividend, net income attributable to common shareholders was $2.8 million, or $0.02 per diluted share, compared with a loss of $0.06 per share a year earlier.
Adjusted EBITDA reached $7.9 million, compared with $3.1 million in the prior-year quarter. Kasowski said trailing 12-month adjusted EBITDA was approximately $27 million, exceeding the company’s previously established $25 million annualized run-rate goal. He also said adjustments beyond interest, taxes, depreciation and amortization totaled about $0.9 million in the quarter, down from approximately $5.6 million a year earlier.
Cash Position Increased Despite Repurchases and Other Uses
Operating activities generated $4.4 million in cash during the quarter. Outdoor used $2 million for share repurchases, paid an $0.8 million preferred dividend and made a scheduled $1 million payment on a related-party note. Even with those outlays, cash increased by $0.7 million to $68.8 million.
The company repurchased just over 1 million shares for $2 million during the quarter. Since initiating its repurchase program in January 2026, Outdoor has bought back approximately 1.5 million shares at an average price of $1.97 per share, leaving $12 million available under its $15 million authorization.
Looking ahead, Urvan said the company plans to grow marketplace activity and revenue, scale transaction services, continue improving operating efficiency and selectively invest in technology. The company has launched an AI-supported customer-service agent and hired an AI director, while continuing work on an AI listing tool intended to reduce listing time, standardize product descriptions and improve searchability.
Management said it would deploy those tools only when they meet operational and quality standards. Urvan said the company’s capital-allocation priorities remain maintaining a strong balance sheet, investing in platform improvements with attractive returns and returning excess cash to shareholders.
About Outdoor (NASDAQ:POWW)
AMMO, Inc designs, produces, and markets ammunition and ammunition component products for sport and recreational shooters, hunters, individuals seeking home or personal protection, manufacturers, and law enforcement and military agencies. The company's products include STREAK Visual Ammunition that enables shooters to see the path of the bullets fired by them; and Stelth Subsonic ammunition primarily for suppressed firearms. It also owns and operates GunBroker.com, an auction site that supports the lawful sale of firearms, ammunition, and hunting/shooting accessories.
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