Solesence . Common Stock Stock Earnings Reports

Solesence reported Q1 2026 revenue of $13.0M, down from $14.6M year-over-year, largely due to shipment delays and on-time-in-full (OTIF) performance issues tied to process changes. Gross margin improved 300 basis points to 26% driven by better labor efficiency and reduced quality-related waste. Q1 net loss was $0.8M (versus net income of $0.08M prior year); adjusted EBITDA was a loss of $107K (versus +$609K prior year). Shipped and open orders total $47M, which management views as a healthy forward indicator and consistent with expectations for a more normalized 2026 revenue environment. Management is executing a multiyear Transform and Transcend initiative (announced March) focused on: 1) operational excellence (SIOP, shift structure, lean training, facility consolidation), 2) IP-driven product expansion (launched Chromalum and WHSPR technologies to expand SPF-infused product formats), and 3) evolving the service model (co-marketing activations with brand partners). The company reiterated guidance of a 30% gross profit margin floor for 2026 and remains on track to return to double-digit EBITDA margins by year-end as operational improvements and facility consolidation savings materialize. Management stressed these Q1 results reflect intentional, early-stage investments in operational infrastructure and expect OTIF and shipment timing to normalize through the year.