Sadot Group Inc. ((SDOT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Sadot Group Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company is navigating a strategic transition, maintaining profitability while grappling with declining revenue and increased expenses. Positives include their carbon project investment and a focus on higher-margin trades, though challenges persist with the slow progress on the restaurant sale and resource allocation issues.
Fifth Consecutive Profitable Quarter
Sadot Group celebrated its fifth consecutive quarter of positive net income and EBITDA, marking a significant turnaround from its past as a restaurant-only concept. This achievement underscores the company’s successful strategic shift towards becoming a global food supply chain player.
Improved Gross Profit Margins
The company reported an improvement in gross profit margins, which increased by 100 basis points to 4.4% in Q2 2025 from 3.3% in Q2 2024. This improvement is attributed to Sadot’s focus on higher-margin trades, a strategic move that has bolstered profitability despite revenue challenges.
Strategic Carbon Project Investment
Sadot Group has invested in a carbon project in Indonesia, acquiring a 37.5% stake. This project is expected to generate between 1.1 to 1.2 million high-integrity carbon credits in its first issuance cycle, aligning with the company’s commitment to sustainable growth and diversification.
Revenue Decline
Despite strategic advancements, Sadot Group faced a revenue decline, with Sadot Agri-Foods’ revenue decreasing by $58.9 million to $114.4 million in Q2 2025, a 34% drop compared to Q2 2024. This decline is primarily due to the company’s strategic pivot towards higher-margin trades.
Increased SG&A Expenses
The company experienced an increase in SG&A expenses by $1.1 million compared to the previous year. This rise is mainly due to the reclassification of some expenses from costs of goods to SG&A, reflecting changes in the company’s financial structuring.
Slow Progress on Restaurant Sale
Sadot Group’s sale process for its restaurant business has been slow, causing resource allocation issues and potential distractions from its core agri-business. This slow progress remains a concern as the company continues its strategic transition.
Forward-Looking Guidance
Looking ahead, Sadot Group remains focused on its strategic pillars of geographic and vertical expansion, margin optimization, technological integration, management strengthening, and sustainable growth. The company aims to enhance its position as a diversified, technology-enabled global agri-business, despite the challenges posed by declining revenue and increased expenses.
In summary, Sadot Group’s earnings call reflects a company in transition, balancing profitability with strategic investments and operational challenges. While the focus on higher-margin trades and carbon project investments are promising, the slow restaurant sale and increased expenses highlight areas needing attention. Stakeholders remain cautiously optimistic as Sadot navigates its path forward.