Synergy CHC Corp’s Earnings Call: Growth Amid Challenges

Synergy Chc Corp ((SNYR)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Synergy CHC Corp painted a picture of strong operational performance with a mix of positive growth and some financial challenges. The company showcased continued profitability and revenue growth, particularly in the beverage and supplement markets. However, there were notable declines in net income and earnings per share, alongside increased operating expenses, which tempered the overall positive sentiment.

11th Consecutive Quarter of Profitability

Synergy CHC Corp proudly reported its 11th consecutive quarter of profitability, highlighting the company’s operational discipline and focused execution. This achievement underscores the company’s ability to maintain a steady financial performance amidst market fluctuations.

Revenue Growth and Expansion

The company experienced a 12.4% year-over-year increase in net revenue, reaching $8 million compared to $7.1 million in the previous year. This growth was bolstered by a significant expansion of its retail footprint, signaling strong market demand and successful strategic initiatives.

Gross Margin Improvement

Synergy’s gross margin saw an improvement, rising to 70.9% from 67.2% in the same quarter last year. This increase was driven by a favorable shift in the product mix, which contributed to higher profitability.

Strategic Leadership Additions

The company made strategic leadership additions, including Teresa Thompson and Bob Anderson, to support its expanding operations and optimize distribution. These new leaders are expected to drive further growth and efficiency within the organization.

Functional Beverage and Supplement Expansion

Synergy secured major distribution wins for its functional beverages and expanded the FOCUSfactor supplement brand both domestically and internationally. These expansions are crucial for capturing new market segments and enhancing brand presence.

Equity Capital Raised

To support its retail rollouts, inventory buildup, and marketing initiatives, Synergy raised $4.4 million of equity capital. This financial boost is aimed at sustaining the company’s growth trajectory and operational needs.

Net Income Decline

Despite the positive revenue growth, net income for the third quarter was $125,300, a significant decrease from $783,600 in the year-ago quarter. This decline highlights the impact of increased expenses on the company’s bottom line.

Earnings Per Share Decrease

Earnings per share for the third quarter fell to $0.01 per diluted share from $0.11 per diluted share in the previous year. This decrease reflects the challenges faced in maintaining profitability amidst rising costs.

Increased Operating Expenses

Operating expenses rose to $4.4 million from $3.7 million in the year-ago quarter, primarily due to incremental costs of being a public company and launching the beverage division. These expenses are part of the company’s strategic investments for future growth.

Cash Used in Operating Activities

Cash used in operating activities increased to $3.21 million for the nine months ended September 30, 2025, compared to $1.38 million in the same period in 2024. This increase indicates higher operational costs associated with the company’s expansion efforts.

Forward-Looking Guidance

Synergy CHC Corp provided financial guidance for the third quarter of fiscal year 2025, emphasizing strategic expansions in distribution partnerships and leadership additions to support growth across its beverage and supplement divisions. The company reported a net revenue of $8 million, a 12.4% year-over-year increase, and a gross margin improvement to 70.9%. Despite a drop in net income to $125,300, adjusted EBITDA rose by 13.4% to $1.52 million, indicating a positive outlook for future profitability.

In summary, Synergy CHC Corp’s earnings call highlighted a robust operational performance with significant revenue growth and strategic expansions. While challenges such as declining net income and increased expenses were noted, the company’s forward-looking guidance suggests a continued focus on growth and profitability. Investors and market watchers will be keen to see how Synergy navigates these challenges and capitalizes on its strategic initiatives in the coming quarters.