Kits Eyecare (KITS) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $37.9 million, up 26% year-over-year, with Canadian revenue up 47% and glasses revenue up 41.7%.

• Seventh consecutive quarter of positive Adjusted EBITDA, with margin at 3.5% and net income of $0.2 million ($0.01/share).

• Over 875,000 active customers, with 64% of revenue from returning customers and high retention rates.

• Record repeat revenue of $24.0 million in Q2 2024, up $5.5 million year-over-year.

• Positive cash flow and ongoing debt reduction, with cash and equivalents at $19.3 million and debt reduced to $6 million.

Financial highlights

• Q2 2024 revenue reached $37.9 million (+26% year-over-year), gross profit was $12.4 million (32.8% margin).

• Adjusted EBITDA was $1.3 million (3.5% margin), up from $0.5 million (1.7%) last year.

• Net income was $0.2 million ($0.01/share) versus a $1.2 million loss last year.

• Marketing expense as a percent of revenue declined to 13.4%; fulfillment expenses dropped to 11.2%.

• Average order value increased by over 21% year-over-year to CAD 182.

Outlook and guidance

• Q3 2024 revenue guidance is $39 million–$41 million, representing 25%–32% year-over-year growth.

• Targeted adjusted EBITDA margin for Q3 is 3%–5%.

• Focus on gross margin expansion, product innovation, and scaling both contact lens and eyeglasses segments.