Leatt (LEAT) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 increased 45% year-over-year to $15.37 million, marking the third consecutive quarter of growth, driven by strong gains in all major product categories and international sales.

• Net income reached $1.12 million, reversing a net loss of $0.82 million in Q1 2024, reflecting improved gross margins and higher sales.

• Gross profit rose 68% to $6.72 million, with gross margin improving from 38% to 44% year-over-year, aided by inventory and logistics efficiencies.

• International sales accounted for up to 77% of revenue, with distributor sales up 79% and new partners in South America and the U.K.

• Cash and cash equivalents stood at $12.7 million at quarter end, with no advances on the $1.5 million line of credit.

Financial highlights

• Revenue: $15.37 million, up 45% year-over-year; gross profit: $6.72 million, up 68%.

• Net income: $1.12 million, or $0.18 per basic share, compared to a net loss of $0.82 million last year.

• Operating expenses increased 11% to $5.38 million, mainly due to higher salaries, R&D, and G&A costs.

• Cash and cash equivalents increased by $331,000, and operating cash flow was $768,000.

• EPS was $0.18 basic and $0.17 diluted, versus $(0.13) in Q1 2024.

Outlook and guidance

• Management expects continued revenue growth as international distributor restocking and consumer demand trends persist.

• Working capital investment is expected to rise in line with improving ordering patterns and sales momentum.

• Confident in sufficient liquidity to support expansion and future growth, with no major capital expenditures planned.

• Company anticipates continued impact from global economic conditions, inventory levels, and foreign exchange volatility.

• Cautious of U.S. economic and geopolitical headwinds, including trade war and inflation risks.