XCel Brands, Inc. Q1 FY2025 earnings call

• Strategic transaction with United Trademark Group closed in April, providing $3M liquidity and saving over $1M/year in interest. Enhanced global distribution and supply chain capabilities.
• Announced new creator influencer brands with Cesar Millan, Gemma Stafford, Jenny Martinez in Q2 2025; social media reach grew from 5M in Jan 2025 to 45M. C. Wonder and Christie Brinkley are fastest-growing on HSN.
• Judith Ripka operating on plan at JTV; Longaberger launches on QVC fall 2025. Orme team onboarded 25 premium beauty brands, user downloads at 50k, influencer base over 10M followers (19% owned by Xcel).
• Approaching Q3/Q4 with caution due to tariffs, HSN consolidation, but Longaberger launch and new brands in pipeline.

Total revenues for Q4 2024 were $1.2 million, full fiscal year 2024 were $8.3 million, and Q1 2025 were $1.3 million. Direct operating expenses for Q1 2025 were approximately $2.3 million, ~40% lower than prior year. GAAP net loss for Q1 2025 was ~$7.1 million or -$3 per share, non-GAAP net loss was $1.6 million or -$0.69 per share. Fourth quarter adjusted EBITDA was negative $0.8 million, a 31% improvement over prior year. Full fiscal year 2024 GAAP net loss was ~$22.4 million or $9.84 per share, non-GAAP net loss was $5.1 million or -$2.23 per share. Q1 2025 GAAP net loss was ~$2.8 million or -$1.18 per share, non-GAAP net loss was $1.4 million or -$0.58 per share. Adjusted EBITDA for Q1 2025 was negative $0.7 million, a 56% improvement over prior year quarter.

• Forecasted adjusted EBITDA for 2025 to be $1 million to $2.5 million, considering impacts of tariffs and HSN consolidation.
• Operating cost run rate reduced to approximately $9 million annually.
• Guaranteed minimum under Halston license is $1.7M per year, with business planned on minimums in Q1 and slight pickup in Q2.

• Macroeconomic environment uncertainties affecting results.
• Tariffs impacting QVC, HSN, and licensees.
• Consolidation of HSN operations into QVC's headquarters in Pennsylvania potentially disrupting business.

Q: Clarifications on adjusted EBITDA for 2025, cost run rate, Halston royalties, liquidity, and revenue potential of brands.

A: Adjusted EBITDA for 2025 includes tariff impacts; cost run rate is ~$9M annually; Halston guaranteed minimum $1.7M/year, Q2 planned on minimums; liquidity is good with $3M from refinancing, and social media followers growth relates to potential $5M-$10M royalty income per brand.

Q: Impact of Lori Goldstein, social media followers to revenue, operating expenses as business pivots.

A: Lori Goldstein contributed $1.1M in Q1 2024, ~$1.4M in Q2 2024; social media followers growth potential translates to $5M-$10M royalty income per brand; operating expenses are structured to scale with variable costs tied to revenue growth.