Stran & Company, Inc.
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 11, 2026
SWAG$1.28-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001213900-26-055112
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001213900-26-087791
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 98 current paragraphs.
45 unchanged; 24 reworded; 17 added; 2 removed; 1 previous and 12 current paragraphs rearranged.
Tables are not compared: 31 previous and 36 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Also on February 20, 2026, invoking Section 122 of the Trade Act of 1974, President Trump imposed a temporary 10% global import surcharge on most imports effective February 24, 2026, for a maximum statutory period of 150 days. The President separately announced via social media an intention to increase this surcharge to 15%; however, no proclamation implementing that increase was ever issued, and the controlling Federal Register notice and CBP’s duty collection remained at 10% throughout the period the surcharge was in effect. On May 7, 2026, the U.S. Court of International Trade held, in a divided 2–1 decision, that the Section 122 surcharge was unlawful, although relief under that decision was limited to the plaintiffs in that litigation rather than extended to all importers. Separately, because Section 122 authority is capped at 150 days absent an extension by Congress, and no such extension occurred, the surcharge expired by its own terms as of July 24, 2026. Following the Supreme Court’s decision, the administration also indicated it would pursue Section 301 investigations targeting numerous U.S. trading partners as a longer-term replacement for the invalidated IEEPA tariffs.
Current report
Effective July 24, 2026, the Section 122 global surcharge described above was replaced by new tariffs of 10% or 12.5% imposed under Section 301 of the Trade Act of 1974 on imports from 60 trading partners representing approximately 99% of U.S. imports. The Office of the U.S. Trade Representative (“USTR”) initiated the underlying Section 301 investigation on March 12, 2026, and determined on June 2, 2026, that the investigated economies had failed to impose, or had failed effectively to enforce, prohibitions on the importation of goods produced with forced labor. Economies that had adopted and were enforcing such prohibitions – or that the USTR determined had made satisfactory commitments to adopt and enforce them – became subject to the 10% rate, while the remaining economies, including China, became subject to the 12.5% rate. These duties took effect immediately upon the expiration of the Section 122 surcharge and remain subject to various product- and country-specific exemptions, including for certain raw materials, products whose coverage would cause economy-wide disruption, goods not producible in sufficient quantities domestically, civil aircraft-related articles, certain pharmaceutical products, and a limited in-transit exception for goods loaded before July 24, 2026, and entered for consumption before July 28, 2026.
Current report
Gross profit by segment and in total were as follows (in thousands):
Current report
Other Income
Current report
Net Income
Current report
Comparison of Six Months Ended June 30, 2026 and 2025
Current report
Sales
Current report
Our total sales increased 5.4% to approximately $64.6 million for the six months ended June 30, 2026, from approximately $61.3 million for the six months ended June 30, 2025. Sales by our Stran segment increased to approximately $46.7 million for the six months ended June 30, 2026 from approximately $42.7 million for the six months ended June 30, 2025. Sales by our SLS segment decreased to approximately $17.9 million for the six months ended June 30, 2026 from approximately $18.6 million for the six months ended June 30, 2025. For the Stran segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers. For the SLS segment, the decrease in sales was primarily attributable to lower spend from existing customers.
Current report
Cost of Sales
Current report
Our total cost of sales increased 4.7% to approximately $44.9 million for the six months ended June 30, 2026, from approximately $42.9 million for the six months ended June 30, 2025. As a percentage of sales, total cost of sales decreased to 69.6% for the six months ended June 30, 2026 from 70.0% for the six months ended June 30, 2025. Cost of sales by our Stran segment increased to approximately $31.7 million for the six months ended June 30, 2026 from approximately $28.3 million for the six months ended June 30, 2025. Cost of sales by our SLS segment decreased to approximately $13.2 million for the six months ended June 30, 2026 from approximately $14.6 million for the six months ended June 30, 2025. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 5.4% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the decrease was primarily attributable to lower sales and effective cost management.
Current report
Gross Profit
Current report
Gross profit by segment and in total were as follows (in thousands):
Current report
Operating Expenses
Current report
Other Income
Current report
Income Tax Provision
Current report
Net Income
Current report
Our net income for the six months ended June 30, 2026 was approximately $1.1 million, compared to net income of approximately $0.3 million for the six months ended June 30, 2025. This change was primarily due to an increase in gross profit for the reasons described above.
Removed paragraphs (2)
Previous report
Other Income (Expense)
Previous report
Net Income (Loss)
Reworded paragraphs (24)
Previous wording
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our,” and the “Company” are to Stran & Company, Inc., a Nevada corporation, and its consolidated subsidiaries; references to “Stran” or “Stran & Company, Inc.” are to Stran & Company, Inc., a Nevada corporation; references to “Stran Loyalty Solutions” or “SLS” are to Stran Loyalty Solutions, LLC, a Nevada limited liability company and a wholly-owned subsidiary of Stran & Company, Inc.; and references to “Gander Group Louisiana” are to Gander Group Louisiana, LLC, a Louisiana limited liability company, a wholly owned subsidiary of Stran Loyalty Solutions.
Current wording
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our,” and the “Company” are to Stran & Company, Inc., a Nevada corporation, and its consolidated subsidiaries; references to “Stran” or “Stran & Company, Inc.” are to Stran & Company, Inc., a Nevada corporation; references to “Stran Loyalty Solutions” or “SLS” are to Stran Loyalty Solutions, LLC, a Nevada limited liability company and a wholly-owned subsidiary of Stran & Company, Inc.; and references to “Gander Group Louisiana” are to Gander Group Louisiana, LLC, a Louisiana limited liability company, a wholly owned subsidiary of Stran Loyalty Solutions. References to “Stran segment” are to the unconsolidated operations of Stran & Company, Inc. References to “SLS segment” are to the operations of Stran Loyalty Solutions consolidated with the operations of Gander Group Louisiana. The Company’s reportable segments are further described in Note K to the financial statements accompanying this Quarterly Report on Form 10-Q.
Previous wording
The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the three months ended March 31, 2026 and 2025, program clients accounted for 85.3% and 83.8% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients. Our active customers are any organizations, businesses, or divisions of a parent organization which have purchased directly or indirectly from us within the last two years, and include organizations that have bought from other organizations for which Stran acts as an established sub-contractor. We define transactional customers as customers that place an order with us and do not have an agreement with us covering ongoing branding requirements. We define program clients as clients that have a contractual obligation for specific ongoing branding needs. Program offerings include ongoing inventory, use of technology platform, warehousing, creative services, and additional client support. Those program customers are geared towards longer-lasting relationships, which we believe will help secure recurring revenue well into the future.
Current wording
The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the three and six months ended June 30, 2026 program clients accounted for 81.3% and 83.3% of total revenue, respectively. For the three and six months ended June 30, 2025, program clients accounted for 80.2% and 81.8% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients. Our active customers are any organizations, businesses, or divisions of a parent organization which have purchased directly or indirectly from us within the last two years, and include organizations that have bought from other organizations for which Stran acts as an established sub-contractor. We define transactional customers as customers that place an order with us and do not have an agreement with us covering ongoing branding requirements. We define program clients as clients that have a contractual obligation for specific ongoing branding needs. Program offerings include ongoing inventory, use of technology platform, warehousing, creative services, and additional client support. Those program customers are geared towards longer-lasting relationships, which we believe will help secure recurring revenue well into the future.
Previous wording
On February 20, 2026, the U.S. Supreme Court held inLearning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating both the reciprocal tariffs and the fentanyl-related tariffs on Chinese imports described above as well as all other tariffs imposed under IEEPA. In response, the President immediately revoked the IEEPA tariff orders and, invoking Section 122 of the Trade Act of 1974, imposed a temporary 10% global import surcharge on most imports effective February 24, 2026, for 150 days, which the President subsequently announced would be increased to 15%. On April 20, 2026, U.S. Customs and Border Protection launched an internet portal to allow importers to process IEEPA duty refund requests (the “CBP Portal”). However, we cannot predict whether we will be able to collect any refunds of our payments of any such tariffs. At March 31, 2026, we have not recorded a tariff refund receivable due to the uncertainty of the amounts and collection of such tariff refunds.
Current wording
On February 20, 2026, the U.S. Supreme Court held inLearning Resources, Inc. v. Trump (consolidated with*Trump v. V.O.S. Selections, Inc.)*that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating both the reciprocal tariffs and the fentanyl-related tariffs on Chinese imports described above as well as all other tariffs imposed under IEEPA. In response, the President immediately issued an executive order terminating the IEEPA tariff orders, and U.S. Customs and Border Protection (“CBP”) halted collection of IEEPA-based duties effective 12:00 a.m. on February 24, 2026.
Previous wording
As a result of the above tariffs and tariff amendments and the ongoing uncertainties as to tariff refunds and future tariff rates, we have had to increase prices for certain products, and may be required to raise those prices further, which may result in the loss of customers. If prices cannot be increased, it may result in a negative impact on our gross margin. We have also attempted to shift away from Chinese suppliers in particular, and other foreign suppliers in general, and may seek to increase this shift due to U.S. tariffs or other aspects of U.S. trade policy, in an effort to reduce the effect of tariff increases on our product prices. However, due to the limited availability of competitive pricing from suppliers whose goods are not currently subject to tariffs or that are subject to relatively lower tariffs, and the possibility that some of the current or planned additional U.S. tariffs may increase, decrease, or become subject to exceptions or suspensions, with little or no prior notice, our ability to cost-effectively mitigate some of the effects of current and future scheduled U.S. tariffs may be significantly limited. These trends and uncertainties may result in additional costs and disruption to our operations, which may have a significant negative effect on the Company’s sales and gross margins in future periods. As a result, investors should not assume that any trends reflected in our past results that relate to periods preceding the increases in applicable U.S. tariffs since February 2025, including those that may be indicated below for the three months ended March 31, 2025, may be expected to continue to occur in future periods.
Current wording
As a result of the above tariffs and tariff amendments and the ongoing uncertainties as to tariff refunds and future tariff rates, we have had to increase prices for certain products, and may be required to raise those prices further, which may result in the loss of customers. If prices cannot be increased, it may result in a negative impact on our gross margin. We have also attempted to shift away from Chinese suppliers in particular, and other foreign suppliers in general, and may seek to increase this shift due to U.S. tariffs or other aspects of U.S. trade policy, in an effort to reduce the effect of tariff increases on our product prices. However, due to the limited availability of competitive pricing from suppliers whose goods are not currently subject to tariffs or that are subject to relatively lower tariffs, and the possibility that some of the current or planned additional U.S. tariffs may increase, decrease, or become subject to exceptions or suspensions, with little or no prior notice, our ability to cost-effectively mitigate some of the effects of current and future scheduled U.S. tariffs may be significantly limited. These trends and uncertainties may result in additional costs and disruption to our operations, which may have a significant negative effect on the Company’s sales and gross margins in future periods. As a result, investors should not assume that any trends reflected in our past results that relate to periods preceding the increases in applicable U.S. tariffs since February 2025, including those that may be indicated below for the six months ended June 30, 2026, may be expected to continue to occur in future periods.
Previous wording
During the quarter ended March 31, 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel, and the United States. These developments have not had a direct material impact on our results. However, we are exposed to volatility in energy and oil markets, which could impact manufacturing, transportation, and packaging costs. Maritime restrictions in the Strait of Hormuz will continue to influence this risk. Significant increases in fuel, utilities, and petroleum-based inputs may materially increase our cost of goods sold and logistics expenses, and these increases may not be fully offset through pricing actions, which could adversely impact our margins and operating results.
Current wording
During the three and six months ended June 30, 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel, and the United States. These developments have not had a direct material impact on our results. However, we are exposed to volatility in energy and oil markets, which could impact manufacturing, transportation, and packaging costs. Maritime restrictions in the Strait of Hormuz will continue to influence this risk. Significant increases in fuel, utilities, and petroleum-based inputs may materially increase our cost of goods sold and logistics expenses, and these increases may not be fully offset through pricing actions, which could adversely impact our margins and operating results.
Previous wording
Our sales for the three months ended March 31, 2026 increased 8.9% compared to sales for the three months ended March 31, 2025, which was due to higher spending from existing clients as well as business from new customers.
Current wording
Our sales for the three and six months ended June 30, 2026 increased 2.4% and 5.4%, respectively, compared to the same periods in 2025, due to higher spending from existing clients as well as business from new customers.
Previous wording
As of March 31, 2026, we had approximately $53.2 million of total assets with approximately $31.4 million of total stockholders’ equity.
Current wording
As of June 30, 2026, we had approximately $56.9 million of total assets with approximately $31.5 million of total stockholders’ equity.
Previous wording
Our total sales increased 8.9% to approximately $31.2 million for the three months ended March 31, 2026, from approximately $28.7 million for the three months ended March 31, 2025. Sales by our Stran segment increased to approximately $23.4 million for the three months ended March 31, 2026 from approximately $20.9 million for the three months ended March 31, 2025. Sales by our SLS segment (which consists of the business of Gander Group Louisiana) remained flat at approximately $7.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. For the Stran segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers. For the SLS segment, the increase in sales was primarily attributable to new business from new customers.
Current wording
Our total sales increased 2.4% to approximately $33.4 million for the three months ended June 30, 2026, from approximately $32.6 million for the three months ended June 30, 2025. Sales by our Stran segment increased to approximately $23.3 million for the three months ended June 30, 2026 from approximately $21.8 million for the three months ended June 30, 2025. Sales by our SLS segment decreased to approximately $10.1 million for the three months ended June 30, 2026 from approximately $10.8 million for the three months ended June 30, 2025. For the Stran segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers. For the SLS segment, the decrease in sales was primarily attributable to a decline in sales from existing customers.
Previous wording
Our total cost of sales increased 6.9% to approximately $21.6 million for the three months ended March 31, 2026, from approximately $20.2 million for the three months ended March 31, 2025. As a percentage of sales, total cost of sales decreased to 69.1% for the three months ended March 31, 2026 from 70.4% for the three months ended March 31, 2025. Cost of sales by our Stran segment increased to approximately $16.0 million for the three months ended March 31, 2026 from approximately $14.1 million for the three months ended March 31, 2025. Cost of sales by our SLS segment decreased to approximately $5.6 million for the three months ended March 31, 2026 from approximately $6.1 million for the three months ended March 31, 2025. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 8.9% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the decrease was primarily attributable to effective cost management.
Current wording
Our total cost of sales increased 2.8% to approximately $23.3 million for the three months ended June 30, 2026, from approximately $22.7 million for the three months ended June 30, 2025. As a percentage of sales, total cost of sales increased to 70.0% for the three months ended June 30, 2026 from 69.7% for the three months ended June 30, 2025. Cost of sales by our Stran segment increased to approximately $15.7 million for the three months ended June 30, 2026 from approximately $14.2 million for the three months ended June 30, 2025. Cost of sales by our SLS segment decreased to approximately $7.6 million for the three months ended June 30, 2026 from approximately $8.5 million for the three months ended June 30, 2025. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 2.4% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the decrease was primarily attributable to effective cost management and lower tariffs.
Previous wording
Gross profit margin is defined as gross profit as a percentage of sales. The increase in total gross profit margin to 30.9% for the three months ended March 31, 2026 from 29.6% for the three months ended March 31, 2025 was primarily due to a shift in our customer mix and margin contribution. The gross profit margin for the Stran segment decreased to 31.6% for the three months ended March 31, 2026 from 32.4% for the three months ended March 31, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 28.7% for the three months ended March 31, 2026 from 21.8% for the three months ended March 31, 2025 due to improved customer mix and effective cost management.
Current wording
Gross profit margin is defined as gross profit as a percentage of sales. The decrease in total gross profit margin to 30.0% for the three months ended June 30, 2026 from 30.3% for the three months ended June 30, 2025 was primarily due to a shift in our customer mix and margin contribution. The gross profit margin for the Stran segment decreased to 32.5% for the three months ended June 30, 2026 from 34.9% for the three months ended June 30, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 24.3% for the three months ended June 30, 2026 from 21.0% for the three months ended June 30, 2025 due to improved customer mix and effective cost management.
Previous wording
Operating expenses consist of general and administrative expenses. Our total operating expenses decreased (0.2)% to approximately $9.0 million for the three months ended March 31, 2026, from approximately $9.0 million for the three months ended March 31, 2025. Operating expenses of our Stran segment increased to approximately $6.2 million for the three months ended March 31, 2026 from approximately $5.6 million for the three months ended March 31, 2025. Operating expenses of our SLS segment decreased to approximately $1.7 million for the three months ended March 31, 2026 from approximately $2.2 million for the three months ended March 31, 2025. As a percentage of sales, total operating expenses decreased to 28.8% for the three months ended March 31, 2026, from 31.4% for the three months ended March 31, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 26.6% for the three months ended March 31, 2026 from 26.9% for the three months ended March 31, 2025. As a percentage of sales, operating expenses of our SLS segment decreased to 21.9% for the three months ended March 31, 2026 from 27.7% for the three months ended March 31, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to investment in STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs, higher expenses related to our e-commerce platform, Magento Open Source, and higher sales and marketing-related costs. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for “Other” consists of unallocated corporate costs, including salaries for our corporate officers, audit-related fees, board of director compensation, and other stock-related charges. Such costs decreased by approximately $0.2 million to approximately $1.1 million for the three months ended March 31, 2026, from approximately $1.2 million for the three months ended March 31, 2025. The decrease was primarily due to lower legal and accounting expenses related to the re-audit of historical financial statements.
Current wording
Operating expenses consist of general and administrative expenses. Our total operating expenses increased 4.9% to approximately $9.9 million for the three months ended June 30, 2026, from approximately $9.5 million for the three months ended June 30, 2025. Operating expenses of our Stran segment increased to approximately $6.9 million for the three months ended June 30, 2026 from approximately $6.5 million for the three months ended June 30, 2025. Operating expenses of our SLS segment decreased to approximately $2.0 million for the three months ended June 30, 2026 from approximately $2.1 million for the three months ended June 30, 2025. As a percentage of sales, total operating expenses increased to 29.8% for the three months ended June 30, 2026, from 29.1% for the three months ended June 30, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 29.8% for the three months ended June 30, 2026 from 30.0% for the three months ended June 30, 2025. As a percentage of sales, operating expenses of our SLS segment increased to 19.9% for the three months ended June 30, 2026 from 19.0% for the three months ended June 30, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to higher sales-related costs, and our investment in STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for “Other” consists of unallocated corporate costs, including salaries for our corporate officers, audit-related fees, board of director compensation, and other stock-related charges. Such costs increased by approximately $0.1 million to approximately $1.0 million for the three months ended June 30, 2026, from approximately $0.9 million for the three months ended June 30, 2025. The increase was primarily due to higher legal and accounting expenses.
Previous wording
Other income consists of other income (expense), interest income, and realized gain on investments. Our other income was approximately $78 thousand for the three months ended March 31, 2026, compared to other expense of approximately $(5) thousand for the three months ended March 31, 2025. This change was primarily attributable to a payment received from a settlement administrator. Our interest income was approximately $67 thousand for the three months ended March 31, 2026, compared to approximately $42 thousand for the three months ended March 31, 2025. This increase was primarily attributable to higher interest rates earned on program deposit balances, partially offset by slightly lower average program deposit balances compared to the same period in the prior year. Our realized gain on investments was $0 thousand for the three months ended March 31, 2026, compared to approximately $67 thousand for the three months ended March 31, 2025, since no investments were sold during the three months ended March 31, 2026.
Current wording
Other income consists of other income (expense), interest income, and realized gain on investments. Our other income, net was approximately $165 thousand for the three months ended June 30, 2026, compared to other income, net of approximately $285 thousand for the three months ended June 30, 2025. This change was primarily related to cost recoveries in 2025 for estimated shipping charges that did not reoccur in 2026. Our interest income was approximately $67 thousand for the three months ended June 30, 2026, compared to approximately $77 thousand for the three months ended June 30, 2025. This decrease was primarily attributable to lower average program deposit balances compared to the same period in the prior year, offset by slightly higher interest rates. Our realized gain on investments was $10 thousand for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025, since no investments were sold during the three months ended June 30, 2025.
Previous wording
Income tax provision for the three months ended March 31, 2026 was approximately $46 thousand compared to an income tax benefit of approximately $38 thousand for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 was 5.81%, based on income before income taxes of approximately $0.7 million. The effective tax rate for the three months ended March 31, 2025 was 8.9%, based on the loss before income taxes of approximately $0.4 million.
Current wording
Income tax provision for the three months ended June 30, 2026 was approximately $19 thousand compared to an income tax expense of approximately $114 thousand for the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026 was 5.9%, based on income before income taxes of approximately $0.3 million. The effective tax rate for the three months ended June 30, 2025 was 15.1%, based on income before income taxes of approximately $0.8 million.
Previous wording
Our net income for the three months ended March 31, 2026 was approximately $0.7 million, compared to net loss of approximately $0.4 million for the three months ended March 31, 2025. This change was primarily due to an increase in gross profit, and a decrease in operating expenses, for the reasons described above.
Current wording
Our net income for the three months ended June 30, 2026 was approximately $0.3 million, compared to net income of approximately $0.6 million for the three months ended June 30, 2025. This change was primarily due to an increase in operating expenses offset by an increase in gross profit for the reasons described above.
Previous wording
Gross profit consists of sales less total cost of sales. Our total gross profit increased 13.7% to approximately $9.6 million, or 30.9% of sales, for the three months ended March 31, 2026, from approximately $8.5 million, or 29.6% of sales, for the three months ended March 31, 2025. Gross profit of our Stran segment increased to approximately $7.4 million for the three months ended March 31, 2026 from approximately $6.8 million for the three months ended March 31, 2025. Gross profit of our SLS segment increased to approximately $2.2 million for the three months ended March 31, 2026 from approximately $1.7 million for the three months ended March 31, 2025. The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of approximately $2.5 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately $1.9 million for the reasons described above. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to improved customer mix and effective cost management.
Current wording
Gross profit consists of sales less total cost of sales. Our total gross profit increased 7.2% to approximately $19.7 million, or 30.4% of sales, for the six months ended June 30, 2026, from approximately $18.4 million, or 30.0% of sales, for the six months ended June 30, 2025. Gross profit of our Stran segment increased to approximately $15.0 million for the six months ended June 30, 2026 from approximately $14.4 million for the six months ended June 30, 2025. Gross profit of our SLS segment increased to approximately $4.7 million for the six months ended June 30, 2026 from approximately $4.0 million for the six months ended June 30, 2025. The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of approximately $4.0 million, which was partially offset by an increase of cost of sales of approximately $3.4 million for the reasons described above. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to improved customer mix and effective cost management.
Previous wording
As of March 31, 2026, we had cash and cash equivalents of approximately $7.6 million and investments of approximately $5.1 million. We have largely financed our operations primarily through cash generated from our initial public offering of common stock and warrants to purchase common stock in November 2021, our private placement of common stock and warrants to purchase common stock in December 2021, and positive cash flow this quarter.
Current wording
As of June 30, 2026, we had cash and cash equivalents of approximately $7.4 million and investments of approximately $5.2 million. We have largely financed our operations primarily through cash generated from our initial public offering of common stock and warrants to purchase common stock in November 2021, our private placement of common stock and warrants to purchase common stock in December 2021, and positive cash flow during the six months ended June 30, 2026.
Previous wording
The following table provides detailed information about our net cash flows for the three months ended March 31, 2026 and 2025 (in thousands).
Current wording
The following table provides detailed information about our net cash flows for the six months ended June 30, 2026 and 2025 (in thousands).
Previous wording
Net cash provided by operating activities was approximately $1.2 million for the three months ended March 31, 2026, as compared to net cash used in operating activities of approximately $5.9 million for the three March 31, 2025. The change was primarily due to net income this quarter, a decrease in cash used from the rewards program, and higher accounts payable and accruals as a result of timing. These increases were offset by higher vendor deposits for customer orders.
Current wording
Net cash provided by operating activities was approximately $1.6 million for the six months ended June 30, 2026, as compared to net cash provided by operating activities of approximately $0.5 million for the six months ended June 30, 2025. The change was primarily due to an increase in net income, an increase in unearned revenue, and higher accounts payable and accruals as a result of timing. These increases were offset by a decrease in cash provided by the rewards program, higher inventory, and prepaid deposits for customer orders, as a result of the timing of payments.
Previous wording
Net cash used in investing activities was approximately $0.3 million for the three months ended March 31, 2026, as compared to net cash provided by investing activities of approximately $0.8 million for the three months ended March 31, 2025. The change was primarily due to non-recurring redemptions of our investments from 2025.
Current wording
Net cash used in investing activities was approximately $0.3 million for the six months ended June 30, 2026, as compared to net cash provided by investing activities of approximately $3.7 million for the six months ended June 30, 2025. The change was primarily due to non-recurring redemptions of our investments from 2025.
Previous wording
Net cash used in financing activities was approximately $43 thousand for the three months ended March 31, 2026, as compared to approximately $40 thousand for the three months ended March 31, 2025. Net cash used in financing activities was primarily related to payments of installment loan liabilities, which remained consistent from period to period.
Current wording
Net cash used in financing activities was approximately $0.6 million for the six months ended June 30, 2026, as compared to approximately $0.5 million for the six months ended June 30, 2025. Net cash used in financing activities was primarily related to higher amounts spent to repurchase our common stock, payments of installment loan liabilities, which remained consistent from period to period, and lower amounts paid on earn-out liabilities.
Previous wording
Lease costs for the three months ended March 31, 2026 and 2025 totaled approximately $0.2 million and $0.2 million, respectively. We anticipate no deficiencies in our ability to make these payments.
Current wording
Lease costs for the three months ended June 30, 2026 and 2025 totaled approximately $0.2 million and $0.2 million, respectively. Lease costs for the six months ended June 30, 2026 and 2025 totaled approximately $0.4 million and $0.4 million, respectively. We anticipate no deficiencies in our ability to make these payments.
Previous wording
The Company manages reward card programs for clients. Under these programs, the Company receives cash and simultaneously records a liability for the total amount received. These accounts are adjusted on a periodic basis as reward cards are funded or reduced at the direction of the customers. As of March 31, 2026 and December 31, 2025, the Company had net reward card program liabilities totaling approximately $0.9 million and $1.5 million, respectively.
Current wording
The Company manages reward card programs for clients. Under these programs, the Company receives cash and simultaneously records a liability for the total amount received. These accounts are adjusted on a periodic basis as reward cards are funded or reduced at the direction of the customers. As of June 30, 2026 and December 31, 2025, the Company had net reward card program liabilities totaling approximately $3.0 million and $1.5 million, respectively.
Previous wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited consolidated financial statements that require estimation but are not deemed critical, as defined above.
Current wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, and that would have a material impact on our financial condition or results of operations. There are items within our unaudited consolidated financial statements that require estimation but are not deemed critical, as defined above.
Previous wording
For a discussion of recently adopted accounting pronouncements, seeRecently Issued Accounting Pronouncements in Note A to our financial statements beginning on page 11 of this Quarterly Report on Form 10-Q.
Current wording
For a discussion of recently adopted accounting pronouncements, seeRecently Issued Accounting Pronouncements in Note A to our financial statements accompanying this Quarterly Report on Form 10-Q.
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Current report — wording carried from elsewhere
Gross profit consists of sales less total cost of sales. Our total gross profit increased 1.6 % to approximately $10.0 million, or 30.0% of sales, for the three months ended June 30, 2026, from approximately $9.9 million, or 30.3% of sales, for the three months ended June 30, 2025. Gross profit of our Stran segment was approximately $7.6 million for each of the three months ended June 30, 2026 and the three months ended June 30, 2025. Gross profit of our SLS segment increased to approximately $2.5 million for the three months ended June 30, 2026 from approximately $2.3 million for the three months ended June 30, 2025. The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. For the Stran segment, the decrease in the dollar amount of gross profit was due to customer mix. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to improved customer mix, effective cost management, and lower tariffs.
Current report — wording carried from elsewhere
The following table sets forth key components of our results of operations during the six months ended June 30, 2026 and 2025 both in dollars and as a percentage of our sales.
Current report — wording carried from elsewhere
Sales consist primarily of the selling price of the merchandise, service or outbound shipping and handling charges, less discounts, coupons redeemed, returns and credits. Sales by segment and in total were as follows (in thousands):
Current report — wording carried from elsewhere
Cost of sales by segment and in total were as follows (in thousands):
Current report — wording carried from elsewhere
Gross profit margin is defined as gross profit as a percentage of sales. The increase in total gross profit margin to 30.4% for the six months ended June 30, 2026 from 30.0% for the six months ended June 30, 2025 was primarily due to a shift in our customer mix and margin contribution. The gross profit margin for the Stran segment decreased to 32.1% for the six months ended June 30, 2026 from 33.7% for the six months ended June 30, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 26.2% for the six months ended June 30, 2026 from 21.4% for the six months ended June 30, 2025 due to improved customer mix and effective cost management.
Current report — wording carried from elsewhere
The gross profit and gross profit margin for the remainder of 2026 will be largely dependent on revenue levels.
Current report — wording carried from elsewhere
Operating expenses by segment and in total were as follows (in thousands):
Current report — wording carried from elsewhere
Operating expenses consist of general and administrative expenses. Our total operating expenses increased 2.4% to approximately $18.9 million for the six months ended June 30, 2026, from approximately $18.5 million for the six months ended June 30, 2025. Operating expenses of our Stran segment increased to approximately $13.2 million for the six months ended June 30, 2026 from approximately $12.2 million for the six months ended June 30, 2025. Operating expenses of our SLS segment decreased to approximately $3.7 million for the six months ended June 30, 2026 from approximately $4.2 million for the six months ended June 30, 2025. As a percentage of sales, total operating expenses decreased to 29.3% for the six months ended June 30, 2026, from 30.2% for the six months ended June 30, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 28.2% for the six months ended June 30, 2026 from 28.5% for the six months ended June 30, 2025. As a percentage of sales, operating expenses of our SLS segment decreased to 20.8% for the six months ended June 30, 2026 from 22.6% for the six months ended June 30, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to increased headcount and employee-related costs, higher sales-related costs, and our investment in STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for “Other” consists of unallocated corporate costs, including salaries for our corporate officers, audit-related fees, board of director compensation, and other stock-related charges. Such costs decreased by approximately $78 thousand to approximately $2.1 million for the six months ended June 30, 2026, from approximately $2.1 million for the six months ended June 30, 2025. The decrease was primarily due to lower legal and accounting expenses.
Current report — wording carried from elsewhere
Other income consists of other income (expense), interest income, and realized gain on investments. Our other income, net was approximately $243 thousand for the six months ended June 30, 2026, compared to other income, net of approximately $280 thousand for the six months ended June 30, 2025. This change was primarily related to cost recoveries from prior periods for estimated shipping charges. Our interest income was approximately $134 thousand for the six months ended June 30, 2026, compared to approximately $119 thousand for the six months ended June 30, 2025. This increase was primarily attributable to higher interest rates earned on program deposit balances, partially offset by slightly lower average program deposit balances compared to the same period in the prior year. Our realized gain on investments was $10 thousand for the six months ended June 30, 2026, compared to approximately $67 thousand for the six months ended June 30, 2025, due to the reduced amount of investments sold in 2026 when compared to the same period in 2025.
Current report — wording carried from elsewhere
Income tax provision reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences.
Current report — wording carried from elsewhere
Income tax provision for the six months ended June 30, 2026 was approximately $65 thousand compared to an income tax expense of approximately $76 thousand for the six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026 was 5.8%, based on income before income taxes of approximately $1.1 million. The effective tax rate for the six months ended June 30, 2025 was 23.3%, based on income before income taxes of approximately $0.3 million.
Current report — wording carried from elsewhere
The change in the effective tax rate from the comparison of 2026 and 2025 as noted above primarily relates to our estimated earnings and the Company’s position that its deferred tax assets require a full valuation allowance.
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Previous report — wording carried elsewhere
Gross profit and gross profit margin by segment and in total were as follows (in thousands):