Stran & Company, Inc.
For the period ended Sep 30, 2026. Filed Nov 10, 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.
Sep 30, 2026 · Filed Nov 10, 2026
SWAG$1.28-3.0%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious 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 OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001213900-26-118061
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 98 previous paragraphs and 98 current paragraphs.
61 unchanged; 31 reworded; 6 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 36 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 (6)
Current report
On February 20, 2026, the U.S. Supreme Court held inLearning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs and collection of IEEPA-based duties ended on February 24, 2026. The IEEPA tariffs were replaced first by a temporary 10% global import surcharge under Section 122 of the Trade Act of 1974, which expired on July 24, 2026.
Current report
U.S. Customs and Border Protection (“CBP”) has established a phased process for refunding IEEPA duties previously paid by importers. Eligibility for later phases remains subject to ongoing litigation. During the three months ended September 30, 2026, SLS received tariff refunds of approximately $248 thousand. Of that amount, approximately $7 thousand was passed through to a customer, and the net refund of approximately $241 thousand was recorded as a reduction of cost of sales.
Current report
Tariffs and changes in trade policy have required us to raise prices on certain products, and may require further increases, which could result in the loss of customers, or, if prices cannot be increased, lower gross margins. We have sought to shift sourcing away from Chinese and other foreign suppliers, but our ability to do so cost-effectively is limited. Accordingly, investors should not assume that trends in our past results, including for the nine months ended September 30, 2026, will continue in future periods.
Current report
Our total sales increased 8.2% to approximately $28.1 million for the three months ended September 30, 2026, from approximately $26.0 million for the three months ended September 30, 2025. Sales by our Stran segment increased to approximately $18.5 million for the three months ended September 30, 2026 from approximately $17.6 million for the three months ended September 30, 2025. Sales by our SLS segment increased to approximately $9.6 million for the three months ended September 30, 2026 from approximately $8.3 million for the three months ended September 30, 2025. For the Stran segment, the increase in sales was primarily due to business from new customers and higher spending from existing clients. For the SLS segment, the increase in sales was primarily attributable to new business from existing clients.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
Net Income (Loss)
Removed paragraphs (6)
Previous report
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 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.
Previous report
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 report
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 report
Comparison of Six Months Ended June 30, 2026 and 2025
Reworded paragraphs (31)
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 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.
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 nine months ended September 30, 2026 program clients accounted for 84% and 85% of total revenue, respectively. For the three and nine months ended September 30, 2025, program clients accounted for 78% and 80% 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
We have historically imported many of the goods or components used in our promotional products business from China in particular and to some extent from other countries. Since February 2025 and as of the date of this report, the United States has implemented and repeatedly amended additional country-specific tariffs on goods imported from other countries, with significant changes affecting imports from China. In May 2025, the United States temporarily reduced previously-imposed additional “reciprocal” and fentanyl-related tariffs at a combined rate of 145% on most goods imported from China to a combined rate of 30%, and in August 2025 extended this temporary combined rate on Chinese imports until November 10, 2025. In November 2025, these tariffs were further reduced to a combined rate of approximately 20%. For low-value items of Chinese or Hong Kong origin valued at or below $800 and moving via the international postal stream, duty-free treatment ended May 2, 2025. Since May 14, 2025, such postal shipments have generally been subject to either a 54% ad valorem duty or a $100 per-item postal fee. Separately, the United States eliminated duty-free de minimis treatment for imports from all other countries effective August 29, 2025. In addition, the United States has introduced and adjusted reciprocal tariff rates on imports from numerous trading partners. Since August 7, 2025, additional “reciprocal” tariff rates applicable to most goods from covered countries vary by country between approximately 10% and 41%, with many commonly in the 15%-40% range after later adjustments and exemptions. These additional country-specific tariffs were effected alongside a general increase in separate U.S. tariffs against imports based on product type or sector, as well as, in certain cases, country of origin, in some cases modified by exemptions or other adjustments.
Current wording
We have historically imported many of the goods and components used in our promotional products business from China and, to a lesser extent, other countries. Beginning in February 2025, the United States imposed and repeatedly amended additional country-specific tariffs under the International Emergency Economic Powers Act (“IEEPA”), with significant changes affecting imports from China. The United States also eliminated duty-free de minimis treatment for low-value imports.
Previous wording
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 wording
Effective July 24, 2026, they were replaced by tariffs of 10% or 12.5% (including 12.5% on imports from China) under Section 301 of the Trade Act of 1974 on imports from 60 trading partners subject to various product- and country-specific exemptions.
Previous 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.
Current wording
During the three and nine months ended September 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 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.
Current wording
Our sales for the three and nine months ended September 30, 2026 increased 8.2% and 6.3%, 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 June 30, 2026, we had approximately $56.9 million of total assets with approximately $31.5 million of total stockholders’ equity.
Current wording
As of September 30, 2026, we had approximately $52.2 million of total assets with approximately $31.3 million of total stockholders’ equity.
Previous wording
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur (subject to certain exceptional circumstances) if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.
Current wording
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the fifth anniversary of our initial public offering occurs, which will be December 31, 2026, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur (subject to certain exceptional circumstances) if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.
Previous 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.
Current wording
Our total cost of sales decreased 0.9% to approximately $18.7 million for the three months ended September 30, 2026, from approximately $18.9 million for the three months ended September 30, 2025. As a percentage of sales, total cost of sales decreased to 66.7% for the three months ended September 30, 2026 from 72.8% for the three months ended September 30, 2025. Cost of sales by our Stran segment remained constant at approximately $12.1 million for the three months ended September 30, 2026 from approximately $12.1 million for three months ended September 30, 2025. Cost of sales by our SLS segment decreased to approximately $6.6 million for the three months ended September 30, 2026 from approximately $6.8 million for the three months ended September 30, 2025. The decrease in the dollar amount of total cost of sales was primarily due to cost management and a tariff refund of approximately $0.2 million received during the three months ended September 30, 2026. For the Stran segment, the decrease was primarily due to effective cost management. For the SLS segment, the decrease was primarily attributable to effective cost management and lower tariffs in addition to the tariff refund described above.
Previous wording
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 wording
Gross profit consists of sales less total cost of sales. Our total gross profit increased 32.4% to approximately $9.4 million, or 33.3% of sales, for the three months ended September 30, 2026, from approximately $7.1 million, or 27.2% of sales, for the three months ended September 30, 2025. Gross profit of our Stran segment increased to $6.4 million approximately for three months ended September 30, 2026 from approximately $5.5 million for the three months ended September 30, 2025. Gross profit of our SLS segment increased to approximately $3.0 million for the three months ended September 30, 2026 from approximately $1.6 million for the three months ended September 30, 2025. The increase in the dollar amount of total gross profit was primarily attributable to customer mix, effective cost management and the tariff refund received during the quarter ending September 30, 2026. For the Stran segment, the increase 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 in addition to the tariff refund received during the quarter ending September 30, 2026.
Previous 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.
Current wording
Gross profit margin is defined as gross profit as a percentage of sales. The increase in total gross profit margin to 33.3% for the three months ended September 30, 2026 from 27.2% for the three months ended September 30, 2025 was primarily due to a shift in our customer mix and margin contribution. The gross profit margin for the Stran segment increased to 34.4% for the three months ended September 30, 2026 from 31.2% for the three months ended September 30, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 31.2% for the three months ended September 30, 2026 from 18.7% for the three months ended September 30, 2025 due to improved customer mix, effective cost management and the tariff refund received during the quarter ending September 30, 2026.
Previous 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.
Current wording
Operating expenses consist of general and administrative expenses. Our total operating expenses increased 7.5% to approximately $9.5 million for the three months ended September 30, 2026, from approximately $8.9 million for the three months ended September 30, 2025. Operating expenses of our Stran segment increased to approximately $6.4 million for the three months ended September 30, 2026 from approximately $6.2 million for the three months ended September 30, 2025. Operating expenses of our SLS segment increased to approximately $2.3 million for the three months ended September 30, 2026 from approximately $2.0 million for the three months ended September 30, 2025. As a percentage of sales, total operating expenses decreased to 33.9% for the three months ended September 30, 2026, from 34.1% for the three months ended September 30, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 34.4% for the three months ended September 30, 2026 from 34.9% for the three months ended September 30, 2025. As a percentage of sales, operating expenses of our SLS segment increased to 24.1% for the three months ended September 30, 2026 from 23.6% for the three months ended September 30, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to higher employee-related costs, and our investment in STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs. For the SLS segment, the increase in the dollar amount of operating expenses was primarily attributable to 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 $0.8 million for the three months ended September 30, 2026, from approximately $0.7 million for the three months ended September 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, 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.
Current wording
Other income consists of other income, interest income, and realized gain on investments. Our other income, net was approximately $126 thousand for the three months ended September 30, 2026, compared to other income, net of approximately $304 thousand for the three months ended September 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 $99 thousand for the three months ended September 30, 2026, compared to approximately $87 thousand for the three months ended September 30, 2025. This increase was primarily attributable to higher investment balances and market rates compared to the same period in the prior year offset by slightly lower average program deposits. Our realized gain on investments was $2 thousand for the three months ended September 30, 2026, compared to $79 thousand for the three months ended September 30, 2025. The decrease in realized gain on investments reflects our utilization of cash to support the Company’s operating activities.
Previous 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.
Current wording
Income tax provision for the three months ended September 30, 2026 was approximately $39 thousand compared to an income tax benefit of approximately $72 thousand for the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 2026 was 52.2%, based on income before income taxes of approximately $0.1 million. The effective tax rate for the three months ended September 30, 2025 was 5.5%, based on loss before income taxes of approximately $1.3 million.
Previous 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.
Current wording
Our net income for the three months ended September 30, 2026 was approximately $35 thousand, compared to net loss of approximately $1.2 million for the three months ended September 30, 2025. This change was primarily due to an increase in gross profit for the reasons described above, offset by an increase in operating expenses.
Previous wording
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 wording
The following table sets forth key components of our results of operations during the nine months ended September 30, 2026 and 2025 both in dollars and as a percentage of our sales.
Previous wording
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 wording
Our total sales increased 6.3% to approximately $92.7 million for the nine months ended September 30, 2026, from approximately $87.3 million for the nine months ended September 30, 2025. Sales by our Stran segment increased to approximately $65.2 million for the nine months ended September 30, 2026 from approximately $60.3 million for the nine months ended September 30, 2025. Sales by our SLS segment increased to approximately $27.5 million for the nine months ended September 30, 2026 from approximately $26.9 million for the nine months ended September 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 increase in sales was primarily attributable to higher spending from existing clients as well as from new business.
Previous wording
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 wording
Our total cost of sales increased 3.0% to approximately $63.7 million for the nine months ended September 30, 2026, from approximately $61.8 million for the nine months ended September 30, 2025. As a percentage of sales, total cost of sales decreased to 68.7% for the nine months ended September 30, 2026 from 70.9% for the nine months ended September 30, 2025. Cost of sales by our Stran segment increased to approximately $43.8 million for the nine months ended September 30, 2026 from approximately $40.4 million for the nine months ended September 30, 2025. Cost of sales by our SLS segment decreased to approximately $19.8 million for the nine months ended September 30, 2026 from approximately $21.4 million for the nine months ended September 30, 2025. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 6.3% 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 the receipt of approximately $0.2 million tariff refund.
Previous 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.
Current wording
Gross profit consists of sales less total cost of sales. Our total gross profit increased 14.2% to approximately $29.0 million, or 31.3% of sales, for the nine months ended September 30, 2026, from approximately $25.4 million, or 29.1% of sales, for the nine months ended September 30, 2025. Gross profit of our Stran segment increased to approximately $21.3 million for the nine months ended September 30, 2026 from approximately $19.9 million for the nine months ended September 30, 2025. Gross profit of our SLS segment increased to approximately $7.7 million for the nine months ended September 30, 2026 from approximately $5.5 million for the nine months ended September 30, 2025. The increase in the dollar amount of total gross profit was primarily attributable to an increase in sales volume. For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of approximately $4.8 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, effective cost management and the receipt of approximately $0.2 million tariff refund.
Previous wording
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 wording
Gross profit margin is defined as gross profit as a percentage of sales. The increase in total gross profit margin to 31.3% for the nine months ended September 30, 2026 from 29.1% for the nine months ended September 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 32.7% for the nine months ended September 30, 2026 from 33.0% for the nine months ended September 30, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 28.0% for the nine months ended September 30, 2026 from 20.5% for the nine months ended September 30, 2025 due to improved customer mix, effective cost management and the receipt of approximately $0.2 million tariff refund.
Previous wording
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 wording
Operating expenses consist of general and administrative expenses. Our total operating expenses increased 4.0% to approximately $28.4 million for the nine months ended September 30, 2026, from approximately $27.3 million for the nine months ended September 30, 2025. Operating expenses of our Stran segment increased to approximately $19.5 million for the nine months ended September 30, 2026 from approximately $18.3 million for the nine months ended September 30, 2025. Operating expenses of our SLS segment decreased to approximately $6.0 million for the nine months ended September 30, 2026 from approximately $6.2 million for the nine months ended September 30, 2025. As a percentage of sales, total operating expenses decreased to 30.7% for the nine months ended September 30, 2026, from 31.3% for the nine months ended September 30, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 30.0% for the nine months ended September 30, 2026 from 30.4% for the nine months ended September 30, 2025. As a percentage of sales, operating expenses of our SLS segment decreased to 21.9% for the nine months ended September 30, 2026 from 22.9% for the nine months ended September 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 increased by approximately $36 thousand to approximately $2.9 million for the nine months ended September 30, 2026, from approximately $2.9 million for the nine months ended September 30, 2025. The increase was primarily due to higher payroll related costs offset by lower legal and accounting expenses.
Previous wording
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 wording
Other income consists of other income, interest income, and realized gain on investments. Our other income, net was approximately $369 thousand for the nine months ended September 30, 2026, compared to other income, net of approximately $584 thousand for the nine months ended September 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 $233 thousand for the nine months ended September 30, 2026, compared to approximately $206 thousand for the nine months ended September 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 $12 for the nine months ended September 30, 2026, compared to approximately $146 thousand for the nine months ended September 30, 2025, due to the reduced amount of investments sold in 2026 when compared to the same period in 2025.
Previous wording
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 wording
Income tax provision for the nine months ended September 30, 2026 was approximately $104 thousand compared to an income tax expense of approximately $4 thousand for the nine months ended September 30, 2025. The effective tax rate for the nine months ended September 30, 2026 was 8.7%, based on income before income taxes of approximately $1.2 million. The effective tax rate for the nine months ended September 30, 2025 was (0.4)%, based on loss before income taxes of approximately $1.0 million.
Previous wording
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.
Current wording
Our net income for the nine months ended September 30, 2026 was approximately $1.1 million, compared to net loss of approximately $1.0 million for the nine months ended September 30, 2025. This change was primarily due to an increase in gross profit, for the reasons described above.
Previous 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.
Current wording
As of September 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 from operating activities during the nine months ended September 30, 2026.
Previous wording
We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both the 12 months ended June 30, 2027 and in the long-term beyond this period, including our anticipated costs associated with being a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
Current wording
We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both the 12 months ending September 30, 2027 and in the long-term beyond this period, including our anticipated costs associated with being a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities would result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
Previous wording
The following table provides detailed information about our net cash flows for the six months ended June 30, 2026 and 2025 (in thousands).
Current wording
The following table provides detailed information about our net cash flows for the nine months ended September 30, 2026 and 2025 (in thousands).
Previous 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.
Current wording
Net cash provided by operating activities was approximately $1.8 million for the nine months ended September 30, 2026, as compared to net cash used in operating activities of approximately $4.8 million for the nine months ended September 30, 2025. The change was primarily due to an increase in net income, an increase in unearned revenue, a decrease in accounts receivable, 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 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 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.
Current wording
Net cash used in investing activities was approximately $0.4 million for the nine months ended September 30, 2026, as compared to net cash provided by investing activities of approximately $3.1 million for the nine months ended September 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 $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.
Current wording
Net cash used in financing activities was approximately $0.8 million for the nine months ended September 30, 2026, as compared to approximately $1.0 million for the nine months ended September 30, 2025. The change in net cash used in financing activities was primarily related to lower amounts paid on earn-out liabilities and for stock repurchases.
Previous 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.
Current wording
Lease costs for the three months ended September 30, 2026 and 2025 totaled approximately $0.2 million and $0.2 million, respectively. Lease costs for the nine months ended September 30, 2026 and 2025 totaled approximately $0.5 million and $0.6 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 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.
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 September 30, 2026 and December 31, 2025, the Company had net reward card program liabilities totaling approximately $0.9 million and $1.5 million, respectively.