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Synergy CHC (NASDAQ:SNYR) executives highlighted what CEO Jack Ross called a “year of transition” in 2025, while also pointing to strategic initiatives they said are intended to position the company for longer-term growth. On the company’s fourth-quarter and full-year earnings call, management discussed a terminated international license agreement that resulted in a revenue reversal, investments to build inventory for its ready-to-drink (RTD) beverage business, and plans to restart television advertising to support retail performance.
License termination drives revenue reversal
Ross opened by addressing an 8-K filing tied to the company’s international license agreement covering the United Arab Emirates and Turkey. He said Synergy expanded an international license partnership in mid-2025 to include those territories “for a baseline licensing fee with additional royalties tied to product performance,” but the licensee elected to terminate due to “increasing instability and uncertainty across the region.”
Ross described the outcome as “macro volatility outside of our control rather than any change in our conviction around the potential of FOCUSfactor internationally,” adding that Synergy continues to view the U.A.E. and Turkey as attractive multi-year growth markets and said groundwork laid in 2025 “hasn’t been lost.”
Fourth-quarter results reflect one-time items
Fickett reported fourth-quarter net revenue of $6.07 million, down from $10.27 million in the year-ago quarter, a 41% decrease. She attributed the decline primarily to the license agreement termination. “Without that reversal,” she said, net revenue would have been $8.97 million, representing a 12.7% decrease.
Gross margin for the quarter was 36.6%, compared with 63.3% in the prior-year quarter. Fickett said the decline was “primarily driven” by the $2.9 million license termination impact and a $1.04 million write-off of obsolete inventory. Excluding those items, she said gross margin would have been 68.8%, higher than the prior year.
Operating expenses rose to $15.53 million from $5.14 million a year earlier. Fickett said the increase was largely due to one-time items: a $6.6 million allowance for bad debt and a $0.9 million write-off of prepaid media credits. Excluding those items, she said operating expenses would have been $8 million, with most of the remaining increase tied to professional fees related to corporate development.
Synergy reported a loss from operations of $13.31 million for the quarter, versus operating income of $1.35 million in the fourth quarter of 2024. Net loss was $14.82 million, or $1.35 per diluted share, compared with net income of $105,700, or $0.01 per diluted share, a year earlier. Fickett said that, excluding the one-time items discussed on the call, net loss would have been $3.35 million, still impacted by higher professional fees.
EBITDA for the quarter was a loss of $13.28 million, compared with EBITDA income of $1.68 million in the prior-year quarter. Adjusted EBITDA was a loss of $4.48 million, compared with adjusted EBITDA income of $2.79 million a year ago.
Full-year 2025 revenue declines; adjusted EBITDA remains positive
For the full year, Fickett reported revenue of $30.38 million, compared with $34.83 million in 2024. Excluding the reversal of $2.9 million in license revenue, she said net revenue would have been $33.28 million in 2025.
Gross margin for 2025 was 66.8% versus 67.9% a year earlier. Excluding the inventory write-off, Fickett said gross margin would have been 70.3%, an increase over the prior year.
Operating expenses totaled $28.76 million, up from $17.84 million in 2024. Excluding the one-time items referenced in her prepared remarks, operating expenses would have been $21.24 million, which Fickett said was still impacted by increased professional fees for corporate development.
Loss from operations was $8.46 million for 2025, compared with operating income of $5.8 million a year earlier. Fickett said that without the one-time items, full-year operating income would have been $3 million.
Net loss for the year was $12.3 million, or $1.27 per diluted share, versus net income of $2.1 million, or $0.28 per diluted share, in 2024. Fickett said results were also affected by “a gain on the settlement of our notes payable of $2.15 million.” Excluding the referenced items, she said full-year net loss would have been $3.03 million.
EBITDA for 2025 was a loss of $6.19 million, compared with EBITDA of $6.46 million in 2024. Adjusted EBITDA income was $800,000, down from adjusted EBITDA income of $7.35 million a year earlier.
Balance sheet update: cash rises; inventory builds
As of December 31, 2025, Synergy had cash and cash equivalents of $2.6 million, up from $687,900 at the end of 2024. Inventory rose to $3.7 million from $1.7 million at the end of 2024.
Total liabilities were $33.3 million at year-end 2025, compared with $33.0 million at year-end 2024. Working capital improved to a surplus of $1.78 million, compared with a deficit of $1.12 million a year earlier.
Cash used in operating activities was $2.6 million for 2025, versus $4.8 million in 2024. Fickett attributed the improvement mainly to higher non-cash charges such as bad debt write-offs and stock-based compensation, as well as improved collections and accounts receivable, partially offset by higher inventory investment and the gain on debt settlement.
RTD beverage momentum, Mexico expansion, and advertising plans
Ross emphasized growth initiatives in beverages and international markets. He said Synergy established a wholly owned subsidiary in Mexico during 2025 and began product shipments to Costco de México in December. He also said that in the first quarter of 2026, the beverage side generated “over $600,000 in gross revenue,” surpassing the entire 2025 revenue, which he said “now equates to $2.5 million run rate for 2026.”
Ross said the company shipped Focus and Energy RTDs and shots to new distribution locations, including EG America (parent of Cumberland Farms), Wakefern Food Corp., Indian Nation Wholesale, and multiple distributors. He added that Synergy has “millions of cans of RTDs and shots in stock and ready to ship” and expects 2026 to be “a foundational growth year” for the beverage division.
On the supplements side, Ross said the company recently shipped three new SKUs to all 1,600 Kroger locations. He also pointed to restarting television advertising as a key initiative the company did not achieve in 2025. “We will be diligently working towards executing this in 2026 to drive same store growth within our key retailers,” Ross said, adding that based on past results, the company expects “at least a 15% lift in same store sales” once TV advertising resumes.
During the Q&A, Roth Capital Partners analyst Sean McGowan asked why RTD revenue was not higher in the fourth quarter. Ross said the company raised money in August to build inventory and that production lead times meant Synergy received the majority of RTD inventory “in-house in December.” Ross also said the company’s go-to-market approach for RTDs has not changed, characterizing distribution gains as driven by planograms and a retail sales cycle. He added that the company expects Costco roadshows “in different regions” and a BJ’s roadshow, which he said could be “meaningful growth” for beverages.
McGowan also asked about Flat Tummy, and Ross said the brand “continues to decline,” adding that the weight loss category is being “heavily impacted by the GLP-1s” and that the company will make “a strategic decision on Flat Tummy in the near future.”
Asked about gross margin outlook, Fickett said the company anticipates gross margin will “maintain its current level or increase,” clarifying she meant on a normalized basis excluding the one-time items that affected reported results.
Ascendiant Capital’s Edward Woo asked whether Synergy plans to open additional international subsidiaries beyond Mexico. Ross said the company does not have plans to open other international markets directly “at this time,” adding that 2026 is focused on executing existing initiatives in Mexico, restarting TV advertising, driving same-store growth, and expanding the beverage business.
About Synergy CHC (NASDAQ:SNYR)
Synergy CHC Corp. engages in the marketing and distribution of branded health and wellness products. The company was founded on December 29, 2010 and is headquartered in Westbrook, ME.
