22nd Century 2025 Q2 Earnings Worse Net Loss Despite EPS Improvement

22nd Century reported its fiscal 2025 Q2 earnings on August 14, 2025, showing mixed results amid a strategic shift in focus. The company significantly narrowed its per-share loss, but its net loss more than doubled compared to the prior year, raising questions about its near-term financial sustainability. Management outlined a transition to higher-margin branded offerings, while acknowledging ongoing challenges in scaling operations and maintaining liquidity.

Revenue

22nd Century’s total revenue declined sharply to $4.08 million in the second quarter of 2025, representing a 48.6% drop from $7.95 million in the same period the previous year. The Contract Manufacturing segment led the company’s performance with $4.13 million in revenue, while Cigarettes generated $2.71 million. Filtered Cigars contributed $1.32 million, Cigarillos accounted for $94,000, and the VLN segment posted a negative $45,000. Total Product Line Revenues amounted to $4.08 million, underscoring the broad-based nature of the decline.

Earnings/Net Income

22nd Century significantly improved its earnings per share (EPS), narrowing the loss to $13.61 per share in 2025 Q2 compared to $593.72 per share in 2024 Q2—a 97.7% improvement. However, the company’s net loss worsened to $3.41 million, marking a 206.4% increase from the $1.11 million loss in the prior-year quarter. This highlights the divergence between per-share metrics and overall financial health, as cost reductions failed to offset revenue contraction.

Price Action

Shares of 22nd Century edged up by 0.84% during the latest trading day, but fell 3.23% over the past full trading week. The stock has experienced a sharp downturn of 49.47% month-to-date, reflecting investor uncertainty amid declining revenue and persistent losses.

Post-Earnings Price Action Review

A strategy of buying 22nd Century shares following its Q2 earnings report and holding for 30 days resulted in a catastrophic -100.00% return, significantly underperforming the benchmark. The approach had a Sharpe ratio of -0.65 and an excess return of -146.48%, indicating extreme risk with no measurable downside cushion, as the maximum drawdown was recorded at 0.00%.

CEO Commentary

Lawrence D. Firestone, CEO, emphasized 22nd Century’s strategic transformation into a tobacco harm reduction company, leveraging its 27-year expertise in low-nicotine technology. He highlighted the potential of the FDA’s proposed low-nicotine mandate and noted that the company’s 95% low-nicotine VLN cigarettes are the only FDA-authorized compliant product. Firestone outlined a shift toward branded products through partnerships with Smoker-Friendly and Pinnacle brands, signaling a pivot from low-margin CMO exports. While near-term revenue is expected to decline, Firestone expressed optimism about improved gross margins and long-term profitability.

Guidance

Daniel A. Otto, CFO, provided guidance for breakeven EBITDA in the first half of 2026, contingent on the success of high-margin VLN and Partner VLN products. The company anticipates continued R&D investment to sustain its low-nicotine intellectual property and support FDA regulatory efforts. With approximately $3 million in cash, the company believes it can fund operations through early 2026. Management also indicated potential capital raises and plans to refinance or settle debt maturing in March 2026 as part of broader capital management strategies.

Additional News

Nigeria’s political landscape remained turbulent as the Peoples Democratic Party (PDP) and All Progressives Congress (APC) rejected a Canadian court judgment that labeled them as terrorist organizations. Meanwhile, President Bola Tinubu traveled to Japan and Brazil for bilateral talks, and opposition leaders criticized his foreign engagements. In the business sector, Nigeria’s economic growth concerns intensified following comments by Peter Obi, who noted declining foreign direct investment. Additionally, the Economic and Financial Crimes Commission (EFCC) denied targeting former President Olusegun Obasanjo and arraigned suspects in ongoing investigations.