Contradictions in Strategy: ALP and FRE's Diverging Paths in Distribution and Marketing

Revenue and Modern Oral Growth:
- Turning Point Brands reported revenue of $116.6 million for Q2 2025, up 25% year-over-year.
- The increase was driven by the Modern Oral segment, which accounted for 26% of total revenue, with nicotine pouch sales nearly double the previous quarter's guidance.

Adjusted EBITDA and Guidance Increase:
- Adjusted EBITDA increased by 15% to $30.5 million for the quarter, and the guidance was raised to a range of $110 million to $114 million.
- This was due to strong performance in the Modern Oral segment and increased investment in sales and marketing.

White Pouch Sales and Market Potential:
- White pouch sales, including FRE and ALP, increased by nearly 8x year-over-year and were up 35% sequentially.
- The growth was attributed to the unique characteristics of the products, strong consumer reception, and strategic investments in brand expansion.

Gross Margin Improvement:
- Gross margin for the quarter was 57.1%, an increase of 310 basis points year-over-year and 110 basis points sequentially.
- The improvement was mix-driven, with strong contributions from the Modern Oral segment and Stoker's portfolio.

Sales Force Expansion and Investment:
- The company plans to double the size of its sales force by the end of 2026, aiming to enhance distribution and merchandising efforts.
- These investments are part of the strategic initiative to prioritize the Modern Oral segment and maximize brand value.