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- **Operational Resilience**: Flat revenue ($12M) outperformed firearm market decline, with 24% EBITDA growth to $4.9M.
- **Cost Transformation**: $6.7M YoY expense reduction drove $1.4M net income and $2.3M cash generation.
- **Market Leadership**: 3% YOY growth in firearm sales vs. 5% industry decline, with used firearms GMV up 7.8%.
- **Strategic Momentum**: $65.7M cash position supports share buybacks, with plans to exceed $25M EBITDA target.

**【CEO Summary Section】**
- **Revenue Performance**: Net sales of $12 million were flat year-over-year, outperforming broader firearm market trends. Gross margin improved to 87.1%, with a 22 basis point increase.
- **Cost Efficiency**: Operating expenses declined by $6.7 million YoY, driven by reduced litigation costs, headcount right-sizing, and streamlined operations. Net income from continuing operations rose to $1.4 million (vs. -$5.8 million prior year), with $2.3 million cash generated.
- **Adjusted EBITDA**: Improved 24% to $4.9 million, reflecting operational progress.
- **Strategic Moves**: Relocated headquarters to Atlanta, reducing costs, and exploring share buybacks with $65.7 million cash on hand.

**【CFO Financial Commentary】**
- **Market Share Growth**: Despite 5% decline in adjusted NIX, firearm sales on gunbroker.com rose 3%, with take rate increasing to 6.34%.
- **GMV Dynamics**: Total GMV of $189 million saw 7.8% growth in used firearms, offsetting a 1.2% decline in overall GMV. Revenue was flat at $11.98 million, up 1.1% QoQ.
- **Expense Management**: Bad debt expense reduced by $400,000, partially offset by a $1.8 million vendor settlement. Operating expenses down 22% YoY.
- **Liquidity**: Ended Q2 with $65.7 million cash, enabling strategic initiatives like share repurchases.

**【Q&A Key Highlights】**
- **Market Share & Strategy**: CEO Steve Irvin emphasized gaining market share despite industry decline, citing improved buyer experience and AI-driven tools for sellers.
- **Used Firearms Trend**: High sell-through rate for used firearms driven by limited supply, with focus on streamlining seller listings via AI and API integrations.
- **Profitability Outlook**: CFO Paul Kazowski highlighted potential to exceed 2026 EBITDA target of $25 million, with cost reductions and revenue growth as key drivers.
- **Litigation Impact**: Ongoing indemnification costs remain a variable expense, but operational efficiency improvements are offsetting these challenges.

Outdoor Holding Company (POWW) Q2 2026 Earnings Call Transcript

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