Starco Brands Reports 24% Revenue Decline in Q2 2025, Achieves Reduced Net Loss

Starco Brands, Inc. reported a significant decline in financial performance for the second quarter of 2025, with revenues totaling $10.6 million, a decrease of 24% from $14.0 million in the same period last year. The company attributed this decline primarily to reduced product sales from its subsidiary, Soylent, which faced inventory constraints that limited order fulfillment. Related party revenues also fell sharply, down 55% to $421,379, reflecting lower royalty income during the quarter. Despite the revenue drop, the company achieved a gross profit of $4.4 million, although this was also down from $5.7 million year-over-year.

In terms of operational efficiency, Starco Brands managed to reduce its total operating expenses significantly, from $16.8 million in Q2 2024 to $5.8 million in Q2 2025. This reduction was driven by lower compensation expenses, professional fees, and marketing costs, as the company implemented cost-cutting measures. Notably, the absence of a fair value share adjustment, which had resulted in a loss of $8.7 million in the previous year, contributed to a net loss of $1.9 million for the quarter, a substantial improvement compared to the $11.6 million loss reported in Q2 2024.

Starco Brands has also been active in strategic developments, including the completion of several acquisitions in recent years, such as Soylent Nutrition, AOS Group, and Skylar Body. These acquisitions are part of the company's strategy to expand its product offerings and market presence. As of June 30, 2025, the company had 29 full-time employees and continued to leverage its relationship with The Starco Group for manufacturing capabilities.

The company reported an accumulated deficit of $81.4 million and a working capital deficit of approximately $6.3 million as of June 30, 2025. To address its financial challenges, management is pursuing alternative financing sources to enhance liquidity and support repayment of existing debts. Additionally, Starco Brands entered into a forbearance agreement with its lender, allowing it to defer certain obligations through September 2025, contingent on meeting specific financial thresholds.

Looking ahead, Starco Brands aims to increase revenue through strategic initiatives focused on profitable sales channels and operational efficiencies. The company plans to continue launching new products across various consumer segments, including food, personal care, and beverages, while managing costs to improve overall financial health.