S&W Seed Company Reports 38.5% Revenue Decline in Q2 Fiscal 2025

S&W Seed Company reported a significant decline in financial performance for the second quarter of fiscal 2025, with total revenue of $5.1 million, down 38.5% from $8.3 million in the same period last year. The company attributed this decrease to lower sales of its Double Team grain sorghum and non-dormant alfalfa, impacted by market conditions and timing of shipments. Gross profit also fell sharply to $1.9 million, representing a gross margin of 37.1%, compared to 42.8% in the prior year, primarily due to reduced sales of high-margin products.

The company's operating expenses increased to $6.2 million, up 8.5% from $5.7 million a year earlier, driven by higher selling, general, and administrative costs, which rose by 10.5% to $4.7 million. Research and development expenses also increased by 15.1% to $0.8 million. As a result, S&W Seed recorded a loss from operations of $4.3 million, compared to a loss of $2.2 million in the previous year. The net loss attributable to S&W Seed Company was $1.7 million, a notable improvement from a loss of $6.5 million in the prior year, largely due to a gain from discontinued operations related to the sale of its Australian subsidiary.

In terms of strategic developments, S&W Seed completed the deconsolidation of its Australian subsidiary, S&W Australia, which had entered voluntary administration in July 2024. The sale of S&W Australia was finalized on November 22, 2024, resulting in a gain of $4.6 million recognized in the current quarter. This strategic shift has allowed the company to focus on its core operations in the Americas and International segments, which now account for 100% and 0% of total revenue, respectively, for the quarter.

Operationally, S&W Seed's customer base and product adoption rates have been affected by geopolitical and macroeconomic factors, including trade restrictions and inflation. The company reported a decrease in sales to international markets, which represented only 5% of revenue in the current quarter, down from 36% in the same period last year. The company is actively exploring strategic alternatives to enhance shareholder value, including potential mergers or recapitalization efforts.

Looking ahead, S&W Seed plans to launch a new business model focused on licensing its products to private label customers, which is expected to provide more flexibility and control over costs. The company remains committed to improving its financial performance and operational efficiency, despite the challenges posed by market conditions. The outlook for the remainder of fiscal 2025 will depend on the successful execution of these strategies and the ability to navigate ongoing economic uncertainties.