Outdoor Holding Company reported a challenging start to QQ1 2025 with revenue of $31.0 million, down 9.6% year over year and 23.4% quarter over quarter, reflecting the disciplined but temporary drag from a shifting sales mix and broader firearms market softness. The business is clearly in the midst of a strategic transition: GunBroker (the marketplace) continues to generate the majority of gross profit with high-margin characteristics, while the ammunition division is undergoing a scale-up to rifle-focused production, which temporarily depresses overall profitability as overhead absorption improves and capacity expands. Management articulated a multi-quarter plan to restore gross margins and drive mid-to-late-cycle profitability through take-rate optimization, cross-selling at checkout, and manufacturing process improvements.
Key financial and operational highlights include a 31.6% gross margin for the quarter (versus 40.9% in the prior year period), with the Marketplace segment delivering an especially robust 85.6% gross margin while the Ammunition segment posted a negative 4% gross margin due to mix and ramp inefficiencies. The company reported an adjusted EBITDA of approximately $2.0 million for the quarter, while GAAP EBITDA was negative $4.56 million. The balance sheet remains firmly net cash, with approximately $50.8 million of cash and equivalents and a net debt position of about negative $36.2 million, underscoring liquidity to fund transformation initiatives. Management highlighted up to $15 million in cost-cutting and working-capital opportunities over the next 18–24 months and pointed to strategic milestones including a Gearfire financing rollout in Q2, cross-selling enhancements in the marketplace cart, and accelerated rifle production throughput.
The investment thesis hinges on continued monetization of the GunBroker platform, the successful ramp of rifle ammunition production, and the realization of cost efficiencies that can lift margins and cash generation over time. The lack of formal full-year guidance is offset by clear operational levers and a demonstrated willingness to invest in high-return capabilities, supported by a strong balance sheet. Investors should monitor rifle-production throughput, the sustainability of the higher GunBroker take rate, the pace of cross-sell adoption, and the realization cadence of identified cost-saving opportunities.