Solésence Inc. (SLSN) posted a 25% decline in second-quarter revenue to $15.3 million, reflecting weaker demand compared with the prior year’s $20.4 million, which had been bolstered by a major product launch. The company’s net income swung to a loss of $158,000 from a $3.2 million profit in Q2 2025, while adjusted EBITDA fell 86% to $523,000.
Gross margin remained stable at 31%, down slightly from 32% a year earlier. Management attributed the revenue decline to softer market conditions, though order backlog rose to $64.9 million as of August 17, up from $60 million in the prior-year period. One-time impacts included a $938,000 negative effect from Refy-related events and the absence of a $1.4 million Employee Retention Credit benefit recorded in Q2 2025.
The company also disclosed an accounting issue tied to its historical inventory costing methodology, which misallocated indirect manufacturing costs. Management emphasized the issue does not affect cash flow, operations, or service to brand partners, and outlined remediation steps including enhanced controls and periodic reviews of cost allocation methods.
Solésence’s market capitalization stood at $51.58 million, with an EV/EBITDA multiple of 49.06 and a current ratio of 2.08. The stock rose 6.15% to $0.94 during regular trading but fell 10.39% in after-hours activity to $0.84, within its 52-week range of $0.61 to $4.55.
Looking ahead, management expects full-year 2026 revenue to exceed 2025 levels, supported by stronger order visibility. The second half of the year is projected to generate approximately $35 million in revenue, described as the strongest performance in the company’s history, with sequential improvement anticipated in both revenue and profitability for Q3 2026.
Solésence launched two scalp care product lines in July, targeting a $3 billion addressable market within the broader $50 billion hair care industry. The company also highlighted FDA approval of BEMT and plans to introduce combination products leveraging BEMT alongside its mineral and booster technologies.
CEO Kevin Cureton emphasized operational integrity and financial reporting standards, stating the accounting matter does not alter the company’s commercial trajectory. CFO Laura Riffner noted ongoing efficiency gains, including improvements in labor efficiency and Overall Equipment Effectiveness through initiatives like Kaizen events.
