Synergy CHC Corp. (SNYR, Financial) has broadened its licensing agreement with Gravity Pharma to include Turkey, in addition to the United Arab Emirates (UAE), for the exclusive distribution of its FOCUSfactor products. This strategic expansion earns Synergy a total of $2 million in initial licensing fees, with the potential for further earnings through sales-based royalties in these rapidly growing markets. By leveraging this UAE-Turkey licensing framework, Synergy aims to scale its FOCUSfactor brand—encompassing brain health supplements, cognitive drinks, and energy shots—without affecting its U.S. operations or ownership structure. The company maintains complete control over its global intellectual property, with the royalty model providing long-term financial benefits.
SNYR Key Business Developments
Release Date: May 15, 2025
- Net Revenue: $8.2 million, a 13% decrease year over year.
- Gross Margin: 75.4%, up from 72% in the prior year.
- Operating Expenses: $4.2 million, a 15% decrease from the previous year.
- Income from Operations: $1.9 million, an 8% increase year over year.
- Net Income: $876,000 or $0.10 per diluted share, a 30% increase in earnings per share.
- EBITDA: $1.98 million, up 7% from the previous year.
- Cash and Cash Equivalents: $177.9 thousand as of March 31, 2025.
- Total Liabilities: $31.3 million, a decrease of $1.7 million from December 31, 2024.
- Cash Used in Operating Activities: $823,000 for the first quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Synergy CHC Corp (SNYR, Financial) reported a 30% growth in earnings per share year over year, marking the ninth consecutive quarter of profitability.
- EBITDA margins expanded significantly to 24.1% compared to 19.7% in the prior period, highlighting strong cost management.
- The company has entered into a three-year license agreement for the Focus Factor brand in the United Arab Emirates, expanding its global reach.
- Synergy CHC Corp (SNYR) has incorporated a wholly owned subsidiary in Mexico and is onboarding manufacturing partners and customers, including Costco and Walmart.
- The company received nearly $1 million in purchase orders from Amazon for its RTD products, indicating strong momentum in the second quarter.
Negative Points
- Net revenue for the first quarter of 2025 was $8.2 million, reflecting a 13% decrease year over year due to a one-time sell-in to a customer in 2024.
- Cash and cash equivalents decreased significantly to $177.9 thousand as of March 31, 2025, from $687.9 thousand at the end of 2024.
- The company experienced a decrease in cash used in operating activities, primarily due to an increase in inventory and a decrease in accounts payable and accrued expenses.
- Synergy CHC Corp (SNYR) has a high level of total liabilities at $31.3 million as of March 31, 2025, although this is a decrease from the previous quarter.
- The company faces potential impacts from tariffs on certain ingredients, although it does not expect these to have a material impact on its business.
