Eightco announces Full-Year 2023 Financial Results

Rhea-AI Summary

Eightco Holdings Inc. (NASDAQ: OCTO) reports impressive 2023 financial results with revenues of $75.3 million, up 137% year-over-year, driven by cell phone sales. SG&A expenses decreased by 45%. The Company focuses on improving cost structures and profitable growth.

Positive

• Revenue growth of 137% year-over-year to $75.3 million
• SG&A expenses down 45%
• Successful repayment of dilutive debt security and repurchase of warrants for cleaner capital structure

Negative

• None.

Insights

Financial Analyst

The reported increase in annual revenue for Eightco Holdings Inc., particularly in the cell phone segment, is a positive indicator of the company's growth trajectory. A 137% year-over-year surge significantly surpasses the industry average for consumer electronics, which generally sees more modest growth. This could suggest that Eightco has effectively capitalized on market opportunities or possibly introduced competitive products or pricing strategies that resonate with consumers.

However, the reported operating loss, despite a reduction in SG&A expenses, raises concerns about the company's profitability. While the decline in operating expenses is commendable, the fact that the company still operates at a loss indicates that there may be underlying inefficiencies or market pressures affecting margins. The repurchase of warrants and repayment of debt, as mentioned by the CEO, could be a strategic move to optimize the capital structure, which may be viewed favorably by investors concerned with equity dilution and financial stability.

Market Research Analyst

The impressive revenue growth in Eightco's cell phone business could be reflective of a successful pivot or innovation within their product line. It's essential to understand the drivers behind this growth, such as market share gains, entry into new markets, or the successful launch of new products. Analyzing consumer trends and competitor performance would provide further context to Eightco's success.

Additionally, the reduction in SG&A expenses, excluding depreciation and amortization, by 45% suggests a strategic re-alignment of the company's resources, possibly away from non-core activities. This leaner cost structure could be a response to previous inefficiencies or a proactive adjustment to focus on more profitable segments. Such strategic shifts are noteworthy for stakeholders as they may indicate the company's agility in responding to market conditions.

Economist

The financial outcomes for Eightco Holdings Inc. must be contextualized within the broader economic environment. A substantial revenue increase in a single fiscal year could be influenced by macroeconomic factors such as consumer spending trends, currency fluctuations, or trade policies impacting the cell phone industry. The company's performance relative to the overall economy can provide insights into its resilience or sensitivity to economic cycles.

Moreover, the strategic decision to improve the capital structure by addressing debt and warrants may have been influenced by the prevailing interest rate environment or by a forecasted shift in economic conditions. Such financial maneuvering is critical for maintaining corporate solvency and for positioning the company to take advantage of potential economic upswings or to weather downturns.

• 2023 revenues of $75.3 million up 137% year-over-year from $31.8 million, driven by cell phone sales, beating guidance of $73.0 million
• 2023 SG&A excluding Depreciation & Amortization of $5.2 million, down 45% as a result of elimination of costs related to historical business efforts

Easton, PA, April 02, 2024 (GLOBE NEWSWIRE) -- Eightco Holdings Inc. (NASDAQ: OCTO) (the “Company” or “Eightco”), who’s subsidiaries provide inventory capital for e-commerce sellers as well as manufacturing solutions for product and packaging needs, today announced financial results for the fiscal year ended December 31, 2023.

Paul Vassilakos, CEO of Eightco and President of Forever 8 Fund, LLC (“Forever 8”), the Company’s largest subsidiary, said “Our full-year consolidated revenue improvement was driven by revenue growth in our cell phone business. We continue to improve all aspects of our cost structure and focus on our highest growth priorities to deliver long-term, profitable growth. Further, in the first quarter of 2024, the Company announced the repayment of a highly dilutive debt security and cancelled and repurchased a significant amount of warrants, delivering a cleaner capital structure that will help support our growth going forward.”

2023 financial highlights

Results compare the 2023 fiscal year end (December 31, 2023) to the 2022 fiscal year end (December 31, 2022), unless otherwise indicated.

Revenues, net		$	75,297,484			$	31,820,779
Cost of revenues			66,805,023				29,626,869
Gross profit			8,492,461				2,193,910
Operating expenses:
Selling, general and administrative expenses		$	15,835,651			$	16,401,414
Restructuring and severance			2,133,982				1,300,000
Total operating expenses			17,969,633				17,701,414
Operating loss			(9,477,172	)			(15,507,504	)

About Eightco

Eightco (NASDAQ: OCTO) is committed to growth of its subsidiaries, made up of Forever 8, an inventory capital and management platform for e-commerce sellers, and Ferguson Containers, Inc., a provider of complete manufacturing and logistical solutions for product and packaging needs, through strategic management and investment. In addition, the Company is actively seeking new opportunities to add to its portfolio of technology solutions focused on the e-commerce ecosystem through strategic acquisitions. Through a combination of innovative strategies and focused execution, Eightco aims to create significant value and growth for its portfolio companies and stockholders.

For additional information, please visit www.8co.holdings

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact could be deemed forward looking. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “expand,” “advance,” “develop” “believes,” “guidance,” “target,” “may,” “remain,” “project,” “outlook,” “intend,” “estimate,” “could,” “should,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: Eightco’s ability to regain and maintain compliance with the Nasdaq’s continued listing requirements; unexpected costs, charges or expenses that reduce Eightco’s capital resources; Eightco’s inability to raise adequate capital to fund its business; Eightco’s inability to innovate and attract users for Eightco’s products; future legislation and rulemaking negatively impacting digital assets; and shifting public and governmental positions on digital asset mining activity. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Eightco’s actual results to differ from those contained in forward-looking statements, see Eightco’s filings with the Securities and Exchange Commission (the “SEC”), including in its Annual Report on Form 10-K filed with the SEC on April 1, 2024. All information in this press release is as of the date of the release, and Eightco undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

For further information, please contact:

Investor Relations
investors@8co.holdings

FAQ

What were Eightco Holdings Inc.'s 2023 revenues?

Eightco Holdings Inc. reported revenues of $75.3 million for 2023, up 137% year-over-year.

What drove the revenue growth for Eightco Holdings Inc. in 2023?

The revenue growth was driven by cell phone sales.

How much did the SG&A expenses decrease by in 2023 for Eightco Holdings Inc.?

SG&A expenses decreased by 45% in 2023.

What did Eightco Holdings Inc. focus on to deliver long-term, profitable growth?

The Company focused on improving all aspects of its cost structure and highest growth priorities.

What significant financial actions did Eightco Holdings Inc. take in the first quarter of 2024?

In the first quarter of 2024, the Company announced the repayment of a highly dilutive debt security and cancelled and repurchased a significant amount of warrants for a cleaner capital structure.