“Today, ahead of an upcoming investor conference, we are providing annual guidance. We entered 2026 as a much leaner business with a significantly improved cost structure and greater visibility into our forward trajectory. Despite an anticipated year over year decline in net sales and adjusted EBITDA performance in the first quarter of 2026, due in part to some retail re-timing from late Q1 into early Q2 and marketing investment in new product launches, we are encouraged by early signs of improving demand and retail sell-ins heading into the second quarter. As we anticipate sales rates to stabilize, driven by our new product launches, we expect to deliver meaningful improvements in bottom line profitability for 2026,” said
| In millions | FY25 Actual | FY26 Guidance | |
| $316.8 | |||
| Adjusted EBITDA* | $18.5 | ||
FY26 Guidance Assumes:
- Continued uneven demand environment
- Estimated tariff impacts in light of recent judicial decisions, including receipt of anticipated refunds and rate reductions
- Positive impact from existing and incremental payroll reductions and restructuring discussed on
The Company’s full year 2026 guidance is based on a number of assumptions that are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
* The Company has not provided a quantitative reconciliation of forecasted adjusted EBITDA to forecasted GAAP net income (loss) within this press release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to, equity-based compensation with respect to future grants and forfeitures, which could materially affect the computation of forward-looking GAAP net income, and are inherently uncertain and depend on various factors, some of which are outside of the Company’s control.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our future financial results and financial condition, transformation efforts, product launches and anticipated demand, retail partnerships, anticipated tariffs and tariff refunds, our future ability to continue as a going concern, our liquidity, and the expected benefits of operational improvements and restructuring efforts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “guidance,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These statements are neither promises nor guarantees, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our future ability to continue as a going concern; our ability to realize expected benefits from our strategic plans; our ability to implement any restructuring and cost-reduction efforts; our limited liquidity; our ability to mitigate the impact of new and increased tariffs and similar restrictions on our business; our reliance on third-party manufacturers, which operate mostly outside of the
Availability of Information on Solo Brands’ Website and Social Media Profiles
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Social Media Profiles:
https://linkedin.com/company/solo-brands/
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Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in
Adjusted EBITDA is not a measurement of financial performance under
Adjusted EBITDA excludes certain tax payments that may require a reduction in cash available to us; does not reflect our cash expenditures, or future requirements, for capital expenditures (including capitalized software developmental costs) or contractual commitments; does not reflect changes in, or cash requirements for, our working capital needs; does not reflect the cash requirements necessary to service interest or principal payments on our debt; excludes certain purchase accounting adjustments related to acquisitions; and excludes equity-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy.
In addition, other companies may define and calculate Adjusted EBITDA differently than us, thereby limiting the usefulness of this non-GAAP financial measure as a comparative tool. Because of these and other limitations, you should consider Adjusted EBITDA only as supplemental to other
Adjusted EBITDA
We calculate adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization expenses, restructuring, contract termination and impairment charges, equity-based compensation expense, and other costs that are believed by management to be non-operating in nature and not representative of the Company’s core operating performance, as listed below under “Non-GAAP Adjustments”.
Non-GAAP Adjustments
In addition to the costs specifically noted under the non-GAAP metrics above, the Company believes that evaluation of its financial performance can be enhanced by a supplemental presentation of results that exclude costs believed by management to be non-operating in nature and not representative of the Company’s core operating performance. These costs are excluded in order to enhance consistency and comparability with results in prior periods that do not include such items and to provide a basis for evaluating operating results in future periods.
- Restructuring, contract termination, impairment and related charges - For 2025, represents charges related to impairment of long lived assets, cost saving initiatives, such as the reduction in force, closure of distribution centers, owned retail store lease terminations, impairments and modifications, termination of underperforming licensing arrangements and other contracts, retention payments to key personnel, as well as costs related to the engagement of strategic consulting firms for operational planning, legal entity reorganizations, additional cost saving initiative identification and internal management reporting optimization. Amortization expense - Represents the non-cash amortization of the following:
- intangible assets related to the reorganization transactions in 2020 and the 2021 and 2023 acquisitions and additions to patents in regard to their defense;
- website development costs; and
- capitalized software.
- Depreciation expense - Represents the non-cash depreciation of the following:
- property and equipment; and
- tooling depreciation - tooling used in the manufacturing process that is recognized within cost of goods sold.
- Business optimization and expansion expenses - Includes the loss recognized from the transaction with the former sellers of TerraFlame in 2025 as well as software implementation fees related to the optimization and enhancement of our information technology infrastructure.
- Costs associated with the refinancing amendment - Represents strategic consulting engagement expenses incurred in conjunction with the 2025 Refinancing Amendment, specific to the 2025 Revolving Credit Facility.
- Equity-based compensation expense - Represents the non-cash expense related to the incentive units, restricted stock units, options, performance stock units, special performance stock units, executive performance stock units and employee stock purchases, with vesting occurring over time and settled with the Company’s Class A common stock. Forfeitures are recognized in the period incurred and reflected as a reduction of the non-cash expense previously recognized for awards not yet vested.
- Transaction costs - Represents costs for professional service fees incurred in connection with potential and completed registered securities offerings and merger and acquisition activities.
- Management transition costs - Represents costs primarily related to executive transition costs for executive search fees and related costs for the transition of certain members of management, such as severance costs.
- Inventory fair value write-ups - Represents the recognition of fair market value write-ups of inventory accounted for under ASC 805 related to prior period acquisitions.
- Sales tax audit expense - Represents a one-time sales tax assessment related to prior periods.
- Changes in fair value of contingent earn-out liability - Represents the charge to mark the contingent earn-out consideration to fair value in connection with the prior period acquisitions.
Adjusted EBITDA
The following table reconciles consolidated net income (loss) to adjusted EBITDA for the periods presented:
| Year Ended | |||||
| (dollars in thousands) | 2025 | ||||
| Net income (loss) | $ | (145,437 | ) | ||
| Interest expense | 26,560 | ||||
| Income tax (benefit) expense | 3,422 | ||||
| Depreciation and amortization expense | 28,542 | ||||
| EBITDA | $ | (86,913 | ) | ||
| Restructuring, contract termination, impairment and related charges | 93,495 | ||||
| Business optimization and expansion expense | 5,741 | ||||
| Equity-based compensation expense | 2,087 | ||||
| Changes in fair value of contingent earn-out liability | (787 | ) | |||
| Management transition costs | 190 | ||||
| Transaction costs | 325 | ||||
| Costs associated with the refinancing amendment | 4,341 | ||||
| Inventory fair value write-ups | — | ||||
| Sales tax audit expense | — | ||||
| Adjusted EBITDA | $ | 18,479 | |||
Source: