Synergy Chc (SNYR -2.72%), a health and wellness products company known for its brain health and nutritional supplement brands, released its second quarter 2025 results on August 14, 2025. The most notable headline was an 86% rise in earnings per share (GAAP) to $0.17, well above analyst expectations of $0.08 (GAAP). However, revenue (GAAP) was just $8.13 million, falling 25.0% short of forecasts (GAAP revenue) and rising only slightly from the prior year. Net income (GAAP) more than doubled compared to the same period in 2024, while record gross margins and significant licensing revenue contributed to profits. Despite continued profitability, the quarter revealed execution risks in scaling distribution and highlighted reliance on one-off-like license income. Overall, the period marked a tenth consecutive quarter of profitability but with underlying sales concerns.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.17 | $0.08 | $0.09 | 86.4% |
| Revenue (GAAP) | $8.13 million | $10.8 million | $8.02 million | 1.4% |
| Gross Margin | 76.7% | 69.5% | 7.2 pp | |
| Income from Operations | $1.62 million | $1.58 million | 2.5% | |
| Net Income | $1.47 million | $0.66 million | 123% | |
| EBITDA (Non-GAAP) | $3.80 million | $1.61 million | 136.0% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Synergy Chc markets and distributes brain health and wellness supplements in the U.S. and internationally. Its main products include FOCUSfactor, a supplement used to support memory and concentration, and Flat Tummy, a nutritional solution brand for women’s wellness. These products target segments with robust growth, such as the brain health supplements market and global weight management programs.
In recent periods, the company has focused on expanding its retail footprint, launching branded beverages, and negotiating international licensing deals. Its growth strategy relies on increasing product availability in both mass-market and regional retailers, as well as leveraging licensing for additional revenue streams. Effective marketing and innovation remain key factors for its success.
Quarter Highlights and Financial Details
The most striking metric for the quarter was EPS. The figure of $0.17 (GAAP EPS) exceeded analyst consensus by over 100%. This jump was supported by significant net income growth, with GAAP profits more than doubling year over year. Revenue (GAAP) grew 1%, with $8.13 million (GAAP) compared to $8.02 million (GAAP) in Q2 2024 -- and about $2.7 million below consensus expectations for GAAP revenue. This shortfall stemmed from declining core product sales, offset only by the addition of $1.4 million in new licensing income.
Gross margin (GAAP) was 76.7%. This improvement reflected the high profitability of licensing arrangements, as opposed to lower-margin product sales. According to management, “The increase was largely driven by license revenue.” The inclusion of licensing income in quarterly results has proven lucrative.
Synergy also made headway in financial management. The company entered into a $20 million term loan credit agreement, of which $17.5 million has been drawn, which extended the timeline for major debt repayments and reduced short-term risk. Total liabilities were $32.1 million as of June 30, 2025, with most of the debt now reclassified as long-term obligations. Working capital swung from a deficit at the end of FY2024 to a $12.4 million surplus, reflecting stronger liquidity. Despite these moves, operating cash flow stayed negative -- cash used for operations improved versus the prior year for the first six months.
The company’s distribution expansion efforts yielded new retail partnerships for the FOCUSfactor supplement and beverage brands in North America. It expects these arrangements to generate results in later quarters, especially Q4 2025. Licensing agreements with Gravity Pharma further extended the company’s geographic reach to Turkey (adding to the United Arab Emirates), generating the licensing revenue boost. Despite this progress, core product volumes fell, indicating that new distribution points have not yet translated into baseline sales growth.
Operating expenses rose 16% year-over-year, tied mainly to higher costs associated with being a public company. Management cited “continued momentum” in marketing efforts, but the reported decline in regular product sales suggested that further gains from brand promotions and expanded points of sale are needed to fully drive revenue higher in subsequent quarters.
Innovation remained at the forefront, with launches of focus and energy beverages and planned extensions in the FOCUSfactor brand. The company has called attention to the clinical testing underpinning FOCUSfactor supplements, hoping to differentiate from competing products as the industry remains fragmented and highly competitive. No granular sales results for new launches appeared in this quarter.
Looking Ahead: Guidance and Key Watch Items
Synergy Chc’s management struck an optimistic tone, stating that “Synergy recently announced a series of major North American retail and distribution wins across its FOCUSfactor supplement and beverage lines, significantly expanding availability across mass, grocery, pharmacy, convenience and wholesale channels, which should start yielding significant results in the fourth quarter of 2025.” No formal numerical guidance was issued for the next quarter or for fiscal 2025 as a whole. The company is counting on its expanded retail network and international licensing to boost top-line performance and improve cash generation later this year.
With sustained profitability, improved gross margin, and reduced short-term debt risk, the coming quarters will put an even greater spotlight on core sales momentum. Investors will be tracking whether new retail launches and stronger brand messaging can offset the previous period’s weakness in product sales.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
