Detailed narrative
Q2 FY26 Financial Performance Overview
FitLife Brands reported total revenue of $26.5 million for Q2 FY26, a 65% increase year-over-year, primarily driven by the acquisition of Irwin. Wholesale revenue grew 156% to $14.6 million, representing 55% of total revenue, while online revenue increased 14% to $11.9 million, accounting for 45% of the total. Gross margin declined to 37.0% from 42.8% in Q2 FY25, mainly due to Irwin's historically lower gross margins. Net income was $2.0 million, up from $1.7 million, and Adjusted EBITDA increased 10% to $3.7 million. The company also noted sequential improvements, with total revenue up 4.8% from Q1 FY26, and diluted EPS increasing for three consecutive quarters.
Legacy FitLife Business Challenges and Sequential Stability
Legacy FitLife's total revenue for Q2 FY26 was $12.4 million, a 23% year-over-year decrease. This decline was attributed to a 31% year-over-year decrease in wholesale revenue, primarily from reduced sales to GNC, and a 19% year-over-year decrease in online revenue, mainly from MRC. Despite the significant annual declines, Legacy FitLife showed sequential stability, with total revenue declining less than 0.5% from Q1 FY26. Legacy FitLife's gross margin also increased sequentially for the third consecutive quarter, reaching 41.7% in Q2 FY26.
Irwin Integration and Amazon Growth
Irwin contributed $14.1 million in revenue during Q2 FY26, with 76% from wholesale customers ($10.7 million) and 24% from online sales. Irwin's gross margin was 32.8%, and contribution as a percentage of revenue was 29.2%. The company successfully scaled Irwin's Amazon presence, with monthly revenue growing from approximately $0.5 million in December 2025 to just under $1 million in June 2026, exceeding initial expectations. This growth was supported by Prime Day in June, and sales remained strong in July.
Supply Chain and New Product Development Initiatives
FitLife is actively improving Irwin's supply chain, particularly by transitioning products to 3-year dating to reduce inventory obsolescence. As of the call, 85% of Irwin's formulas are approved for 3-year dating, with 12% of inventory on hand and 22% on order. Lost revenue due to out-of-stocks declined over 50% sequentially. In new product development, while 3 new products launching in late Q3/early Q4 are in declining categories, the company aims to launch at least 4 new products quarterly from 2027 in growing nutritional supplement categories.
Marketing Strategy and SG&A Efficiency
The company increased advertising and marketing expense by 16.4% sequentially in Q2 FY26, with a higher percentage directed to off-Amazon spend to drive broader awareness. Early metrics, such as increased average weekly sessions on Amazon for their brand portfolio, are encouraging. FitLife also focused on operating more efficiently, reducing SG&A by 3.8% sequentially to $4.8 million, an annualized improvement of approximately $0.8 million. Further SG&A reductions are planned for the remainder of the year.
Debt Reduction and Amazon Subscriber Trends
FitLife made a scheduled amortization payment of $1.5 million on its term loan, bringing the balance to $36.1 million, and paid down an additional $2.2 million on its revolving line of credit, reducing it to $2.0 million. Since the Irwin acquisition, the company has reduced indebtedness by $8.6 million, resulting in approximately $0.6 million in annual interest expense savings. On Amazon, total active subscriber counts across all brands bottomed at just over 90,000 in mid-April and have since grown to approximately 94,000, reversing a previous decline.