Starco Brands, Inc. (the “Company” or “Starco Brands”) (OTCQB: STCB), today reported financial results for the fourth quarter and full year ended December 31, 2025.
Management Comments
Starco Brands Chairman & CEO Ross Sklar said, “2025 was a year of margin growth, portfolio distribution alignment and expansion driven by innovation. We said we would optimize the portfolio, reduce costs, improve profitability, and launch innovation and we did all four. The difference maker was new product innovation driving revenue and consumer adoption. Our full year Adjusted EBITDA improved 135%, or $1.8 million year-over-year, driven by disciplined execution of our portfolio, channel priority and R&D coming to life expanding our offering, consumer engagement and ecom distribution.”
Mr. Sklar continued, “At the brand level, our results speak for themselves. Skylar delivered above adjusted EBITDA projections and continues to demonstrate leadership in this competitive and high-margin beauty category. Soylent’s intentional pivot to focus on ecom and direct-to-consumer channels is generating significantly more profit with dependable repeat-purchase revenue that sets up 2026 and 2027 for growth through line extension and innovation commercialization. Winona launched new products and continued its distribution expansion, and Whipshots continues to occupy a unique, defensible position in the alcohol category. With the expected close of The Starco Group merger in 2026, we will have the manufacturing capability, branded portfolio, and financial structure to pursue both organic growth and strategic acquisitions that can benefit from our integrated model. We are focused on completing this transaction in 2026.”
Fourth Quarter of 2025 Financial Results
Reported net revenue for the fourth quarter of 2025 was $7.0 million, compared to $12.1 million in the fourth quarter of 2024. Gross profit was $1.9 million for the fourth quarter of 2025, compared to $1.8 million in the fourth quarter of 2024. The year-over-year revenue decline was due to intentional portfolio optimization, where the Company exited retail distribution of its Soylent division to focus on the far more durable and profitable e-commerce business. The Company is prioritizing profitability, dependable repeat purchase behavior and an over 3 year LTV, by focusing resources on its higher margin direct-to-consumer and e-commerce channels.
Marketing, General and Administrative expenses decreased to $3.5 million in the fourth quarter of 2025, compared to $4.8 million in the fourth quarter of 2024. Compensation expense decreased to $1.7 million in the fourth quarter of 2025, compared to $1.8 million in the fourth quarter of 2024. Professional fees decreased to $0.5 million in the fourth quarter of 2025, compared to $0.8 million in the fourth quarter of 2024. The year-over-year reduction in operating expenses reflects continued operational improvements.
Reported unadjusted net loss for the fourth quarter of 2025 was $19.4 million, compared to a net profit of $4.8 million in the fourth quarter of 2024. The loss in 2025 was largely due to year-end adjustments, including Goodwill impairment of $1.1 million, Intangibles impairment of $14 million and out of period Balance Sheet reconciliations. Contributing to net profit in the fourth quarter of 2024 were non-cash items such as a $26.2 million gain for fair value share adjustment and a $14.3 million expense for goodwill impairment.
Full Year of 2025 Financial Results
Reported net revenue for the full year of 2025 was $40.5 million, compared to $58.7 million for the full year of 2024. The year-over-year decline was due to intentional and continued strategic exit out of the historically suboptimal margined retail channel for Soylent to focus attention and resources on the Company’s significantly higher margin and durable direct-to-consumer and e-commerce channels The retail channel also required an over build that strained resources and caused go forward inventory constraints which limited capacity to fulfill e-commerce customer orders, an issue that is largely solved for 2026. Gross profit was $15.7 million for the full year of 2025, compared to $20.9 million for the full year of 2024.
Marketing, General and Administrative expenses for the full year of 2025 decreased to $13.2 million, compared to $18.9 million for the full year of 2024. Compensation expense for the full year of 2025 decreased to $7.2 million, compared to $9.0 million for the full year of 2024. Professional fees decreased to $2.7 million for the full year of 2025, compared to $3.5 million for the full year of 2024. Total operating expenses decreased to $20.5 million for the full year of 2025, compared to $35.3 million for the full year of 2024. The decrease in operating expenses reflects headcount adjustments, lower consulting and contractor services, lower royalty costs and the elimination of several vendor services. For the full year of 2025 the Company incurred a fair value share adjustment gain of $3.7 million, compared to a fair value share adjustment gain of $10.5 million for the full year of 2024. For the full year 2025 the Company incurred a goodwill impairment loss of $1.1 million, compared to a goodwill impairment of $14.3 million for the full year of 2024.
Reported unadjusted net loss for the full year of 2025 was $20.7 million, as compared to net loss of $17.3 million for the full year of 2024. The year-over-year increase was primarily driven by an increase in intangibles impairment of $14 million and a reduction in goodwill impairment and decreases in compensation expense and marketing, general and administrative expenses.
Non-GAAP Adjusted EBITDA
Adjusted EBITDA, which is net loss adjusted for stock-based compensation, gain on disposal of property and equipment, one-time expenses that the Company reasonable believes will not gain on settlements, interest and other expense, net, depreciation of property and equipment, amortization of intangible assets, (recovery) provision for doubtful accounts, and provision for income taxes and certain other items that impact the periods presented. Adjusted EBITDA is provided so that investors have the same financial data that management uses to assess the Company’s operating results with the belief that it will assist the investment community in properly assessing the ongoing performance of the Company for the periods being reported and future periods. The presentation of this additional information is not meant to be considered a substitute for measures prepared in accordance with U.S. GAAP. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and is defined differently by different companies, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. For reconciliation of GAAP Net Income (loss) to Adjusted EBITDA, see our reports we file from time-to-time with the SEC, which are available to read at www.sec.gov.
Adjusted EBITDA was approximately $3.1 million for the full year of 2025, compared to $1.3 million for the full year of 2024.
Adjusted EBITDA is a non-GAAP financial measure. See the supplementary schedules in this press release for a reconciliation thereof to the most directly comparable GAAP measure.
Balance Sheet
As of December 31, 2025, the Company had approximately $1.8 million in cash, and approximately $4.5 million in inventory on its balance sheet compared to $1.2 million in cash, and approximately $8.2 million in inventory on its balance sheet as of December 31, 2024.
Full Year of 2025 Segment Review
Starco Brands: Starco Brands’ segment includes the portfolio companies AOS, Whipshots and Winona Pure, as well as corporate holding company expenses, inclusive of public company costs and general unallocated corporate overhead. The portfolio companies’ gross revenues of $7.9 million for the full year of 2025, compared to $12.2 million for the full year of 2024. The portfolio companies’ gross profit of $3.9 million for the full year of 2025, compared to $6.8 million for the full year of 2024 mostly attributable to a soft spirits market. With corporate holding company expenses included, the full segment Adjusted EBITDA was a loss of approximately $2.1 million for the full year of 2025.
Skylar: Segment gross revenues of $10.9 million for the full year of 2025, compared to $10.5 million for the full year of 2024. Segment gross profit of $6.2 million for the full year of 2025, compared to $6.2 million for the full year of 2024. Adjusted EBITDA was $2.8 million for the full year of 2025 compared to $1.8 million for the full year of 2024.
Soylent: Segment gross revenues of $21.7 million for the full year of 2025, compared to $36.1 million for the full year of 2024. Segment gross profit of $5.6 million for the full year of 2025, compared to $7.8 million for the full year of 2024. Adjusted EBITDA was $2.4 million for the full year of 2025 compared to $360k for the full year of 2024.
Forward-Looking Statements
Any statements in this press release about the STCB’s future expectations, plans and prospects, including statements about our proposed transaction, future operations, future financial position and results, market growth, new product launches and product growth, total revenue, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The transaction may not actually close and STCB may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on the such forward-looking statements. All forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. STCB undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this document are qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release represent STCB’s views as of the date hereof. STCB anticipates that subsequent events and developments may cause STCB’s views to change.
About Starco Brands
Starco Brands (OTCQB: STCB) invents consumer products with behavior-changing technologies that spark excitement in the everyday. Today, its disruptive brands include Whipshots®, the world’s only vodka-infused whipped cream; Art of Sport, the body care brand designed for athletes and co-founded by Kobe Bryant; Winona®, the first indulgent theater-popcorn spray powered by air; Skylar, the only fragrance that is both hypoallergenic and safe for sensitive skin; and Soylent, the complete non-dairy nutrition brand. A modern-day invention factory to its core, Starco Brands identifies whitespaces across consumer product categories. Starco Brands publicly trades on the OTCQB stock exchange. Visit starcobrands.com for more information.
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