PSQ Holdings Inc

Ladies and gentlemen, thank you for joining us and welcome to PSQ Holdings second quarter 2026 financial results conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to William Kent, head of corporate affairs. William, please go ahead.

Good morning and thank you, Holly. Welcome to the PSQ Holdings second quarter 2026 earnings call. Joining me today are Dustin Wunderlich, our chairman and chief executive. Also joining us are Mike Pena, our chief financial officer, and Crystal Wenzel, our chief accounting officer. Before we begin, please note that information that we discussed today, including our outlook, is current as of today and includes forward-looking statements that involve risks and uncertainties. We are not required to update these statements if new information arises. For details on factors that could cause actual results to differ, please see today's earnings release and our SEC filings, including our 2025 Form 10-K. We may also present non-GAAP measures alongside financial measures calculated according to GAAP. Before I hand the call over to Dusty, if you'd like to submit a question for management to answer during the Q&A portion of today's call, please email investment at publicsq.com. Once again, that's investment at publicsq.com. I will now hand the call over to Dusty.

Thanks, Will, and good morning. I took over this company six months ago. I'm going to share with you exactly what has happened since, exactly what we're telling you we believe happens next, and then I'm going to let you draw your own conclusions. First, let's start with the six months in the rearview mirror because numbers are not subtle. We more than doubled revenue, up 108% year-over-year in the second quarter, up 136% for the first half. And we did it while taking costs out, not adding them. Normalizing for a one-time stock comp reduction in last year's quarter, operating expenses were down about 12%. Headcount is down by roughly half. Operating cash burn in the quarter was cut 52%. Revenue per employee went from about 48,000 to about 198,000, up more than 300%. Non-GAAP operating income went from a $2.7 million loss a year ago to positive $400,000. I want to be blunt about what that combination means because it's rare. Most companies grow by spending more. We grew while spending less. We took a business built on addition. Too many brands, too much scope, too much headcount, too much story. And we cut it down to the parts that actually move money and make margin. Growing your top line over 100% while you take costs out is not a normal result. It's a result we sought with focus and intentionality. Yesterday, We announced that we entered into a definitive agreement to sell Every Life to Freehold Brands for $5.5 million in cash, with the transaction expected to close by the end of September. Three things about the sale. First, we told you we would divest what wasn't core, and we did it on a timeline we laid out. That's the pattern I want you to get used to. We do what we say. Second, this wasn't a reaction to anything. We moved Every Life into Discontinued Operations three quarters ago. This is the planned execution of a strategy we started back then, not a decision made under pressure. Third, we ran a deliberate process. In our view, we maximized the value of this asset. The proceeds come in as cash and go straight to a stronger balance sheet, and every piece of this sharpens the team's focus on the core even further. Here's where I'll be disciplined, and I want you to notice that I am. We're a company growing at 100%, cutting costs, and bringing in cash. I'm well aware of where the stock trades against that. I told you in February I'm not a market commentator, and I'm not going to become one today. I'll give you the facts. Pricing them is your job. My job is to say what we'll do, do what we say, and ensure our results keep getting better. And they are. On the balance sheet, we ended the quarter with $11.8 million of restricted cash and Cash Equivalence. But the number I want you to actually look at is operating cash burn. 2.3 million in the quarter, down 52% from a year ago. We're spending about half of what we used to to run a bigger business. Every life cash, our lower burn and the revenue trajectory I just walked you through are how we fund ourselves from here. Before I move on to guidance, I want to share a few KPIs that further demonstrate the direction the business is headed and the real results of the efforts our team has put in over the last six months. These numbers are critical because they show whether this is real. Payments. We moved 172.5 million of volume through the platform this quarter, against 68.2 million a year ago. That's up 153%. For the first half, $374.3 million against $104.2 million, up 259%. Payments revenue was $3 million in the quarter against $1 million last year, and $6.6 million for the half against $1.6 million. Credit. Credotova did $14.1 million of GMV in the quarter against $10.7 million, up 32%. Same 32% for the first half, $29.2 million against $22.1 million. Credit revenue was $4.1 million in the quarter against $2.4 million and $8.7 million for the first half against $4.9 million. And I want to be clear about the backdrop. The firearms market has begun to stabilize and show signs of improvement. That 32% is conversion, approval rates, attracting new borrowers, and reengaging borrowers we already have. It's not a market tailwind. Credit quality remains strong. Losses and delinquencies are inside our expectations. Now, the numbers some of you are going to circle. Both TMV lines are down modestly for the first quarter. Payments was $186.2 million in Q1. Credit was $15.1 million. So let me get in front of it rather than wait for the question. Two reasons, and we told you both of them in May. First, credit is seasonal. Demand moderates after the first quarter every year. Mike said that on his call three months ago. Second, on payments, Q1 carried the full period step up from agreements we signed in the back half of last year. We're now lapping that from a much higher base. Neither of those is a change in the business. What I point you to instead is the year over year comparison because that's the honest one, 153% and 32%. On the revolver, the facility that funds Cordova's consumer originations, we had 7.3 million drawn on the 10 million line as of June 30th. We draw on funds to finance loans and leases and we pay them back as those receivables are collected or sold. That's the mechanic and it hasn't changed. Now, guidance. and I'm going to be pointed because this is the part that matters. Companies in our position usually go quiet, they hedge, they hand you a range wide enough to drive a truck through so they never have to be wrong. We're doing the opposite. We are affirming full year 2026 revenue of about 32 million. We expect positive non-GAAP operating income for the full year and we're driving towards positive operating cash flow in 2027. I'm not giving you these numbers because I have to. Nobody makes a company at our stage put specific targets in public. I'm giving them to you because I'm confident enough in what we've built to say them out loud with my name attached. To write them down, hold me to them. That's the entire point of being on this call. I know none of this earns your trust by itself. Trust doesn't get earned in one call, one quarter, or one good print. It gets earned by doing this again and again and again until the pattern is impossible to argue with. I'm not asking you to believe me. I'm asking you to watch what we do against what I just told you we do. That's the deal. It's the only deal I'm interested in. We have nothing back until it earns its way in. We protect what's real, we move money, and we compound. Thank you. I'll now turn the call over for questions.