Branchout Food (NASDAQ: BOF) delivered its highest-ever quarterly net revenue of $4.45 million in the second quarter of 2026, marking a significant operational inflection point for the dried fruit manufacturer. The top-line growth was fueled by strong customer execution across multiple channels, including a successful conversion of a one-time product rotation into a recurring everyday order with Sam's Club.

However, the revenue expansion came at the cost of profitability, with gross margins compressing to just 2% for the quarter. Management attributed this margin pressure to strategic investments in customer acquisition, including air-shipping products to meet tight deadlines and sourcing organic strawberries during the off-season at approximately double the normal cost. These factors were necessary to secure long-term recurring business with key partners like Sam's Club and MicroDried.

Production Ramp-Up and Utilization

The company is actively scaling its manufacturing operations to meet surging demand. Historically operating at 35-45 metric tons per month with plant utilization around 40-45%, Branchout Food is ramping production to 70,000 kg monthly. This increase is driven by booked business, including the new Sam's Club order, expanded industrial ingredient contracts, and new listings at Costco and Target.

Management indicated that reaching this utilization level is critical for unlocking profitability. At current output levels, fixed overheads are spread thinly; however, models suggest that hitting the 70,000 kg threshold will allow the company to move beyond breakeven. The company expects no additional hiring to meet this volume, implying improved operational efficiency per unit.

Financial Position and Working Capital

On the balance sheet, Branchout Food reported $8.1 million in current assets against $7.57 million in current liabilities. Cash on hand stood at $200,000, but management emphasized that working capital is tightly managed through a just-in-time manufacturing model. Inventory turnover remains rapid, with stock turning in less than 90 days, though product transit times of 60 days mean cash is frequently tied up in inventory and accounts receivable.

The company holds a $3 million convertible note from Kauffman Capital, an 8% instrument that serves as a bridge to a future revolving credit facility. Management described the balance sheet as healthy, noting that accounts receivable are backed by strong creditworthy clients such as Costco, Walmart, and Sam's Club.

What the Numbers Show

A significant divergence exists between the company's top-line momentum and its bottom-line realization. While revenue hit a record $4.45 million, the 2% gross margin reveals that the current growth phase is heavily subsidized by operational inefficiencies and strategic pricing. Specifically, the industrial ingredient business (33% of revenue) posted only a 3% gross margin due to off-season strawberry costs, while Sam's Club (31% of revenue) yielded 14% margins after air-freight expenses. In contrast, Costco (20% of revenue) maintained a healthy 43% gross margin. This mix highlights that profitability is currently suppressed by channel-specific logistics and timing issues rather than structural product weakness.

Forward Guidance and Outlook

Management provided optimistic guidance for the remainder of FY26, projecting fourth-quarter revenue between $6 million and $7 million. Full-year revenue guidance has been raised to $18-20 million, up from previous expectations. The company aims to sustain this higher run rate into 2027, supported by a baseline of approximately $8 million in annual recurring business from Sam's Club alone.

Key drivers for future growth include:

• Expansion of the Sam's Club partnership, potentially doubling door count by mid-next year.
• Growth in the industrial ingredient channel, which is expected to reach nearly $7 million this year and exceed $10 million next year.
• New product launches at Target (five SKUs) and Costco, including organic apple chips and a new cheesecake product.
• In-house packaging initiatives, planned for next year, which could save significant costs compared to the $1.5 million spent on outsourced packaging in 2026.

BranchOut Food Inc. (NASDAQ: BOF) will host a conference call and webcast on Thursday, August 13, 2026, to review its second quarter 2026 financial results and provide a corporate and shareholder update. The event is scheduled for 4:30 PM Eastern Time and will last for 60 minutes. This announcement serves as the primary mechanism for the company to communicate its recent operational and financial performance to stakeholders.

The call will feature prepared remarks from Eric Healy, Chief Executive Officer, and John Dalfonsi, Chief Financial Officer, followed by a question-and-answer session. BranchOut Food, a food technology company based in Bend, Oregon, specializes in natural fruit and vegetable snacks produced through its proprietary GentleDry™ process. The company’s technology preserves up to 95% of the original nutrition of fresh produce and is protected by over 17 patents.

Event Details

Investors and analysts can access the earnings call through multiple channels. A live webcast will be available on the company’s designated platform, with an archived version remaining accessible for approximately three months following the event. For those preferring audio-only access, dial-in numbers are provided for both U.S. toll-free and international callers.

Participants may also use the Call me™ feature for instant telephone access, with the link becoming active approximately 15 minutes prior to the start of the event. This ensures seamless connectivity for investors who prefer not to manually dial in.

Replay Information

A replay of the conference call will be available approximately three hours after the conclusion of the live event. The replay will remain accessible through Thursday, August 27, 2026, at 11:59 PM ET. Investors who miss the live broadcast can listen to the full discussion using the following replay dial-in details.

BranchOut Food operates as a leading international food technology company, serving as a trusted brand, ingredient supplier, and private-label provider. The company’s focus on high-quality dehydrated products positions it within the growing health-conscious snack sector. Further information about the company’s products and technology can be found at www.branchoutfood.com .