MySize, Inc. (NASDAQ: MYSZ) reported a 53% year-over-year increase in revenue for the second quarter of 2026, reaching $3.07 million compared to $2.01 million in the same period last year. The growth was primarily fueled by the expansion of its fashion e-commerce activities and contributions from recently integrated businesses, including Ten Peacks. For the first half of 2026, total revenue rose 57% to $5.46 million from $3.49 million.

Despite the strong top-line performance, profitability metrics deteriorated significantly. The company reported a net loss of $1.75 million for the quarter, widening from a net loss of $450,000 in the second quarter of 2025. Operating loss also expanded to $1.72 million from $586,000 in the prior-year period. This divergence between revenue growth and profit erosion highlights the capital-intensive nature of the company’s current expansion strategy.

Segment Performance and Margin Dynamics

The company’s revenue mix shifted materially toward lower-margin segments during the quarter. Fashion e-commerce generated $2.23 million in revenue, while the resale platform, Percentil, saw its quarterly revenue more than double to $413,000 from $168,000 in the prior year. In contrast, the high-margin SaaS Solutions segment, which includes Naiz Fit, generated $211,000 in revenue but maintained an attractive 86% gross margin.

This mix shift directly impacted consolidated margins. Gross profit fell to $973,000 from $1.12 million in the second quarter of 2025, causing the gross margin to contract sharply from approximately 56.0% to 31.7%. Management attributed this decline to the greater proportion of revenue coming from commerce activities, which operate at lower gross margins than SaaS and recommerce businesses.

What the Numbers Show

A critical observation from the filing is the disproportionate impact of operating expenses on the bottom line relative to revenue growth. While revenue grew by 53%, sales and marketing expenses surged by 136% to $1.23 million, driven by higher Amazon-related fees and the inclusion of Ten Peacks. Research and development expenses also doubled to $285,000 from $142,000. This indicates that the current revenue growth is being offset by aggressive investment in customer acquisition and product development, rather than organic operating leverage.

Cash Flow and Liquidity

On a positive note, cash efficiency improved during the first half of 2026. Net cash used in operating activities decreased to $1.97 million from $2.31 million in the comparable prior-year period. This improvement was supported by working-capital management, including reductions in inventory, accounts receivable, and prepaid expenses. As of June 30, 2026, MySize held $453,000 in cash and cash equivalents, along with $258,000 in restricted cash. The company noted it will require additional capital to support its operations and growth strategy in the foreseeable future.