GrabAGun Q2 2026 earnings: Margin gains were outweighed by higher expenses

GrabAGun Digital Holdings (NYSE: PEW) reported Q2 2026 net revenue of $23.2 million, up 9.4% from $21.2 million a year earlier, while diluted EPS fell to -$0.06 from $0.08. Gross margin expanded by 290 basis points, but substantially higher operating expenses pushed the company into an operating loss and negative adjusted EBITDA.

Core financial results

Revenue growth and a favorable product mix lifted quarterly gross profit by 39.4%. However, the increase in gross profit was not enough to absorb the expansion in general and administrative expenses.

Adjusted EBITDA is a non-GAAP measure. It excludes items including interest income, depreciation and amortization, stock-based compensation, transaction costs, and business-optimization costs.

Business and segment performance

Firearms remained the main source of revenue, with sales rising 8.5% to $19.3 million. Non-firearms sales increased 7.5% to $3.6 million, while service sales contributed $0.2 million without a comparable contribution from PEW Logistics in the prior-year quarter.

Management attributed firearms growth primarily to higher average order value and a continued shift toward higher-priced products. Those factors also supported the improvement in gross margin, alongside targeted pricing.

Website traffic rose 12.6% year over year. Mobile generated 71.3% of sessions, 69.9% of transactions, and 67.5% of net revenue, making it the company’s largest digital channel. Estimated customer lifetime value increased 4.1% to $819.41.

PEW Logistics, launched in January 2026, remained at an early stage. KelTec Weapons and Derya Arms joined before quarter-end, while Backwoods Suppressors became the third manufacturing customer in July, after the quarter closed. The platform broadened GrabAGun’s service offering, but its current revenue contribution remained limited.

Gross-margin gains were overwhelmed by overhead growth

Quarterly gross profit increased by approximately $0.9 million, but general and administrative expenses rose by approximately $4.2 million to $5.4 million. Sales and marketing expenses increased only modestly, from $0.2 million to $0.3 million, making G&A the main source of the operating-cost increase.

The company cited stock-based compensation, public-company expenses, and personnel additions as drivers of its higher year-to-date costs. Q2 included $0.5 million of stock-based compensation, $0.1 million of transaction costs, and $0.3 million of business-optimization costs. Even after adjusting for these and other specified items, adjusted EBITDA was negative, indicating that the profitability decline was not solely the result of non-cash or non-recurring expenses.

Interest income of $0.8 million, up from less than $0.1 million a year earlier, partially offset the operating loss at the net-income level.

Cash flow and balance sheet

Cash-flow data was provided for the first six months rather than Q2 alone. Operating activities used $8.3 million of cash in the first half of 2026, compared with $0.2 million of cash generated in the prior-year period. In addition to the $3.6 million year-to-date net loss, cash flow was affected by a $4.1 million reduction in accounts payable, a $1.3 million decline in unearned revenue, and increased inventory investment.

Cash and cash equivalents declined from $110.4 million at the end of 2025 to $97.5 million on June 30, 2026. During the first half, GrabAGun also spent $2.8 million on property and equipment, capitalized $0.4 million of software additions, and used $2.4 million for share repurchases. The company had $7.7 million of long-term debt and $8.7 million remaining under its authorized repurchase program at quarter-end.

Recent insider transactions

The supplied insider data shows 146,698 shares purchased in 13 transactions and 36,380 shares sold in nine transactions over the preceding six months, resulting in net purchases of 110,318 shares. The latest entries with an explicit transaction direction were three direct sales on July 16, 2026; these transactions should not be interpreted on their own as a judgment about the company’s outlook.

Risks investors should monitor

• Operating-cost pressure: G&A growth significantly exceeded the increase in gross profit. Continued public-company, personnel, or implementation costs could delay a return to operating profitability.
• Cash consumption: First-half operating cash outflow, capital spending, and repurchases reduced the cash balance by $12.9 million. The remaining $97.5 million provides liquidity, but the rate of cash use remains important.
• PEW Logistics execution: The new platform had three manufacturing customers by July, but service revenue was still small. Its ability to generate recurring, profitable revenue has not yet been demonstrated in the reported results.
• Regulatory uncertainty: Management noted that the timing, scope, and implementation of proposed changes to federal firearms purchasing policies remain uncertain. Changes could affect customer processes and compliance requirements.

Summary

GrabAGun’s Q2 2026 revenue and gross margin benefited from higher average order value, a shift toward higher-priced firearms, and pricing execution. The central issue was the much faster growth in overhead, which turned both GAAP operating income and adjusted EBITDA negative. Investors’ next focus is whether gross-margin progress and PEW Logistics growth can begin to offset the expanded expense base while the company controls first-half cash consumption.