GrabAGun Digital Holdings (NYSE:PEW) Reports Mixed Q3 2025: Revenue Beat Overshadowed by Earnings Miss

GrabAGun Digital Holdings (NYSE:PEW) reported third-quarter financial results that presented a complex picture for investors, featuring a significant revenue beat contrasted with a substantial earnings miss and a subsequent negative market reaction.

Earnings and Revenue Performance Versus Estimates

The company’s performance against analyst expectations was a tale of two halves. On the top line, GrabAGun demonstrated considerable strength, while profitability metrics told a different story.

• Revenue: The company reported Q3 2025 revenue of $22.3 million, significantly surpassing the analyst estimate of $18.9 million. This represents a 10% year-over-year increase.
• Earnings Per Share (EPS): GrabAGun reported a net loss per share of $0.12, a stark contrast to the analyst expectation for a profit of $0.01 per share. This compares to earnings of $0.06 per share in the prior year quarter.

Market Reaction and Price Action

Following the earnings release, the market reacted negatively. The stock traded down in after-hours activity, reflecting investor concern over the unexpected quarterly loss despite the strong sales figures. This suggests that the market is currently placing a heavier emphasis on profitability than on revenue growth in its assessment.

Quarterly Financial Highlights

The press release detailed several key financial and operational developments from the quarter, providing context for the mixed results.

• Sales Breakdown: Firearms sales, the company's core segment, increased 12% to $18.1 million, driven by a 16% growth in volume. Non-firearms sales saw a more modest 3% increase to $4.2 million.
• Profitability Metrics: Gross profit margin improved to 11%, up approximately 200 basis points from 9% in the prior year quarter. However, this was offset by a net loss of $3.3 million, which the company attributed primarily to $3.2 million in stock-based compensation expense and other one-time costs related to its recent public listing on the NYSE.
• Balance Sheet Strength: A standout figure from the report is the company's cash position. GrabAGun holds $109.5 million in cash and cash equivalents with no debt, equating to $3.65 per share.
• Capital Return: The company executed $8.9 million in share repurchases during the quarter, underscoring management's confidence and a commitment to returning capital to shareholders.

Business and Strategic Developments

Beyond the financials, management highlighted several positive business trends and strategic initiatives.

• Outpacing the Industry: The company emphasized that its firearms sales volume grew 16% year-over-year, significantly outperforming the broader market, as measured by a 5.3% decline in Adjusted NICS background checks.
• Mobile-First Success: Mobile sessions grew 13% and accounted for 67% of transactions, indicating successful execution of the company's mobile-first strategy and an encouraging trend toward younger demographics of buyers.
• New Initiatives: GrabAGun launched "Shoot and Subscribe," an ammunition subscription service, and welcomed a new Chief Marketing Officer to bolster brand presence and customer engagement.

Looking Ahead

The company did not provide a specific financial outlook for the coming quarter or full year in its press release. Investors will likely look to management's commentary on the subsequent earnings call for clarity on the path to profitability and how it plans to leverage its strong cash position. The current analyst consensus estimates for Q4 2025 are for revenue of $28.2 million and EPS of $0.02.

For a detailed history of GrabAGun's earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. All investment decisions involve risk, and readers should conduct their own research before making any investment decisions.