Financial Pulse

Revenue rebounded 4.3% MoM to $4.80M after January's seasonal trough. YoY growth of 12.7% is solid but trending below the 20% target. The channel mix continues shifting: DTC was 79.3% of revenue in Feb-26, while Amazon (6.9%) and Retail (6.8%) gain share. December's $7.4M print — driven by holiday Costco loads and gifting — remains the high-water mark for the trailing 12. Stripping out the Dec-25 outlier, the business is averaging ~$4.7M/month, which annualizes to roughly $56M — meaning the current run rate needs ~21% acceleration to reach the $68M implied by a 20% growth target off 2025's $56.5M base.

DTC net revenue of $3.80M was essentially flat MoM (-0.8%) and up 1.5% YoY. Gross sales of $4.29M were down 5% from January's $4.51M. The discount rate held at 7.7% ($329K in discounts) — nearly double the 4.3% seen in Feb-25, continuing to compress net revenue. Refunds improved slightly to 4.1% ($177K). AOV rebounded sharply to $54.34 from $51.50 in January, reversing four months of compression. New subscriber acquisition surged to 632/day (17,696 total), up 30% from January's 487/day — a strong recovery. But at a $99 CAC, the math is tight: with AOV at $54 and ~6 average orders before churn, LTV is roughly $324. A $99 CAC yields a 3.3x LTV:CAC ratio — adequate but not comfortable.

The updated cohort data tells an encouraging story — recent vintages are retaining at or above historical averages, and Jan-26 is showing a notably strong M1 reading. Jan-26's 67.3% M1 retention is 5.3pp above the all-time average of 62.0% — the strongest M1 in the trailing 12 vintages. Feb-26's M0 of 91.3% is also the highest in the dataset. If these hold through M2-M3, the elevated acquisition spend may be attracting higher-quality subscribers. Skip rates remain elevated at 45.4% in February (up from 38.8% in January), meaning a significant portion of 'retained' subscribers are skipping rather than ordering. The churn curve flattens meaningfully after Month 5 (~28%), suggesting a loyal core emerges around the 6-month mark. All-Time Avg retention at M6 is 25.0% — meaning roughly 1 in 4 subscribers acquired today will still be active 6 months from now.

Gross margin expanded to 53.6% — the strongest print in the trailing 12 outside of December's holiday spike. The 3.2pp improvement from January (50.4%) was driven by lower shipping & handling costs and a favorable product cost mix. EBITDA, however, worsened to -$90K (-1.9%) from -$111K (-2.4%) in January — an improvement in absolute terms but still in negative territory. S&M spend of $1.86M (38.8% of revenue) is the primary margin drag — up from the trailing 6-month average of ~35%. Payroll ($323K) and G&A ($475K) were stable. The P&L waterfall: 53.6% gross margin is healthy, but 38.8% going to S&M leaves no room for breakeven. To reach 2% EBITDA, S&M needs to compress to ~33% of revenue — either through revenue growth diluting spend, or improved CAC efficiency.

Amazon posted $329K in net revenue, down 23% from January's strong $426K. This is still up 25.6% year-over-year (vs $262K in Feb-25), so the growth trajectory remains intact despite the MoM pullback. January's $426K was the second-highest Amazon month ever, so some reversion was expected. Amazon now represents 6.9% of total revenue. The long-term trend is clear: Amazon has grown from ~$5K/month in early 2024 to a consistent $300-500K/month, adding meaningful diversification beyond DTC.

Retail net revenue of $328K nearly doubled from January's $240K, delivering the strongest non-December month in the trailing 6. Gross revenue of $328K came in with trade spend well-managed. YoY, retail is up 114% from Feb-25's $153K — the channel is clearly scaling. The December $1.69M Costco load-in remains the outlier, but the baseline is building: the trailing 3-month average (ex-December) is ~$264K, up from ~$125K a year ago. Trade spend volatility remains a watch item — rates have swung from 8.6% to 31.4% in recent months.

Gather posted $52K in revenue for February, essentially flat MoM and -4.2% YoY vs Feb-25's $54K. The café continues to operate near breakeven but isn't growing. Revenue has been stuck in the $50-55K/month range for the past 6 months. Without topline growth, profitability depends entirely on cost management. The path forward: either find a way to push revenue above $60-65K/month (new menu items, events, delivery), or accept that Gather is a brand asset, not a profit center, and manage costs accordingly. Headcount of 20 suggests labor is the dominant fixed cost.

The 18-month goal: 20% year-over-year revenue growth with 2%+ EBITDA margin. Here's where we stand through the first two months of 2026.

Revenue trajectory. February's 12.7% YoY growth is encouraging but below the 20% target. YTD 2026 revenue of ~$9.3M (Jan + Feb) is tracking roughly 11-13% above the same two months last year. To hit 20% YoY for the full year, the business needs to accelerate from the current ~$4.7M/month run rate (ex-December) to a sustained ~$5.3-5.5M/month in H2 2026. The good news: the channel diversification underway — Retail at +114% YoY and Amazon at +26% YoY — provides growth vectors beyond DTC, which grew only 1.5% YoY in February. DTC can't carry the 20% target alone; the path runs through Amazon scaling and Retail building consistent volume.

EBITDA trajectory. February EBITDA of -$90K (-1.9% margin) improved from January's -$111K (-2.4%) in absolute terms, but the margin is still firmly negative. The trailing 12-month EBITDA is roughly +$1.9M, but that's heavily skewed by the December holiday spike (+$1.3M in one month) and two strong months (Sep +$535K, Oct +$491K). To reach 2% EBITDA on a ~$68M revenue base, we need ~$1.4M in annual EBITDA — roughly $115K/month. The gap from today's -$90K to +$115K is about $205K/month. The biggest lever: S&M efficiency. At 38.8% of revenue in February, S&M is the dominant drag. Compressing to ~33% on a growing revenue base would close most of the gap.

What to watch over the next 3 months. March and April will be telling. Key signals: (1) Jan-26 cohort M2 retention — if it holds above 45%, that 67.3% M1 reading was real quality, not noise; (2) Feb-26 cohort M1 — with 91.3% M0 (the highest in the dataset), does it convert to strong M1?; (3) CAC staying under $100 while maintaining 600+/day acquisition; and (4) Gross margin defending 53%+ as channel mix shifts toward lower-margin Retail. The cohort data is cautiously encouraging — recent vintages are retaining at or above historical averages through M5, and the two newest cohorts (Jan/Feb 26) are starting stronger than any in the trailing 12.