Stran & Company, Inc. (NASDAQ:SWAG) reported higher first-quarter revenue and a swing to profitability, with management saying the promotional products and loyalty solutions provider has reached an “inflection point” after several years of investment in technology, client relationships and operations.
Chief Executive Officer Andy Shape said on the company’s first-quarter 2026 earnings call that total revenue rose 8.9% year over year to $31.2 million, driven by momentum from both existing clients and new business wins. Gross profit increased 13.7% to $9.6 million, while gross margin expanded to 30.9% from 29.6% in the prior-year period.
Profitability Improves as Expenses Stay Flat
Stran posted net income of $744,000 for the quarter ended March 31, 2026, compared with a net loss of $393,000 in the same period a year earlier. Shape said EBITDA improved to $1 million, compared with negative EBITDA of $201,000 in the prior-year period.
Chief Financial Officer David Browner said the move to profitability reflected gross profit growth outpacing revenue growth, along with essentially flat operating expenses. Total operating expenses decreased 0.2% to $9 million. As a percentage of sales, operating expenses improved to 28.8%, compared with 31.4% a year earlier.
“This marks a clear inflection in profitability driven by gross profit growth outpacing revenue growth and essentially flat operating expenses,” Browner said.
Stran Segment Leads Revenue Growth
Browner said sales in the company’s Stran segment increased 11.9% to $23.4 million, up from $20.9 million in the prior-year quarter. He attributed the increase primarily to higher spending from existing clients and new customers.
Gross profit in the Stran segment rose to $7.8 million from $6.8 million. Operating expenses for the segment increased to $6.2 million from $5.6 million, which Browner said was primarily due to investment in Stran Digital Solutions, higher expenses tied to the company’s Magento open-source e-commerce platform and higher sales and marketing costs. As a percentage of sales, Stran segment operating expenses decreased slightly to 26.6% from 26.9%.
Loyalty Solutions Segment Turns Profitable
Management highlighted a significant improvement in the Stran Loyalty Solutions, or SLS, segment. Sales in the segment were approximately flat at $7.8 million, but gross profit increased to $2.2 million from $1.7 million.
Shape said the SLS segment generated operating income of $532,000 in the first quarter, compared with an operating loss of $462,000 in the prior-year period. He said the improvement reflected the successful integration of the Gander Group business and continued operating discipline. Gross margin in the SLS segment expanded to 28.7% from 21.8%.
Browner said operating expenses in the SLS segment decreased to $1.7 million from $2.2 million, primarily due to reduced headcount and lower sales-related costs. As a percentage of sales, SLS operating expenses improved to 21.9% from 27.7%.
Client Wins and Digital Platform Support Growth Strategy
Shape said the quarter included several strategic client wins and relationship expansions. The company extended a three-year, multimillion-dollar partnership with what Shape described as one of the world’s premier nonprofit running organizations. Stran also secured a new multimillion-dollar agreement with a leading gaming company to support a large-scale rewards and loyalty initiative.
In addition, Shape said the company added two top global 100 law firms as new clients, which he said further diversifies Stran’s customer base and reflects demand from professional services organizations for premium service, strategic execution and scalable technology capabilities.
Shape also discussed the launch of Stran Digital Solutions, which he described as a proprietary SaaS-based platform designed to improve client engagement, campaign execution and analytics, while creating opportunities for recurring revenue over time.
“With Stran Digital Solutions, we are moving beyond being just a best-in-class promotional products provider and becoming an integrated marketing ecosystem partner,” Shape said.
Balance Sheet, Acquisitions and Buybacks
As of March 31, 2026, Stran had approximately $12.8 million in cash, cash equivalents and investments. Shape said the company’s financial position gives it flexibility to invest in technology, expand sales and marketing, evaluate acquisitions and pursue other growth initiatives.
Shape said strategic acquisitions remain a core part of Stran’s long-term growth strategy, but that the company is being “disciplined and selective” in evaluating potential targets. He said Stran is focused on opportunities that enhance technology capabilities, expand its client base, strengthen vertical expertise and create long-term shareholder value.
Shape also said the company intends to resume its share repurchase program after trading blackout restrictions prevented repurchases during the first quarter. He said management believes the current share price “meaningfully undervalues” Stran and described buybacks as an attractive use of capital.
The company did not take any questions during the call. Shape closed by saying Stran entered the remainder of the year with momentum, an expanding pipeline, two profitable segments and a platform positioned for continued growth.
About Stran & Company, Inc. (NASDAQ:SWAG)
Stran & Co, Inc engages in the provision of promotional marketing and branded merchandise services. It offers promotional product, custom manufacturing, custom packaging, warehousing, and program management. The company was founded by Andrew Shape and Andrew Stranberg in 1994 and is headquartered in Quincy, MA.
