Functional Brands Q1 Revenue Rises 3.5% to $1.65M; Net Loss Widens to $7M
Functional Brands reported Q1 revenue of $1.65 million, up 3.5% year-over-year, with gross profit rising 11% to $961,000 and gross margin expanding 390 basis points to 58.4%. Net loss widened to $7.0 million due to a $6.3 million non-cash equity charge, as the company expands Kirkman distribution and forms an AI partnership.
1. Q1 Financial Performance
Functional Brands recorded net revenue of $1.65 million in Q1 2026, up 3.5% year-over-year, with gross profit rising to $961,000 and gross margin expanding 390 basis points to 58.4%.
2. Operating Expenses and Non-Cash Charges
Operating loss widened to $0.68 million from $0.03 million due to increased public company expenses, while net loss reached $7.0 million driven by a $6.3 million non-cash GAAP equity exchange charge.
3. Strategic Growth Initiatives
The company expanded Kirkman distribution across eCommerce, retail and international channels, saw growing registered users on Tru2u.health, and broadened P2i™ Prenatal placement following a listing on iHerb.
4. Capital Structure and Partnerships
Functional Brands simplified its capital structure, signed an LOI to acquire blockchain-based intellectual property, and established an AI partnership with partnrup.ai to drive qualified traffic acquisition for Tru2u.health.