Eshbal Reports Financial Results for Q3 and Provides Corporate Update

Executive Summary

• Eshbal Functional Food Inc. reported Q3 2025 revenue of US$3.38 M (up 25% YoY) and nine‑month revenue of US$10.1 M (up 16% YoY), with gross margin expanding to 29% in Q3 and 27% over the nine months.
• Net loss for Q3 was US$0.507 M and US$2.1 M for the nine‑month period, driven primarily by a one‑time US$2 M non‑cash listing expense from the recent RTO; operating income remained positive at US$0.127 M for the nine months.
• The company signed a definitive agreement to acquire a majority interest in D2BD Foods (New York) to secure U.S. distribution, and plans to commence local manufacturing in Q1 2026 to support its North American expansion.

Key Details

• Revenue – Q3 2025: US$3.38 M (+25% vs. Q3‑2024).
• Gross Profit – Q3 2025: US$0.995 M (29% of revenue, up from 22% YoY).
• Revenue – Nine months ended Sep 30 2025: US$10.1 M (+16% vs. prior year).
• Gross Profit – Nine months: US$2.7 M (27% of revenue, up from 22.8% YoY).
• EBITDA – Nine months: US$0.679 M.
• Operating Income – Nine months: US$0.127 M (positive despite new public‑company costs).
• Net Loss – Q3 2025: US$0.507 M; Net Loss – Nine months: US$2.1 M, largely due to a non‑recurring US$2 M non‑cash listing expense from the RTO.
• Israeli subsidiary performance: Revenues up ~10% (NIS), gross margin 25%, net profit ≈6% of revenue – all YoY improvements.
• M&A Activity: Definitive agreement signed to acquire a majority stake in D2BD Foods (New York) providing initial access to key U.S. retail channels; closing pending.
• North American Expansion: Strengthened commercial leadership and broker relationships for flagship gluten‑free pita bread; local manufacturing slated to start Q1 2026.
• Management Commentary: CEO Tomer Bar Meir highlighted margin improvement, operational efficiency, and the one‑time nature of the net loss, emphasizing continued focus on North American footprint and M&A‑driven growth.

Notable Quotes

“Q3 reinforces the strength of our core Israeli operation: Revenue is growing, production is more efficient and margins continue to improve… While consolidated results are influenced by currency fluctuations and listing‑related accounting and one‑time items, our underlying fundamentals remain strong.” – Tomer Bar Meir, CEO

Materiality Assessment: Material – Positive (significant revenue growth and margin expansion, plus strategic acquisition and manufacturing plans, outweigh the one‑time loss).