8-K: My Size Reports Strong Revenue Growth Amidst Rising Losses

My Size, Inc. announced a 53% year-over-year revenue increase for Q2 2026, reaching $3.1 million, but also reported a widening net loss and declining gross margins.

Summary

• My Size, Inc. reported a 53% year-over-year increase in revenue for the second quarter of 2026, reaching $3.07 million, up from $2.01 million in Q2 2025.
• For the first six months of 2026, revenue grew 57% to $5.46 million compared to $3.49 million in the same period of 2025.
• The company's resale platform, Percentil, saw significant growth, with quarterly revenue increasing to $413,000 from $168,000 year-over-year.
• The SaaS Solutions segment maintained high gross margins of approximately 86% on $211,000 in revenue.
• However, consolidated gross margin decreased to 31.7% in Q2 2026 from 56.0% in Q2 2025, primarily due to a shift in revenue mix towards lower-margin e-commerce activities.
• Net loss for Q2 2026 was approximately $1.75 million, an increase from $1.47 million in Q2 2025.
• Operating loss for the quarter was $1.72 million, compared to $586,000 in the prior-year quarter.
• Net cash used in operating activities improved slightly in the first six months of 2026 to $1.97 million from $2.31 million in the prior year.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed to negative sentiment. While revenue growth is strong, the increasing net loss and decreasing gross margin indicate significant challenges in profitability and operational efficiency.

Positives

• Significant year-over-year revenue growth of 53% in Q2 2026 and 57% in the first half of 2026.
• Continued scaling of the Percentil resale platform, with revenue more than doubling year-over-year.
• SaaS Solutions segment continues to generate high gross margins (approximately 86%).
• Improvement in net cash used in operating activities for the first six months of 2026.
• The company is focusing on improving contribution margin, operating leverage, and cash efficiency.

Negatives

• Consolidated gross margin declined significantly to 31.7% from 56.0% year-over-year, driven by a shift to lower-margin e-commerce.
• Net loss increased in Q2 2026 to $1.75 million from $1.47 million in Q2 2025.
• Operating loss widened substantially to $1.72 million in Q2 2026 from $586,000 in Q2 2025.
• Research and development expenses doubled year-over-year, and sales and marketing expenses more than doubled.
• The company expects to continue generating losses and negative operating cash flows in the foreseeable future, requiring additional capital.

Risks

• The company expects to continue generating losses and negative operating cash flows, necessitating additional capital.
• The shift in revenue mix towards lower-margin e-commerce activities is negatively impacting overall gross margins.
• Increased operating expenses, particularly in sales and marketing, are contributing to higher operating losses.
• The company's ability to achieve its objective of building a stronger business and sustainable financial model is dependent on improving unit economics and cash efficiency.

Future Outlook

Management intends to place increased emphasis during the second half of 2026 on improving contribution margin, increasing higher-margin revenue, optimizing operating expenses, and strengthening cash efficiency. The company expects to continue generating losses and negative operating cash flows and will require additional capital.

Management Comments

• "MySize continued to demonstrate that we can build scale across a diversified fashion platform."
• "Revenue increased 53% year-over-year and exceeded $3 million for the quarter, while our SaaS and recommerce businesses continued to demonstrate the attractive margin characteristics that we believe can become increasingly important to the overall economics of the Company and its subsidiaries."
• "As we enter the second half of 2026, our priorities are evolving. Growth remains important, but our focus is increasingly on the quality of that growth improving contribution margins, increasing the proportion of higher-margin revenues, extracting greater operating leverage from our existing infrastructure and reducing cash consumption."
• "Our objective is not simply to build a larger company. Our objective is to build a stronger one."
• "We believe the assets and capabilities are now in place, and our focus is increasingly on converting that platform into sustainable economic value for our shareholders."

Industry Context

StockSavvy.ai notes that MySize is operating in the dynamic fashion technology sector, which is characterized by rapid e-commerce adoption, increasing focus on sustainability (recommerce), and the application of AI for personalization and efficiency. The company's strategy of integrating diverse solutions like AI sizing, e-commerce, recommerce, and distribution aims to capture value across multiple industry pain points. However, the reported decline in gross margins highlights the competitive pressures and cost structures inherent in scaling e-commerce operations, a common challenge for many players in this space.

Comparison to Industry Standards

• The reported consolidated gross margin of 31.7% for Q2 2026 is significantly below the typical gross margins seen in pure-play SaaS companies (often 70-90%) and also lower than many established e-commerce retailers, which can range from 40-60%.
• The company's SaaS Solutions segment achieving 86% gross margin aligns with industry standards for high-margin software businesses.
• The growth in the recommerce sector (Percentil revenue up 146% YoY) is in line with the broader trend of increasing consumer interest in sustainable fashion and second-hand marketplaces.
• The increasing net loss despite revenue growth is a concern, as many scaling tech companies aim to show a path to profitability or at least improving operating leverage. Companies like ThredUp (recommerce) and Stitch Fix (styling/e-commerce) have faced similar challenges in balancing growth with profitability.

Stakeholder Impact

• Shareholders: Potential dilution from future capital raises, but also potential for long-term value creation if the company successfully pivots to profitability and sustainable growth.
• Creditors: Increased risk due to continued losses and negative cash flow, necessitating careful monitoring of liquidity and financing arrangements.
• Employees: Potential impact on morale and job security if the company faces significant financial distress or restructuring.
• Suppliers/Partners: Continued business operations depend on the company's ability to secure financing and manage its cash flow effectively.

Next Steps

• Focus on improving contribution margin.
• Increase proportion of higher-margin revenues.
• Optimize operating expenses.
• Strengthen cash efficiency.
• Translate platform scale into stronger unit economics.
• Develop a more sustainable financial model over time.
• Evaluate additional financing and strategic capital alternatives.

Key Dates

Recommendation

The strong revenue growth is positive, but the deteriorating gross margins and increasing net losses are significant concerns. The company's reliance on future capital raises and its stated focus on efficiency suggest a turnaround is needed. A 'hold' recommendation reflects the uncertainty and the need to see evidence of improved profitability and cash generation before considering a more positive stance.

Keywords

fashion technology, e-commerce, resale, SaaS, size and fit, revenue growth, gross margin, net loss