8-K: MySize Narrows Losses, Boosts Q2 Revenue with Percentil

MySize, Inc. reported narrowed losses and a 2% year-over-year revenue increase in Q2 2025, driven by its Percentil acquisition, positioning itself in Europe's circular fashion economy.

Summary

• Revenue for the three months ended June 30, 2025, was $2.0 million, representing a 2% increase year-over-year, primarily due to the addition of Percentil.
• Revenue for the six months ended June 30, 2025, was $3.5 million, a 30% decrease year-over-year, attributed to a decline in Orgad sales due to market changes.
• Gross profit for the three months ended June 30, 2025, was $1.1 million, up 14% year-over-year.
• Gross profit for the six months ended June 30, 2025, was $1.5 million, down 30% year-over-year.
• Operating loss for the three months ended June 30, 2025, was $586,000, a 49% improvement from the corresponding period in 2024.
• Operating loss for the six months ended June 30, 2025, was $1.6 million, a 25% improvement from the corresponding period in 2024.
• Cash position as of June 30, 2025, was $4.28 million, with $2.90 million in inventory.
• Percentil contributed $180,000 in revenue since its acquisition in May, with integration milestones ahead of schedule.
• Orgad's transition to Fulfillment by Amazon (FBA) has lowered logistics costs and improved delivery efficiency.

Sentiment

Score: 7

Explanation: The filing presents a mixed financial picture with Q2 improvements but H1 declines, yet emphasizes a strong strategic pivot into the high-growth, regulation-driven European circular fashion economy via the Percentil acquisition. The narrative is forward-looking and optimistic about market capture and long-term value, despite current challenges in one segment.

Positives

• Q2 2025 revenue increased by 2% year-over-year to $2.0 million, primarily driven by the strategic acquisition of Percentil.
• Gross profit for Q2 2025 increased by 14% year-over-year to $1.1 million.
• Operating loss significantly improved by 49% in Q2 2025 to $586,000, indicating enhanced operational efficiency.
• Operating loss for the first half of 2025 improved by 25% to $1.6 million.
• The acquisition and integration of Percentil are ahead of schedule, contributing $180,000 in revenue since May.
• Percentil strategically positions the company to capitalize on the European Union's regulatory push for sustainable apparel and the rapidly growing circular fashion economy.
• Orgad's optimization through Fulfillment by Amazon (FBA) has successfully lowered logistics costs and improved delivery efficiency.

Negatives

• Revenue for the six months ended June 30, 2025, decreased by 30% year-over-year to $3.5 million.
• The significant decrease in H1 2025 revenue is attributable to a decline in Orgad sales due to market changes.
• Gross profit for the six months ended June 30, 2025, decreased by 30% year-over-year to $1.5 million, mirroring the revenue decline in the first half.

Risks

• Forward-looking statements involve significant risks and uncertainties, some of which are beyond control, and assumptions that could cause actual results to differ materially from historical experience and present expectations or projections.
• Actual results may differ materially from those in forward-looking statements, and the trading price for common stock may fluctuate significantly.
• Forward-looking statements are affected by the risk factors described in the company's filings with the U.S. Securities and Exchange Commission.

Future Outlook

The company is investing in long-term market capture in the European resale space, leveraging its triple-revenue model to create operational synergies and recurring cash flow. Percentil's contribution is expected to accelerate in the second half of 2025, driven by brand partnerships and regulatory compliance demand. Management believes European fashion resale will become the industry's infrastructure in five years, with Percentil at its center.

Management Comments

• "We are focused on building long-term value while delivering operational progress each quarter."
• "The EU is rewriting fashions rulebook. Percentil is designed to help brands comply with these new standards and unlock new opportunities for growth."
• "This is not an optional trend. It is a structural shift in the fashion industry, backed by regulation and consumer demand for sustainability."
• "Some companies see regulation as a hurdle. We see it as the competitive advantage."
• "In five years, we believe European fashion resale will not be a niche it will be the infrastructure of the industry. We intend Percentil to be at the center of that infrastructure, enabling brands to comply, delight customers, and operate profitably in a circular economy."

Industry Context

The announcement highlights the company's strategic alignment with the EU's Circular Economy Action Plan and Extended Producer Responsibility (EPR) for textiles. This regulatory push mandates durability, repairability, recyclability, and traceability in apparel, reshaping the fashion industry towards sustainability and circularity. The company aims to capitalize on this structural shift, positioning Percentil as a key platform for brands to achieve compliance and growth in the evolving European resale market.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through strategic acquisitions and market positioning in a growing industry segment, but also short-term revenue decline in an existing segment.
• Customers (Brands): Percentil offers a platform for compliance with new EU regulations and opportunities for growth in the circular economy.
• Customers (Consumers): Enhanced retail and resale experiences through technology like FirstLook Smart Mirror and Smart Catalog, and access to sustainable fashion options.
• Employees: Integration of Percentil suggests potential for new roles or shifts in focus.
• Suppliers/Partners: Potential for new brand partnerships for Percentil.

Next Steps

• Accelerate Percentil's contribution in the second half of 2025.
• Drive Percentil's growth through brand partnerships.
• Drive Percentil's growth through regulatory compliance demand.
• Continue investing in long-term market capture in the European resale space.
• Leverage the triple-revenue model to create operational synergies and recurring cash flow.

Key Dates

Recommendation

While Q2 results show some positive trends like narrowed losses and revenue growth driven by the Percentil acquisition, the significant 30% year-over-year revenue decline for the first half of 2025 due to Orgad sales raises concerns about the core business. The strategic pivot into the European circular fashion economy is promising given regulatory tailwinds, but it's an investment in future market capture. The company needs to demonstrate sustained growth from Percentil and stabilize its existing segments before a stronger recommendation can be made. For now, it's a 'hold' as the long-term potential is balanced against current mixed financial performance and execution risk in a transforming market.

Keywords

MySize, MYSZ, Percentil, Circular Fashion, Apparel Resale, EU Legislation, Sustainable Fashion, AI-powered Fashion, Sizing Solutions, E-commerce, Financial Results, Q2 2025, Nasdaq