PSQ Holdings Q1 2026 Earnings Call - Revenue Surges 167% as Fintech Pivot Yields Operating Leverage

Bella, Conference Operator: Hello, thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to PSQ Holdings First Quarter 2026 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. We do request for today’s session that you please limit to one question and one follow-up. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to William Kent. You may begin.

William Kent, Investor Relations, PSQ Holdings: Good morning, and welcome to the PSQ Holdings First Quarter 2026 Earnings Call. Joining me today are Dusty Wunderlich, our Chairman and Chief Executive Officer; Mike Pena, our Chief Financial Officer; and Krista Wenzel, our Chief Accounting Officer. Before we begin, please note that the information we discuss today, including our outlook, is current as of today and includes forward-looking statements that involves risks and uncertainties. We are not required to update these statements if new information arises. For details on factors that could cause actual results to differ, please see today’s earnings press release and our SEC filings, including our 2025 Form 10-K. We may also present non-GAAP measures alongside financial measures calculated according to GAAP. I’ll now hand the call over to Dusty.

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Thank you, Will, and good morning, everyone. On our year-end call in March, I said you should expect deliberate communication when there is meaningful progress to report. Q1 2026 is meaningful progress. At the end of 2025, we committed to focusing our strategy, being accountable in operations, improving cash efficiency, and raising revenue per employee. This quarter’s results show we are delivering on those promises. Revenue grew 167% year-over-year during the first quarter. Operating expenses declined 18%. Operating loss improved 34%. Payments delivered its largest gross merchandise volume, or GMV, quarter ever. Credit GMV grew 32%, and revenue per employee, our North Star metric, improved 287%. Each figures represent actual results, not projections. Krista will walk through the P&L story, and Mike will speak to platform scale, cash, and our capital position.

At the ROTH Conference in March, a replay is available on our IR site. I said AI adoption was expected to meaningfully change revenue per employee and that we aim to improve this metric every quarter. Q1 is our first data point supporting that thesis. AI continues to be a force multiplier, and we’re seeing in real time how it is actively pushing us to redesign and upgrade how we work. Since we first deployed machine learning in Cordova’s underwriting in 2021, we have expanded its use across engineering, financial operations, and risk monitoring. AI agent infrastructure has improved our situational awareness, operational efficiency, and accelerated our team’s decision making. With a smaller team and better tools, we are working more efficiently, and Q1 reflects it. The restructuring we executed over the past two quarters is now fully reflected in our cost structure.

We reduced staff by 41% from September 2025 to March 2026, wound down the marketplace segment, and reduced contractor and consulting expenses. These actions are expected to deliver approximately $8 million in annualized cash savings, and we view them not as a one-time reset, but as a foundation of a more capital-efficient operating model designed to support sustained revenue growth with disciplined cost management. Payments is our fastest-growing revenue driver. Q1 GMV reached $186.2 million, reflecting ongoing merchant onboarding and strong existing relationships. We’ve signed several new merchant agreements and are negotiating more. It is noteworthy that industries beyond our core advert category are actively seeking to implement for payment offerings in response to continued politically motivated debanking and deplatforming pressure. In credit, Cordova grew 32%, even though the broader firearms market remained soft.

NSSF adjusted NICS data, which represents the number of firearm background checks initiated through the NICS, show that softness has continued into early 2026. Despite the backdrop, our growth in credit is being driven by execution, improved conversion, higher approval rates, customer re-engagement, and expansion into adjacent categories. Credit quality remains strong. Our giving product, which we previously referred to as Impact, is a specialized component of our payment stack serving nonprofits and political campaigns. We continue to see inbound interest from organizations drawn to both the quality of our platform and the deplatforming pressure they face elsewhere. Our focus is on building a quality product and working closely with our early clients to refine the platform for scale. This is a deliberate measured ramp, and we will share more as the product matures.

One more item I want to cover is that you may have noticed the publicsquare.com website is now redirecting to a new cordova.com experience. This change is a natural evolution of our brand as we shift fully to a fintech-focused organization and create a more unified customer experience. We continue to actively pursue the sale of our brand segment. The sale process remains ongoing, and we hope to enter into a definitive agreement in the first half of 2026. Since the beginning of 2026, we have made a number of operational changes in the brand segment, including rightsizing the team, renegotiating our third-party logistics relationship, and making material changes to sales and marketing, all of which have led to significant cost savings, which we are realizing now and we believe are beneficial to the ultimate acquirer of the business. Our priorities are unchanged.

Grow revenue with discipline, reduce cash burn, and drive towards profitability. Revenue per employee is our leading indicator. As that metric rises, margins improve, cash burn declines, and our operating results progress. We do not need to add many employees to drive real revenue growth. Our infrastructure is in place, our merchant relationships are expanding, and AI is making us more efficient with each passing quarter. We believe Q1 reflects meaningful progress, and our focus is on continuing to build on that momentum each quarter. I’ll now turn the financial portion of the call over to Krista Wentzel, our Chief Accounting Officer, and Mike Pena, our Chief Financial Officer. Krista will walk through how the progress I highlighted is showing up in the financials and how the shift to a focused fintech model is translating into improved financial performance.

Krista Wenzel, Chief Accounting Officer, PSQ Holdings: Thank you, Dusty, and good morning, everyone. I want to start with the headline of our Q1 financials because it is the single most important point I can leave you with today. Revenue grew, operating expenses declined, and operating loss improved meaningfully, all in the same quarter. That combination is a direct tangible outcome of the decision we made in the third quarter of 2025 to refocus the company as a pure-play financial technology business. Q1, 2026 is the first full quarter that decision shows up on both halves of the income statement, and the P&L validates the path. Net revenue from continuing operations was $8.2 million, compared to $3.1 million in the prior year quarter. That’s a 167% year-over-year growth. The drivers are precisely the parts of the business we have been investing in.

Payments, Cordova’s loan and lease origination, and lease merchandise revenue. The revenue mix for the quarter was payment processing revenue, including payments and PSQ Impact of $3.7 million, loan and lease contracts sold net of $2.1 million, lease merchandise revenue of $900,000, interest income on loans of $800,000, and direct revenue of $700,000. On the other side of the ledger, total operating expenses, which includes G&A, sales and marketing, and R&D combined, declined $2 million or 18% year-over-year. That decline reflects the full period impact of the structural cost actions Dusty referenced, including the headcount reduction, the wind down of PublicSquare, and tighter discipline on contractor and consulting spend. Within that, G&A declined $1.6 million or 20%, and R&D declined $400,000 or 39%.

In both cases, primarily driven by lower share-based compensation, which was $1.7 million lower in total. Sales and marketing rose modestly by $100,000 as we shifted from paid acquisition toward existing merchant expansion. Together with revenue up 167% and operating expenses down 18%, those two halves produced the result we are most focused on. Operating loss for Q1 2026 was $6.1 million, an improvement of $3.2 million or 34% compared to $9.3 million in the prior year quarter. On a non-GAAP basis, which excludes share-based compensation, depreciation and amortization, and unallocated corporate costs, segment non-GAAP operating loss was $900,000, a 70% improvement from $2.8 million last year. The pivot to fintech is producing operating leverage.

Below the operating line, our reported net loss was $6.5 million, compared to $4.4 million in Q1 2025. At first glance, that may look inconsistent with the operating improvement I just walked through. It is not. I’ll explain why. The $2 million year-over-year increase in net loss is driven almost entirely by a single non-cash item, changes in the fair value of our warrant and earn out liability. In Q1 2025, we recognized roughly $7.8 million in non-cash gains from those fair value changes. In Q1 2026, the equivalent gains were approximately $700,000. The difference, about $7.1 million, essentially explains the year-over-year change in net loss on its own. Those liabilities are marked to market with our stock price.

From December 2024 to March 2025, our share price declined, which mechanically reduced the value of liabilities and resulted in a large non-cash gain. From December 2025 to March 2026, our share price was more stable, so the corresponding gain was proportionally smaller. This is an entirely non-cash item. The same dynamic explains the modest increase in loss per share from $0.10 to $0.12. Stripping out the warrant and earn out movement, our underlying business performance improved meaningfully year-over-year, consistent with the operating line story. Net revenues from discontinued operations, which include brands and marketplace, were $3.7 million, consistent with Q1 of 2025. However, brands now represent 98% of discontinued revenue compared to 88% a year ago, reflecting the substantial wind down of marketplace.

Income from discontinued operations was approximately $27,000 in Q1 2026, compared to a $2.4 million loss in the prior year quarter, reflecting the marketplace wind down and stronger operating performance at brands as it moves towards divestiture. With that, I’ll turn it over to Mike to walk through platform scale, cash, and our liquidity position.

Mike Pena, Chief Financial Officer, PSQ Holdings: Thank you, Krista. I’m pleased to join my first earning call as CFO of PSQ Holdings. Before I go further, I want to acknowledge James Rinn, who stepped down as CFO on April 30th. I appreciate his work during a critical transition, and I look forward to building on that foundation. I’ll pick up where Krista left off and walk through how the operating story converges into measurable platform scale, cash, and a stronger run rate. Payments delivered $186.2 million in GMV during the quarter compared to $36 million in Q1 2025. That’s an increase of 417%. That step change reflects sustained merchant onboarding, deeper engagement from existing relationships, and the full period contributions of agreements signed in the back half of last year.

Credit GMV was $15.1 million, up 32% year-over-year, achieved against a soft backdrop in the broader firearms market. The growth on the credit side is being driven by execution. That’s better conversion, higher approval rates, and re-engagement of our existing borrower base, not from a tailwind from the underlying market. Importantly, these are the levers we control and plan to continue building on. As we improve conversions and approval quality, we are also seeing better alignment between volume growth and unit economics, which is critical to scaling the credit platform responsibly. As a reminder, our credit business exhibits seasonal patterns, with demand typically moderating following the first quarter. While we are encouraged by the year-over-year growth and improvements in conversion and customer engagement, we expect some normalization in quarter-to-quarter trends, with performance more appropriately evaluated on a year-over-year basis.

On headcount, we ended the quarter at 47 full-time employees, compared to 68 a year earlier. That’s a 31% reduction. Pairing that with the 167% revenue growth Krista described, revenue per employee climbed from $44,864 to $173,583. That’s a 287% improvement and the metric that Dusty has identified as our North Star. Importantly, we believe we can continue to grow revenue without a corresponding increase in headcount, given the infrastructure and tools now in place. The savings tied to that headcount reduction and the related restructuring are expected to generate approximately $8 million in annualized cash savings. Q1 is the first full quarter under the reduced cost base, and we’re now starting to see that come through in the numbers.

I’ll briefly highlight an expected dynamic within our lease-related revenue. As we transition from balance sheeting consumer leases to selling new originations, lease revenue will moderate as prior leases run off. This is an intentional outcome of the shift and reflects improved capital efficiency, not a change in underlying demand. Operating cash burn was $4.1 million for Q1 of 2026, compared to $6.4 million in Q1 of 2025. That’s a $2.3 million improvement or 36% year-over-year. I want to be clear on what is included in that $4.1 million. Approximately $1.2 million relates to non-recurring items, including approximately $315 thousand in severance tied to restructuring actions.

In addition, our legal and accounting costs were higher in Q1 of 2026, directly related to the preparation of our annual report and financial statement audit. Adjusting for those one-time payments, underlying operating cash burn was approximately $2.9 million for the quarter, and that is the level we expect to keep working down as we move through the year. Said simply, we improved cash burn by 36% year-over-year. A meaningful portion of what remains is one time, and the structural run rate is materially better than the headline figures suggest. We ended the quarter with $11.8 million of cash, restricted cash, and cash equivalents, of which $10.1 million was unrestricted. Net working capital was $11.2 million.

On our revolving line of credit, which funds Cordova’s consumer lending originations, we had $7.4 million outstanding on the $10 million facility as of March 31. The facility was extended in March of 2026 through July 31 of 2027. We draw on the line to fund consumer loans and leases and repay it as those receivables are collected or sold to third parties. We believe our existing cash, together with the anticipated proceeds from the planned sale of the brand segment, will be sufficient to fund operating and capital needs for at least the next 12 months. We also have access to our at-the-market offering program. Our capital priorities are clear. Continue to reduce cash burn, maintain operating discipline, and convert that progress into a clear path to profitability. With that, I’ll turn it back to Dusty to close.

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Thank you, Mike. I’ll close with the same message I shared at the ROTH Conference in March. We have found our focus, Q4 showed the impact of that focus, and Q1 confirmed it. Our job now is keep executing and improve our model each quarter. We’re building a payments and financial infrastructure business with lasting value. We serve merchants who need a trusted provider, and we earn that trust through consistent performance and staying power. Q1 is evidence of that commitment. We plan to keep delivering on it. I’ll now turn the call over for questions.

Bella, Conference Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We do request for today’s session that you please limit to one question only and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Thomas Forte with Maxim Group. Please go ahead.

Thomas Forte, Analyst, Maxim Group: Great. first off, Dusty, Krista, Will, congrats on the quarter. Mike, welcome to the call. one question and one follow-up. Dusty, you did a beautiful job in your prepared remarks talking about how you’re going to capitalize on artificial intelligence, run the company with a very modest head count. When I think about earnings calls for the first quarter, Amazon, Google, Microsoft, Meta, and others have talked a lot about agentic commerce. I was hoping on how you could talk about how you believe you can capitalize on agentic commerce.

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Hey, Tom. great to have you here, and thanks for the thoughtful question. I know that is certainly top of mind for a lot of folks right now in what is agentic commerce going to mean for the fintech world. I think what we’re seeing is the foundation being set of how we’re going to be doing commerce in the future, and that is going to be built on the basis of payments and the ability for companies to be able to move money on behalf of agents in a safe way. We are continuing to keep an eye on that. it’s moving quickly as you can imagine.

We think, again, our brand promise of, you know, really sticking to, merchants in industries that are traditionally underserved, in some cases, underbanked or debanked, that brand promise still goes through even from an agentic commerce perspective. We continue to believe that payments will be at the forefront of agentic commerce, and we’ll continue to work towards that in our own product roadmap as we watch this unfold in the market, Tom.

Thomas Forte, Analyst, Maxim Group: Great. Thanks, Dusty. For my follow-up, somewhat related, as a longtime follower of the industry, and I guess technically multiple industries, e-commerce, cryptocurrency, et cetera, I guess there was a point in time where people thought Bitcoin might have a high level of acceptance in e-commerce, but now it emerges with stable coins. I’d appreciate your thoughts on stable coins and if you think that’ll become, if use of that for payments in the future will grow over time.

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Yeah, absolutely. I mean, the GENIUS Act, I think, changed the stablecoins adoption considerably. It took away the gray area from a regulatory perspective. I believe that is, stablecoins are the payment rails of the future. The current payment rails have been built over decades. Some of the code that’s out there is still built in COBOL, and not much has changed over the last 50 years. We still have the duopoly between Visa and Mastercard, the sponsor banking system. All of this has been layers put on top of layers with old technology. What stablecoins is really doing is compressing the payment rails and making it much easier to move money 24/7 in a safe and secure way, and that is going to drastically change the cost to merchants.

We are very, very bullish on stablecoins and believe that, in the future, we will see a completely different players in regards to how money is being moved. We believe that that’s probably gonna start in industries and adoption will start in industries that have traditionally been misunderstood by the payment rails, and that’s where we see a unique opportunity for Cordova and PublicSquare to play in the new generation of stablecoin adoption.

Thomas Forte, Analyst, Maxim Group: Great. Thanks for taking my question, Dusty.

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Yeah. Thanks, Tom. Take care.

Bella, Conference Operator: Again, if you would like to ask a question, press star one on your telephone keypad. That concludes our Q&A session. I will now turn the call back over to William Kent for closing remarks.

Mike Pena, Chief Financial Officer, PSQ Holdings: Thank you. We actually have some submitted questions via the Say Technologies platform we’d like to cover before closing out the call. Our first question.

William Kent, Investor Relations, PSQ Holdings: I’ll put this to the group. PSQ has fallen from its post-launch highs. Your founder stepped down as CEO as part of the fintech pivot, and some of the excitement after Donald Trump Jr. joining the board has faded. What steps are you taking, Dusty, as the new CEO to reach stable profitability and deliver returns?

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Yeah. Thank you for the question, and it’s a great question. I would definitely point to the last two earnings calls and my ROTH Conference remarks in the sense that we are a focused team now that is working on discipline execution. I think prior leadership lacked the experience to be able to focus the business in a way that rewarded shareholders. The team that came mostly from the Cordova acquisition, which we had a proven track record of building a business very capital efficient and profitable as well. I think going forward at the end of the day shareholder value is driven by building a real business that can generate real cash flow in the future.

That will continue to be our focus. We believe that if you can drive good focused results in a business that can, in the future, drive really good return on cash and return on investment for shareholders, this will start to be seen in the shareholder price as well. Our commitment remains the same. You’ll continue to hear us say that earnings call over earnings call. This will not be chasing opportunities or hype or overpromising. This will be just stone-cold execution and discipline of how we run this business.

William Kent, Investor Relations, PSQ Holdings: Thank you, Dusty. Next question’s kind of a follow-on to that. What is your strategy over the next three years to improve shareholder value?

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: Yeah. I’d reiterate again of that, you know, at the end of the day, any business is based on, you know, what is the ultimate free cash flow, and that means you have to position products where there’s demand in the market, which you can see from our revenue growth, we have found demand in the market, and then you have to materialize that demand into ultimate execution and profitability. That is what we’re going to continue to do quarter-over-quarter. Right now we’re at a place where we have to continue to grow the top line in order to get to that cash flow positivity along with being operationally efficient.

We are balancing those two components of the business, and this is the beauty of the AI generation that we are in, is that I think we can do that more efficiently than you have been able to over the last five to 10 years in a fintech business. We expect to continue to grow that top line and also find that operational efficiency to ultimately drive that cash flow long term. At the end of the day, that is what shareholders are looking for, is, a return on their investment, which means a cash flow-driving business model, which I think we can do. We have the margins, we have the growth rate now, and we have the discipline.

William Kent, Investor Relations, PSQ Holdings: Excellent. Our last submitted question that we’re gonna go through. On the credit side, does PSQ’s strategy most closely resemble Klarna, Sezzle, or Affirm, or is PSQ pursuing a differentiated approach of its own?

Dusty Wunderlich, Chairman and Chief Executive Officer, PSQ Holdings: It’s a great question. I would say from a comp perspective, you know, in regards to products, we most closely resemble what Block has done. We have been very intentional about really owning the entire payments stack with our merchants, so that means traditional payment processing alongside consumer credit. This is really the bundled services we’ve talked about. We believe this makes merchants extremely sticky and it drives long-term value. It’s a value proposition of the merchant where they’re not having two sets of pricing, they’re not having two API documentation, and ultimately, it helps us to drive better pricing value to the merchant as well, and it also makes them more operationally efficient.

The one thing I will say from Affirm, the Klarna, the Sezzle, is, there’s a few things I think from the credit side that really make us, distinct and different, is that we built a platform, and this gets into the financial infrastructure, that allows for a lot of complexity, meaning that we can have multiple different types of credit products. We can have different types of lenders on there. We’ve had banks on our platform before. We’ve had other lenders. It makes us very malleable to the credit markets. We also have taken a very serious approach to leveraging, proprietary macroeconomic models and also, AI and machine learning into our underwriting, which I think you can see from a peer-to-peer perspective. We tend to outperform our peers from a credit perspective.

We always look at ourselves as a credit shop first with really good tech that enables that because if you cannot underwrite through credit cycles in the different changing interest rate environments you’re not going to survive as a credit provider. We’ll continue to think through how we become more robust as a payments and financial infrastructure platform which I think differentiates us from true consumer credit peers that were mentioned in the question.

William Kent, Investor Relations, PSQ Holdings: Excellent. Thank you, Dusty. Thank you all for joining the PSQ Holdings First Quarter 2026 Earnings Conference Call. We look forward to sharing our progress with you next quarter. Have a great morning.

Bella, Conference Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now disconnect. Everyone, have a great day.