Amass Brands (NASDAQ:AMSS) reported second-quarter revenue growth of 2% as the company continued to shift its portfolio toward a smaller group of core beverage brands and expanded its non-alcoholic and functional offerings.
Net revenue for the quarter ended June 30 was approximately $5.6 million, compared with growth of 2% from the prior-year period. First-half net revenue was approximately $9.7 million, versus approximately $9.8 million a year earlier. Management said consolidated results reflected the effects of winding down lower-priority brands, inventory clearance actions, margin pressure and costs related to becoming a public company.
Core Brands Account for More Revenue
Amass identified Summer Water, Pizzolato MUSE, Good Twin and AMASS Electrolytes as its four priority core brands. Together, those brands generated approximately $3.9 million of brand-level revenue in the second quarter, an increase of 12% year over year. Core-brand revenue rose 11% during the first six months of 2026.
The core brands represented 67% of brand-level revenue during the quarter, up from 62% a year earlier. Meanwhile, revenue from discontinued brands declined 27% in the second quarter and 52% for the first half, a decline management characterized as intentional.
Lynn said the company is seeking to concentrate marketing investment, management attention and capital behind brands that offer stronger growth, working-capital characteristics and margins. He said Amass intends to manage certain legacy wine and spirits brands for cash flow while reducing investment in brands it considers lower priority.
Wine and spirits revenue declined approximately 3% in the second quarter and 5% in the first half as the company rationalized its portfolio. However, Lynn said Pizzolato MUSE reached the top position in the U.S. organic sparkling wine category by dollar share and is expanding distribution through Whole Foods Market nationwide.
Non-Alcoholic and Functional Segment Expands
Beginning in the second quarter, Amass began reporting wine and spirits and non-alcoholic and functional products as separate operating segments. Revenue in the non-alcoholic and functional segment rose 132% year over year to approximately $409,000 in the second quarter. First-half segment revenue increased about 133% to roughly $933,000.
The growth was driven by Good Twin, the company’s non-alcoholic sparkling wine brand, and the Q2 launch of AMASS Electrolytes. Lynn said AMASS Electrolytes generated its first revenue during the quarter and that the company had opened, or received commitments to open, distribution in California, Colorado, Illinois, Michigan, Georgia and New York.
During the question-and-answer session, Lynn said AMASS Electrolytes generated about $36,000 in revenue near the end of the second quarter. He said the product was developed internally after the company began exploring the category in January, and that its sachet format may support e-commerce sales and favorable working-capital characteristics.
Good Twin’s growth also contributed to short-term margin pressure, according to management. Lynn said stronger-than-expected demand and a national retail placement required expedited freight to maintain product availability. The company expects that pressure to ease as inventory planning and replenishment normalize.
DTC Sales Rise From a Small Base
Direct-to-consumer and e-commerce revenue increased to approximately $178,000 during the second quarter from approximately $31,000 a year earlier, representing an approximate 480% increase. First-half DTC and e-commerce revenue rose to approximately $328,000 from approximately $78,000.
All DTC revenue in the current quarter came from non-alcoholic products, including Good Twin and AMASS Electrolytes. Management said the channel remains a small portion of total company revenue but provides direct consumer relationships, faster product feedback and greater control over demand generation. Amass said it plans to make meaningful investments in the channel.
Margins and Losses Reflect Transition Costs
Reported gross margin was 26.7% in the second quarter. Core brands produced a 43.7% product margin, compared with 44.9% in the prior-year quarter, while other brands and discontinued brands generated product margins of 28.1% and 14.2%, respectively.
Chief Financial Officer Zach Ament said the overall margin decline reflected accelerated sales of slow-moving inventory, including some inventory sold below cost; shifts in product and channel mix; higher trade spending; tariffs on imported wine; and elevated freight costs. Excluding inventory write-downs and comparable adjustments, adjusted gross margin was approximately 29.3%.
Gross profit was approximately $1.5 million. Amass reported a loss from operations of approximately $5.9 million and a net loss of approximately $7.5 million. Adjusted EBITDA loss was approximately $1.7 million.
Ament said adjusted EBITDA excluded approximately $1.4 million of direct-listing and related costs, approximately $1.9 million in banker and advisory fees settled in stock, and inventory write-down and clearance-related items. He also cited roughly $1 million of non-cash accounting charges tied to the automatic conversion of convertible notes into common stock upon the Nasdaq listing.
Guidance Calls for Second-Half Growth
For the second half of fiscal 2026, Amass expects net revenue of at least $8.7 million, representing at least approximately 10% growth from the second half of fiscal 2025. The company projected revenue of at least $4.4 million in the third quarter and $4.3 million in the fourth quarter.
The company expects full-year 2026 revenue of no less than $18.5 million, or approximately 4% growth over fiscal 2025. For fiscal 2027, Amass is targeting net revenue growth of at least 20%, implying revenue of at least $22.2 million.
Management also reiterated that its public filings include disclosures regarding substantial doubt about its ability to continue as a going concern, its need for additional capital and Nasdaq notifications received July 22 concerning continuing listing requirements.
About Amass Brands (NASDAQ:AMSS)
AMASS Brands Inc (“AMASS”) is a Delaware corporation with our principal place of business in Santa Maria. Founded in 2016, AMASS is building a diversified premium beverage platform at the intersection of craft, wellness, and functionality. Our mission is to modernize drinking occasions with products that are premium, health-conscious, and culturally resonant. We operate across multiple categories—spirits, wine, and non-alcoholic alternatives—creating a uniquely diversified portfolio aligned with long-term consumer shifts toward moderation, premiumization, and wellness.
