Earnings call transcript: Off The Hook YS Q1 2026 revenue rises, stock dips

Off The Hook YS Inc. reported a strong start to 2026 with a significant increase in revenue and unit sales for the first quarter, driven by higher pre-owned boat transactions. Despite these gains, the company’s stock saw a decline in aftermarket trading. The stock price dropped by 7.24% to $2.44, reflecting investor concerns over declining new boat sales and increased operating expenses. The decline extends a troubling trend, with shares down 24% over the past six months and 36% over the past year. Yet InvestingPro analysis suggests the stock may be undervalued at current levels, with its Fair Value estimate indicating potential upside. For investors seeking bargains, OTH appears on InvestingPro’s Most Undervalued list.

Off The Hook YS Inc. demonstrated robust growth in Q1 2026, achieving record revenue and unit sales. The company sold 127 boats, a 46% increase from the same quarter last year, driven by a strong performance in the pre-owned segment. However, the decline in new boat sales and rising operating costs posed challenges.

Off The Hook projects continued growth through its NextBoat AI platform and recent acquisition of Apex Marine. The company aims to scale its operations and enhance service offerings, positioning itself for long-term revenue expansion. Future revenue forecasts for FY2026 and FY2027 are $145.32 million and $163.49 million, respectively. InvestingPro Tips highlight that the company operates with significant debt and is burning through cash quickly—critical factors for investors to monitor. For deeper analysis, OTH is among 1,400+ US stocks covered by comprehensive Pro Research Reports, which transform complex financial data into clear, actionable intelligence.

CEO Jason Ruegg highlighted the transformative potential of the NextBoat AI platform, stating, "Our strategic investments in technology and infrastructure will drive significant growth and operational efficiency." He emphasized the company’s focus on expanding its broker network and service capabilities.

During the earnings call, analysts inquired about the company’s strategy to address declining new boat sales. Management reiterated their focus on premium brands and quality over quantity, aiming to improve margins and customer satisfaction. Additionally, questions about the impact of rising interest rates on financial products were addressed, with management acknowledging the challenge but expressing confidence in their strategic initiatives to mitigate risks.

Operator: I would now like to hand the conference over to your speaker today, John Evans, Investor Relations. Please go ahead.

John Evans, Investor Relations, Off The Hook: Thank you. Good afternoon, everyone, and welcome to Off The Hook’s first quarter 2026 earnings conference call. With us today are Brian John, Off The Hook’s Chief Executive Officer, Jason Ruegg, the company’s Founder and President, and Chad Corbin, the company’s Chief Financial Officer. Blake Phillips, the company’s COO, will join us for Q&A. Jason will begin the call with an overview of the business, followed by Brian, who will discuss our performance and strategic initiatives. Chad will review the financial results, after which we’ll open the line for questions. I’d like to start reminding you that certain comments on this call are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of today. These statements involve risks and uncertainties that could cause results to differ materially from expectations.

These risks include, but are not limited to, the impact of seasonality and weather, global economic conditions, and the level of consumer spending, the company’s ability to capitalize on opportunities or grow its market share, and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission, which can be found in the investor relations section of the company’s website. Also on today’s call, management will make comments referring to non-GAAP financial measures. Management believes that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company’s core operating results. These measures can also help investors who wish to make comparisons between Off The Hook and other companies on both a GAAP and non-GAAP basis. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in today’s earnings release.

The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date that forward-looking statements are made, except as required by law. Please also note that all comparisons of our first quarter 2026 results are made against the first quarter of 2025 results, unless otherwise noted. I’d also like to remind everyone that today’s call is being recorded, and an archived version of the call will be available on the company’s website sometime after the call. I’d like to turn the call over to Jason. Jason?

Jason Ruegg, Founder and President, Off The Hook: Thank you, John. Good afternoon, everyone. We appreciate you joining us today. First, I want to thank our team across the country for the work that went into delivering a strong first quarter of 2026. The progress we’ve made reflects a lot of hard work, long hours, and relentless focus on execution. I’m incredibly proud of what this team has built and grateful to everyone who helped us bring it to this point. There are four pillars to where we were and where we are going. One, over the past year, we built the infrastructure needed to build the best platform to buy, sell, service, and maintain pre-owned boats in the U.S. and took that company public. Two, we are now scaling the company and platform aggressively.

Three, our NextBoat AI platform is the multiplier that will help us grow and scale from over $100 million revenue in 2025 into what we think will be a multi-billion dollar revenue company. Four, we’re gonna grow as a profitable public company that keeps all the stakeholders, investors, employees, vendors, and customers in mind. Since I founded this company, we’ve been profitable every year for 13 years. Over the past year, along with going public, we have made major investments in the infrastructure to grow the company and scale to a multi-billion dollar plus revenue company. I believe that the opportunity in pre-owned boats remains robust, with roughly three-quarters of all boat transactions in the U.S. involving pre-owned vessels, and yet the process for buying and selling them still remains highly fragmented and inefficient. Our platform brings speed, transparency, and liquidity to the market.

Because of our position as the market maker and velocity trader of pre-owned boats, we are in a unique position to build the future of used boat sales, a platform that enables thousands of people to buy and sell boats from anywhere, backed by our technology, capital, and infrastructure. This is not a traditional boat dealership. It is a scalable, decentralized marketplace built for how boats will be bought and sold going forward. With that, I’ll turn the call over to our CEO, Brian John, who will walk through our performance in the first quarter of 2026 and discuss the strategic initiatives for driving our growth through 2026. Brian?

Brian John, Chief Executive Officer, Off The Hook: Thank you, Jason, and good afternoon, everyone. We appreciate you joining us today. As Jason mentioned, the first quarter of 2026 continued what we promised by delivering record revenue of $29.8 million, representing year-over-year growth of over 9%. We also achieved record unit volume, selling 127 boats during the year, an increase of more than 46% versus 87 boats in Q1 of 2025. This revenue does not count the value of the boats sold in the fastest-growing brokerage business, where we added 30 new brokers in the first quarter. Looking closer at the 127 boats sold in the first quarter, sales were split evenly between brokerage and wholesale, with approximately 60 boats sold in each category. Note that brokerage revenue is recognized only by the commissions earned.

We believe that it is important to monitor the transaction value of boats sold across both brokerage and wholesale. On an apples-to-apples comparison, brokerage transactions amounted to $33.99 million in dollar value of boats, followed by wholesale at $26.2 million. The total transaction value of the 127 boats sold was $61.5 million, with an average selling price of $500,000 and an average gross profit of almost 11%. Looking at where our brokers are located and where we sold the most boats, the transaction value of combined brokerage and wholesale boats in South Florida was $41.2 million.

Other notable regions include North Carolina at $10.195 million and West Coast of Florida for $5.851 million. Motor yachts and center consoles are the primary driver of the dollar value of boats, contributing $19.5 million and $16.186 million. Together, these two categories represent over 58% of the dollar value of boats sold. Sales performance showed a consistent upward trend throughout the quarter. Monthly dollar value of boats sold grew from $11.2 million in January to $19.2 million in February, peaking at $31.1 million in March, making each month higher dollar value than the last. This continued in the first month of the second quarter, where the dollar value of boats sold continued to grow, and the OTH revenue for that month was $21 million.

So far, our revenue has exceeded the second quarter of 2025 only in the first half of the second quarter finished. Importantly, this growth is not driven by a single initiative. It reflects progress across multiple parts of our platform, including stronger brokerage productivity, improved inventory availability, and continued momentum in our brokerage oper