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Eshbal's Q3 Financial Report: A Strong Step Forward

Eshbal Functional Food Inc. (TSXV: ESBL) has recently disclosed its financial performance for the third quarter ended September 30, 2025. The results indicate a significant turnaround in the company's operations, showcasing impressive revenue growth and improved profitability when compared to the same quarter in the previous year.

Financial Highlights

In Q3 2025, Eshbal recorded revenues of USD 3.38 million, reflecting a robust increase of USD 673 thousand or 25% from USD 2.7 million in Q3 2024. Gross profit for the quarter also saw a notable rise, reaching USD 995 thousand, which is 29% of total revenues, compared to just USD 596 thousand or 22% of revenues in the same period last year.

Furthermore, for the nine months ended September 30, 2025, Eshbal's revenues accumulated to USD 10.1 million, marking a USD 1.4 million increase (16%) compared to USD 8.7 million in the previous year. Gross profits for this nine-month period improved from USD 2 million in 2024 to USD 2.7 million in 2025, translating to a gross margin of 27%.

Despite these bright financial outcomes, the company reported a net loss of USD 507 thousand in Q3 and USD 2.1 million for the nine-month period. This downturn was largely influenced by a one-off, non-cash listing expense of USD 2 million associated with Eshbal's transition to a public company.

Operations and Market Strategy

While the consolidated results reflect temporary accounting impacts, Eshbal's Israeli subsidiary has performed steadily, showing a year-over-year revenue increase of approximately 10% and gross margins climbing to 25%. The net profit for this division surged by more than 50%, now standing at roughly 6% of total revenues.

Looking ahead, Eshbal is firmly focused on executing its expansion strategy into North America. As part of its strategy, Eshbal has taken several significant steps:

• - Acquisition Agreement: The company has signed an agreement to obtain a majority interest in D2BD Foods, based in New York. This move will facilitate Eshbal’s entry into key U.S. retail markets once the deal closes.
• - Enhanced Commercial Presence: Eshbal is strengthening its market presence in North America through established broker relationships, enabling the distribution of its flagship gluten-free products, including Pita Bread.
• - Local Manufacturing Plans: Eshbal is preparing to initiate local manufacturing operations in Q1 2026, aiming for efficiency in logistics and operations to support its North American strategy.

Tomer Bar Meir, CEO of Eshbal, expressed that the Q3 results reaffirm the solid performance of their core Israeli operations, emphasizing revenue growth, production efficiency, and improving margins. Bar Meir believes the net loss reported during this period is an atypical outcome, largely driven by accounting adjustments related to their public company status rather than fundamental operational weaknesses.

Future Outlook

The company is committed to developing its operations in Israel with a sharp focus on scalability and product diversification. In North America, the management team is poised to advance manufacturing arrangements, launch initial gluten-free products, and drive strategic integration efforts that underpin long-term sustainable growth.

Eshbal’s dedication to meeting the rising demand in the gluten-free and health-oriented food sectors positions it for promising future prospects. With over 300 SKUs in its lineup and over USD 11 million in revenues generated in 2024, Eshbal is navigating a proactive growth trajectory, keen on capitalizing on acquired growth opportunities and enhancing its market effectiveness in the burgeoning 'better-for-you' food landscape.

For more information, visit Eshbal Foods.