NGS Q3 Revenue Climbs 13% as CVS and Walmart Rollouts Expand
Nutritional Growth Solutions reported a 13% revenue increase in Q3 FY25, driven by expanded US retail distribution and inventory replenishment. The company raised AU$760k to support growth but faces a tight cash runway, banking on upcoming capital raises and retail momentum.
- Q3 FY25 revenue up 13% to US$486k
- Happy Tummies now in ~5,500 CVS stores
- Walmart SKU range expanded with KidzProtein strawberry flavor
- AU$760k capital raised via share placement
- Cash runway under two quarters, additional funding planned
Revenue Growth and Retail Expansion
Nutritional Growth Solutions (ASX, NGS) has reported a 13% increase in revenue for the third quarter of fiscal 2025, reaching US$486,000. This growth was primarily driven by replenished inventory following earlier shortages and the successful rollout of its products in major US retail chains. Notably, the company’s Happy Tummies® brand is now stocked in approximately 5,500 CVS stores, marking its largest US retail expansion to date. Additionally, Walmart renewed its placement agreement for 2025/26, expanding the KidzProtein® product line to include a new strawberry flavor.
Operational Efficiency and Cash Flow
Gross margins remained stable during the quarter, supported by normalized production schedules and reduced manufacturing costs. Despite these improvements, NGS recorded a net cash outflow from operating activities of US$379,000, reflecting ongoing investments in growth and elevated administrative expenses. The company completed final production runs for its Healthy Heights® portfolio, resolving previous supply constraints and building inventory to cover approximately five months of forecast sales.
Capital Raising and Liquidity Position
To support its US retail rollout and working capital needs, NGS successfully raised AU$760,000 through a share placement to sophisticated and professional investors. At the end of the quarter, cash and cash equivalents stood at US$169,000. However, based on current operating cash flows, the company’s available funding covers just over half a quarter, underscoring the urgency of its ongoing capital raising efforts. Management is optimistic that the planned follow-on capital raise will materially improve liquidity and financial flexibility.
Outlook and Strategic Focus
CEO Stephen Turner expressed cautious optimism, highlighting the company’s progress toward profitability through revenue growth and cost discipline. With retail distribution channels now firmly established and inventory levels stabilized, NGS anticipates sequential revenue growth in the upcoming quarter as consumer sales from the CVS rollout gain momentum. The company also expects operational enhancements and margin improvements to reduce cash burn and support sustainable growth.
Challenges Ahead
While the retail expansion and capital raising initiatives provide a solid foundation, NGS faces the critical challenge of extending its cash runway and converting retail presence into consistent cash flow. The success of its upcoming funding rounds and the pace of consumer uptake in the US market will be pivotal in determining the company’s near-term financial health and ability to execute its growth strategy.
Bottom Line?
NGS’s retail gains and capital raise set the stage for growth, but cash constraints demand swift execution.
Questions in the middle?
- Will the upcoming capital raise secure sufficient funding to extend NGS’s cash runway?
- How quickly will consumer sales from CVS and Walmart placements translate into positive cash flow?
- What strategies will NGS deploy to manage elevated administrative costs while scaling operations?
