Solo Stove’s parent company Solo Brands is releasing their Q4 2026 financials on the morning of Thursday, March 19th but they gave a sneak peak this morning. They released some preliminary numbers that show they’re doing significantly better than this time last year.

Q4 2025 was pretty transformative for Solo Brands. It was their underperformance in that quarter to wrap-up the year that led to the separation of their CEO, a revamp of the executive team, restructuring their company, and getting back to releasing innovations.

They noted in their Q4 2025 earnings release that they might not be able to pay their debt obligations through the year. Not only did they re-work their credit agreement, their results show they are improving.

Our fourth quarter results demonstrate the impact of decisive cost restructuring actions alongside solid execution on new product launches. Preliminary Fiscal 2025 fourth quarter Adjusted EBITDA is expected to exceed $9 million, up from $6.3 million in the prior year period. Importantly, this performance positions Solo Brands in full compliance with all financial covenants under our existing financing agreements, notwithstanding continued revenue pressure during the quarter.

As we enter 2026, we are focused on building a leaner, more profitable, and resilient platform, supported by meaningful new product launches this spring across Solo Stove, Chubbies, and our Watersports portfolio.

John Larson, President and Chief Executive Officer, Solo Brands

When Solo Brands redid their credit agreement last summer, they received a nice runway from the bank to be able to restructure their business without tripping any covenants. It appears in the redlined version of their credit agreement that they don’t have any fixed charge or total leverage requirements for 2025.

The only real negative covenant they had to manage to for the year was having over $25 million in EBITDA. The adjusted EBITDA that they reported was around $17.9 million but bank adjusted EBITDA can have significant add-backs usually for restructuring, lay-offs, etc. Given John Larson’s comments, the add-backs must have been enough to clear the $25 million hurdle.

Their negative covenants kick in starting September 30th, 2026 when their initital minimum fixed charge coverage ratio is 0.7:1 and their maximum leverage ratio is 9.5:1. They start to ratchet down from there.

To support this period where they have been right-sizing their business, they’ve had additional reporting requirements with the bank under their credit agreement. These have included tighter reporting windows and additional requirements like supplying a 13-week cash flow forecast. A 13-week cash flow is a tool used by many companies, but especially those that are distressed, because it forecasts their ability to pay their bills.

Market Reaction

There was a large market response today to Solo Brands’ announcement. Their stock had been bouncing around $6 but with the news it jumped 45% to $8.90.

That’s great momentum to start the year. Hopefully they can continue that with the product launches they have planned for the spring as they get back to what originally made the brand successful.