Giftify's Q3 Results Signal Powerful Business Transformation: Gross Billings Surge 29% While Margins Expand

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Giftify, Inc. (NASDAQ: GIFT) delivered compelling third quarter 2025 results that showcase a company in the midst of a strategic transformation, combining robust top-line growth with significantly improved profitability metrics that should capture the attention of growth-focused investors.

The Numbers Tell a Growth Story

The company's Q3 performance reveals impressive momentum across key business metrics. Gross billings—which represent the total dollar value of customer transactions and provide the clearest picture of marketplace activity—surged 28.8% year-over-year to $39.1 million. This substantial increase demonstrates that Giftify's platforms are gaining traction with consumers seeking value in an inflationary environment.

Even more impressive is what's happening on the profitability front. Gross margin expanded by a remarkable 710 basis points to 20.0%, up from just 12.9% in the prior year period. This kind of margin expansion is exactly what investors want to see—it indicates the company is not just growing revenue, but doing so in an increasingly profitable manner.

The bottom line improvements are equally compelling. Net loss improved by 40% to $2.4 million, while Modified EBITDA loss improved by 60% to just $0.3 million. These trends suggest Giftify is rapidly approaching breakeven and potential profitability—a critical inflection point for any growth company.

Understanding the Business Model Evolution

While reported net sales of $18.8 million declined from $23.2 million in the prior year, this actually reflects a positive strategic shift rather than business weakness. The company is deliberately transitioning more of its transaction mix to an agent model, where Giftify facilitates connections between suppliers and customers without taking on inventory risk.

This evolution is strategically smart for several reasons. Agent transactions require less working capital, carry lower inventory risk, and still generate attractive margins for the company. The proof is in the results: gross margins expanded dramatically even as the transaction mix shifted. As CEO Ketan Thakker noted, agent transactions represented approximately 7% of net sales in Q3 2025 compared to just 2% in the prior year period, with room for further optimization ahead.

Year-to-Date Performance Reinforces Positive Trajectory

The strong quarterly performance isn't an anomaly—it's part of a sustained trend. For the nine months ended September 30, 2025, gross billings increased 23.8% to $111.2 million, while gross profit grew 17.6% to $11.1 million. Year-to-date net loss improved by 45% to $8.2 million, demonstrating consistent progress toward profitability.

Strategic Initiatives Building Comprehensive Ecosystem

Beyond the headline numbers, Giftify has been executing on multiple strategic initiatives that position the company for accelerated growth:

TakeOut7 Integration: The May 2025 acquisition of TakeOut7 expands Giftify's technology offerings to include comprehensive online ordering solutions and AI-powered digital marketing services for independent restaurants. This creates new revenue streams while deepening relationships with the company's network of over 184,000 restaurant partners.

Operational Excellence: During Q3, the company reduced operating expenses by 8% year-over-year while maintaining investment in growth initiatives. This disciplined approach to cost management, combined with improving margins, demonstrates management's ability to balance growth with fiscal responsibility.

Technology Leadership: Recent announcements highlight CardCash's technological advantages, including delivering nearly $150 million in gift cards over the past year with 99.5% of digital orders fulfilled in under 2 seconds. This industry-leading fulfillment speed, powered by proprietary automation technology, creates a significant competitive moat.

Platform Expansion: The launches of the uChoose corporate rewards platform and Restaurant Management Center create entirely new revenue opportunities. The uChoose platform targets the $46 billion corporate rewards market, while the Restaurant Management Center introduces the company's first subscription model for restaurant partners.

Multiple Growth Levers Point to Continued Momentum

Looking ahead, Giftify has identified several clear opportunities to drive continued growth:

• B2B Expansion: Growing relationships with corporations and marketers who use gift cards for customer acquisition, loyalty programs, and employee rewards
• Restaurant Technology Solutions: Leveraging the TakeOut7 platform to provide end-to-end technology solutions for independent restaurants
• Transaction Mix Optimization: Continuing to shift toward higher-margin agent transactions while growing overall gross billings
• Operational Scaling: Expanding the business while maintaining disciplined expense management

Strong Recent Momentum Across All Platforms

Additional context from recent company announcements reinforces the positive trajectory. CardCash reported 75% year-to-date sales growth in its affiliate marketing channel, driven by strategic partnerships and enhanced consumer engagement. The platform also achieved a 10% increase in new customer approvals through enhanced fraud detection technology, demonstrating the ability to grow while maintaining platform security.

These operational achievements complement the strong quarterly financial performance and suggest the company is firing on all cylinders across its business platforms.

Management Demonstrates Confidence

CEO Ketan Thakker's commentary on the Q3 results struck a confident tone: "Our third quarter results demonstrate meaningful progress in our strategic transformation. We're particularly pleased with the 28.8% growth in gross billings, which reflects the true scale of our marketplace activity and the strong demand we're experiencing across both our CardCash and Restaurant.com platforms."

He continued: "The improvements we're seeing in our gross margin and bottom-line performance demonstrate that we're making real progress. We believe Giftify is well-positioned in the growing digital gift card and restaurant deals market. The combination of our CardCash and Restaurant.com platforms, enhanced by our recent Takeout7 acquisition, gives us a unique ability to serve both consumers and merchants across the dining ecosystem."

Market Opportunity Remains Substantial

The addressable market for Giftify's platforms continues to expand. U.S. gift card sales are projected to surpass $190 billion annually, while the corporate rewards market reaches $46 billion. With Americans increasingly seeking ways to stretch their budgets in an inflationary environment, Giftify's value proposition of discounted gift cards and restaurant deals resonates strongly with cost-conscious consumers.

Investment Perspective

For retail investors, Giftify's Q3 results present an intriguing growth story at a potentially attractive entry point. The company is demonstrating:

• Strong revenue growth with gross billings up nearly 29%
• Dramatic margin expansion of over 700 basis points
• Rapid improvement in bottom-line metrics (net loss down 40%, Modified EBITDA loss down 60%)
• A clear pathway to profitability with Modified EBITDA loss of just $0.3 million in Q3
• Multiple new revenue streams from recent strategic initiatives
• Technological advantages through proprietary automation and fulfillment capabilities
• Exposure to large and growing addressable markets

The combination of accelerating top-line growth, expanding margins, and improving profitability metrics represents exactly the kind of inflection point that can generate substantial shareholder value. While the company remains pre-profitable, the trajectory is clearly positive and the gap to profitability is narrowing rapidly.

Conclusion

Giftify's (GIFT) third quarter results demonstrate a company successfully executing a strategic transformation. The shift toward higher-margin agent transactions, integration of complementary acquisitions, launch of new platform capabilities, and sustained focus on operational efficiency are all bearing fruit in the financial results.

With gross billings growing at nearly 30% annually, margins expanding dramatically, and losses declining rapidly, Giftify appears well-positioned to capitalize on the substantial opportunities in the digital gift card and restaurant deals markets. For investors seeking exposure to the growing digital marketplace sector with a company approaching profitability, Giftify's Q3 results provide compelling evidence of business momentum and strategic execution.

As the company continues to integrate its acquisitions, optimize its transaction mix, and scale its operations, the coming quarters should provide further evidence of whether this transformation can deliver sustainable profitable growth. Based on the Q3 results, the trajectory certainly appears promising.

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