Key Insights from Our Q1 P&L Benchmark Report

Every month, when we sit down with clients, we hear some version of the same question:

“What are you seeing in the market”?

We see the books across dozens of $1M to $100M+ brands, and have a very unique view into how the market’s changing.

We want to share that.

Here are a few of the big findings from our recent Q1 P&L Benchmark Report

1. The Best Brands Are Still Growing, Despite The Environment

Among companies we tracked, half saw revenue increase in Q1.

But gains weren’t experienced evenly.

Companies with less than $50M in net revenue generally suffered, with a 5-6% decline at the 50th percentile. Yet even the worst of $50M+ companies saw significant growth  (it’s good to be big).

There is hope though.

Brands of every size saw growth at the 95th percentile.

The macro headwinds are there but some companies are winning

Q1 Revenue Data for Companies In Our Study

2. Wholesale continues to expand

Half of our sample companies do some kind of wholesale business, and across every cohort, revenue in that category is up.

For brands under $50M, wholesale is the fastest-growing revenue category.

This likely would have been true for all cohorts.

But one of the $50M+ companies is crushing so hard on meta ads that, even though wholesale grew significantly, it still represents a smaller percent of overall revenue than Q1 last year.

Overall, revenue in this segment grew ~9-40% across our cohorts, and representing a bigger chunk of the overall revenue pie than it did 2024

Q1 Wholesale data for companies in our study

3. Gross margin was about even

We didn’t observe significant changes in gross margin.

The slight decline in companies under $50M happens to correlate with growth in their Wholesale revenue. So, not necessarily cause for alarm.

But worth calling out is that there are very few companies in the 8- to 9-figure range that don’t have at least 70% margins.

I would argue it’s a defining characteristic of brands that get to that size.

Also, the spread between best- and worst-performers in our under $10M cohort is much broader, with more than 30 percentage points between 5th and 95th percentiles.

Q1 gross margin data for companies in our study

4. Contribution Margin Was Up

We were surprised to see contribution margin was up for many companies, despite revenue down.

As we’ve said again and again (and as the data below supports), you should be targeting a baseline CM of at least 30% – with some exceptions for dropshippers and high volume/commodity resellers.

Brands under $10M saw a decline in contribution margin, which makes sense when you see that the two key drivers – gross margin and ROAS – were also down.

Among $10-$50M brands, CM is up, even though gross margin was flat and ROAS was down. That could be due to things like:

  • Change in channel mix
  • Pick / pack / ship efficiency – cheaper to ship wholesale orders in bulk than individual DTC orders (though this would be relatively minimal)
  • Investing in non-variable marketing, and it’s paying off

Q1 Contribution margin data for companies in our study

5. EBITDA was a mixed bag

Only half of our sample companies saw EBITDA percentage grow in Q1.

Not surprising. First quarter is typically the worst, with tons of post-holiday returns, an inventory squeeze, etc.

But the averages hide an important truth – some grew EBITDA a lot, despite headwinds.

Two brands from our sample were up more than 200% YoY.

One, a 7-figure brand, went from -$70k in EBITDA to +$70k (finally becoming profitable), and the other, an 8-figure brand, went from ~$130k in EBITDA to $400k+.

This reinforces a main takeaway from this report – great companies are finding ways to grow.

Q1 EDBITDA data for companies in our study

For Even More…

Check out the full report for all this, plus more data, insights, and CFO perspective on things like…

  • Price, volume, mix trends for Q1
  • Gross margin discipline and how it’s paying off
  • Client anecdotes (like the brand that cut ad spend to $0 while growing revenue)
  • And more…

And if you have an audience of ecom founders, and you’d like us to come do a detailed breakdown for them (e.g., blog post, podcast interview, newsletter write-up, etc.) hit reply and let me know.

The cover of our Q1 P&L Benchmark Report

-Sam

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SEE HOW YOUR BRAND STACKS UP

We invested hundreds of hours analyzing the books at private 7- to 9-figure ecom brands. 

Then we took everything we learned – revenue trends, contribution margin, EBITDA, ad-spend, ROAS, and more – and put it all in this 40+ page report.

Use it to rate your brand's performance, and gut-check your growth plan for 2025.