By M. Marin
NASDAQ: SNES
READ THE FULL SNES RESEARCH REPORT
Believe 2Q26 illustrates strong momentum on benefits of growth initiatives
SenesTech, Inc. (NASDAQ: SNES), a leader in rodent birth control solutions with patented products that provide proven long-term and sustainable rodent population management, reported record 1H26 revenue, which we believe illustrates the strong momentum in the business on benefits of its growth initiatives. Management remains focused on maintaining strong gross margins and disciplined cost controls toward attaining profitability and cash flow generation.
Management has transformed the company over the past year using a disciplined strategy designed to build long-term sustainable growth. The initial step was to strengthen its direct-to-consumer (DTC) business, including bringing the Amazon and Shopify operations under its direct control. SenesTech believes that strengthening its control of the customer channel improves its ability to capture more value and retain a greater portion of e-commerce economics as adoption of its growing product line expands. SNES has also redesigned the e-commerce section of SenesTech.com in order to improve the customer experience, simplify navigation, boost conversion rates, and support subscription growth, as well as refreshed its packaging to improve online and shelf visibility and strengthen the consumer understanding of what differentiates its product line.
The company believes its three growth priorities – 1) using e-commerce to build the Evolve and ContraPest brands, establish the category, and create a growing recurring revenue base, 2) growing B2B with both brands through a professional sales organization focused on targeted vertical markets, and 3) expanding the addressable market opportunity through new products, new services, and other initiatives – reinforce one another.
Substantial revenue & gross margin improvements align with key objective to develop clear path to profitability, growing revenues while concurrently lowering cash burn
Developing a clear path to profitability and growing revenues while concurrently lowering cash burn is a key company objective. The company’s strategy is to build a commercial model around direct consumer relationships, recurring revenue, greater control of brands and channels, and data analytics. Reflecting record levels of order count and subscription revenue as the subscriber base continues to grow, plus accelerating adoption of Evolve®, 2Q26 revenue advanced 56% quarter-over-quarter to a record $770k, compared to $493k in 1Q26, and 23% year-over-year compared to $625k in 2Q25. A greater than 3-fold increase in e-commerce revenue across online DTC and online B2B channels was a core revenue driver. E-commerce revenue came in at a record $511k in 2Q26, up 186% compared to $179k in 1Q26 and +206% compared to $167k in 2Q25. It was the first full quarter of in-house Amazon management, with SNES control over advertising, pricing, and channel economics, and Amazon revenue increased more than fivefold to a record $349k sequentially, up from $61k in 1Q026.
Record subscriber growth illustrated the ongoing expansion of the company's e-commerce strategy across both online DTC and B2B channels. Management expects e-commerce to play an important role in supporting future direct B2B growth. E-commerce revenue exceeded direct B2B revenue for the first time ever for SenesTech, reflecting the continued expansion of the online business. June was the strongest e-commerce month ever for the company, with e-commerce revenue of $206k, including Amazon revenue of $148k.
Combined subscriber count across Amazon and the SenesTech e-commerce website increased 117% to a record level at quarter end, which strengthens the recurring revenue base and increases revenue visibility. The Amazon channel was managed by a third party prior to February 2026. Revenue from the company's e-commerce website increased 31% quarter-over-quarter to $155k in 2Q26. DTC subscription revenue increased 89% to a record $104k and 142% year-over-year. The company believes these results demonstrate the benefits of the strategic decision to manage Amazon directly and the scalability of its broader e-commerce strategy. Subsequent to the end of the quarter, July e-commerce revenues reached a record $245k, up 19% from $206k in June, and subscription revenue reached a record $52k, up 22% sequentially.
Gross profit increased 68% quarter-over-quarter and 39% year-over-year, and the gross margin increased to a company-record 73.6% in 2Q26, compared to 68.5% in 1Q26 and 65.5% in 2Q25, reflecting improved channel mix, stronger direct-channel economics, and continued strength in the e-commerce business and a disciplined approach to costs. SNES reported a 2Q26 net loss of $1.8 million or ($0.35)/share, compared to $2.1 million ($0.87) in 1Q26.
SNES is enhancing promotional support & is optimistic about the traction it is seeing thus far
The changes management implemented have enabled SenesTech to boost awareness of the Evolve™ brand and educate the market, which is important as rodent fertility control represents a new pest management category. Controlling customer channels is also expected to help SNES establish credibility for its products towards the goal of generating recurring subscription revenue and gaining valuable customer insights that could inform marketing, product development, inventory planning, and commercial initiatives in the future.
SenesTech is optimistic about the traction it is seeing with its DTC and subscription measures. With a product portfolio expected to appeal to the consumer, professional, corporate, and government market segments, the company believes its recent initiatives support consumer revenue growth and also lay the groundwork for B2B (business-to-business) growth, which is a core goal for SenesTech. SNES’s investments in new initiatives and in digital marketing and building its brands are designed to support product adoption across targeted B2B verticals (see below).
With a growing portfolio of products and services, SNES believes the market opportunity for its products is significant and growing. SNES has hired a new Director of Marketing and believes it is well positioned to expand its digital marketing efforts this month, strengthening the platform to attract new customers, improve conversion rates and support long-term e-commerce growth to drive revenue growth. The enhanced promotional support is expected to boost awareness of SenesTech products and support both online and in-store retail sales. To best reflect its current commercial strategy across both consumer and B2B markets, the company’s strategy regarding marketing is to place greater emphasis on:
- Sustainable rodent management
- Environmentally responsible solutions
- Long-term population management
- Integrated Pest Management (IPM)
- Effective, science-based alternatives that complement existing pest management programs
SNES’s B2B strategy encompasses increased focus on large-scale opportunities across targeted verticals as SNES now begins to accelerate the expansion of its B2B business through a professional sales organization focused on the eight key verticals where it believes Evolve™ and ContraPest® provide differentiated value. Management views the relationship between DTC and B2B as two connected important elements of its growth strategy and believes its initiatives and increased focus on large-scale B2B opportunities across targeted verticals strengthen its opportunity to grow across these sectors and also to grow its subscriber base and recurring revenue, which are also key objectives.
Strategic assessment services initiative to improve B2B customers’ understanding of infestations
SNES also expects to build an expanding database around successful deployments of its products and that, in turn, will enable the company to perform data analytics and support the launch of new strategic services. The company has expanded its offerings to include professional rodent population assessment services using trained field personnel, tracking technologies, and AI-supported analysis to better understand rodent activity and measure treatment effectiveness.
The company recently introduced assessment services designed to help B2B customers better understand the scope of rodent infestations and develop more effective long-term strategies. The new assessment services enable SNES to offer a more comprehensive solution and complement existing implementation and deployment services. SenesTech can help customers identify the most effective strategy for their situations, particularly as many organizations underestimate the scope and complexity of the problem.
By building a broad offering platform, SNES expects to position SenesTech as a trusted partner in rodent population management and develop additional recurring revenue opportunities. The company expects customers eventually to engage SenesTech for implementation services that include deployment planning, product placement recommendations, ongoing monitoring, and optimization.
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