Revenue fell 21% year on year to $7.5 million from $9.5 million, missing the analyst consensus estimate of $9.62 million. Gross margin improves sharplyDespite weaker sales, Reed's delivered a substantial improvement in gross margin, which increased to 24% from 8% in the corresponding period last year. Operating cash use improvesCash used in operating activities declined to $2.2 million from $5.0 million in the corresponding period last year, providing another indication of improving cost control. Reed's held $2.4 million in cash as of June 30, 2026, down from $10.4 million at the end of 2025. The positive premarket reaction suggested investors were placing greater emphasis on stronger margins, reduced expenses and improving cash usage than on the weaker-than-expected quarterly revenue and earnings figures.