Financial Data and Key Metrics Changes - Net sales in Q3 2025 increased by 12% to $40.8 million compared to the prior year [4][13] - Adjusted EBITDA loss was $1.7 million, slightly worse than the adjusted EBITDA loss of $1.5 million in the prior year [16][17] - Gross margin decreased to 45.6%, down 350 basis points from 49.1% in Q3 2024, primarily due to inventory obsolescence and aluminum tariffs [14][17] - The company raised its full-year net sales guidance to a range of $162 million to $164 million, up from the previous guidance of $158 million to $163 million [17] Business Line Data and Key Metrics Changes - The company reported strong performance from new product launches, including Strawberry Lemon Burst and Peaches and Cream, which contributed to brand momentum [8][9] - Marketing expenses increased to $4.9 million, or 12.1% of net sales, compared to $3.5 million, or 9.7% of net sales in Q3 2024, reflecting increased investments in brand marketing [16] Market Data and Key Metrics Changes - The company noted an increase in household penetration, now over 5%, driven by new consumers, particularly higher-income millennials with children [27][28] - The natural soda category is operating around 20% household penetration, indicating significant growth potential for the company [28] Company Strategy and Development Direction - The company is focusing on three strategic growth pillars: high-impact brand marketing, accelerated product innovation, and expanded distribution [4][12] - The expansion into Walmart's Canadian stores is seen as a positive indicator for future growth opportunities [21] - The company plans to roll out new packaging across its legacy flavors in early 2026, which is expected to enhance brand visibility and consumer engagement [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's ability to capitalize on the shift towards better-for-you products, with strong consumer engagement and brand consideration [5][12] - The company anticipates a positive adjusted EBITDA in 2026, despite ongoing challenges such as aluminum tariffs [43] Other Important Information - The company ended the quarter with approximately $26 million in cash and cash equivalents and an undrawn revolving credit line of $20 million [17] - The company is committed to investing in customer acquisition while managing costs effectively to achieve profitability [43] Q&A Session Summary Question: Expansion with Walmart in Canada - Management confirmed that the expansion into over 400 Walmart stores in Canada is a positive indicator but not the primary driver of the raised sales outlook [21] Question: New Packaging Distribution - The new packaging is expected to be rolled out to the entire portfolio by early 2026, with initial positive indicators from consumer research [24] Question: Household Penetration and Market Opportunity - Management highlighted that new consumers, particularly millennials, are driving household penetration growth, with significant room for expansion in the better-for-you category [27][28] Question: Energy Drinks Category - Management acknowledged the potential in the energy drinks category but emphasized the current focus on soda, with plans to explore energy drinks in the future [30][31] Question: Brand Awareness and Marketing Impact - Management reported double-digit increases in purchase intent and consideration, indicating effective marketing strategies [33] Question: Seasonality and Revenue Guidance - Management noted that distribution gains and regional rotations are contributing to a less pronounced seasonal decline in Q4 compared to previous years [36] Question: Shelf Space Expectations - Management discussed ongoing improvements in shelf space at Walmart and other retailers, with a focus on driving velocity and expanding distribution [40][41] Question: Profitability Outlook - Management is optimistic about achieving positive adjusted EBITDA in 2026, balancing investments in growth with cost management [43]

Financial Performance - Net sales for Q3 2025 increased by 123% year-over-year, reaching $408 million[16] - Gross margin for Q3 2025 was 456%, a decrease of 350 basis points compared to the previous year[16] - The net loss for Q3 2025 was $28 million, remaining flat compared to the previous year[16] - Adjusted EBITDA loss for Q3 2025 was $17 million, an increase of $02 million compared to the previous year[16] - Year-to-date net sales reached $1234 million, a 67% increase compared to the previous year[16] - Year-to-date gross margin was 481%, a 270 basis point increase compared to the previous year[16] - Year-to-date Adjusted EBITDA loss was $48 million, an improvement of $65 million compared to the previous year[16] Consumer Metrics - Household penetration increased from 49% to 52%[18] - Dollar sales per household increased from $3728 to $3967[18] - Purchase frequency increased from 36x to 37x[18] - Dollar sales per trip increased from $1034 to $1065[18] Strategic Initiatives - The company aims to capitalize on the $270 billion liquid refreshment beverages market within the "better-for-you" soda segment[9]

Financial Performance - Net sales for the three months ended September 30, 2025, were $40.844 million, an increase of 12.1% compared to $36.366 million for the same period in 2024[117] - Gross profit for the nine months ended September 30, 2025, was $59.342 million, up from $52.511 million in 2024, reflecting a gross margin improvement[117] - Net sales for the three months ended September 30, 2025, were $40.8 million, a 12.3% increase from $36.4 million in the same period of 2024, driven by a 12.6% increase in equivalized cases sold[119] - Net sales for the nine months ended September 30, 2025, were $123.4 million, a 6.7% increase from $115.6 million in 2024, attributed to expanded distribution and pricing increases[131] Expenses and Cost Management - Selling and marketing expenses for the three months ended September 30, 2025, were $12.665 million, compared to $11.981 million in 2024, indicating increased investment in promotional activities[117] - General and administrative expenses for the nine months ended September 30, 2025, were $22.733 million, slightly down from $23.186 million in 2024, indicating cost management efforts[117] - Cost of goods sold for the nine months ended September 30, 2025, was $64.0 million, a 1.5% increase from $63.1 million in 2024, with favorable unit costs partially offsetting higher volumes[132] - Selling and marketing expenses for the nine months ended September 30, 2025, were $41.4 million, an increase of $0.7 million or 1.7% compared to $40.7 million in the same period of 2024[135] - General and administrative expenses increased by 4.0% to $7.7 million for the three months ended September 30, 2025, driven by higher variable compensation[127] Profitability and Loss - The company experienced a net loss attributable to Zevia PBC of $2.686 million for the three months ended September 30, 2025, compared to a net loss of $2.527 million in 2024[117] - The net loss for the nine months ended September 30, 2025, was $(9,870) thousand, compared to $(17,002) thousand for the same period in 2024[171] - Adjusted EBITDA for the three months ended September 30, 2025, was $(1,721) thousand, compared to $(1,508) thousand for the same period in 2024[171] Strategic Initiatives - The Productivity Initiative is expected to yield annualized benefits of approximately $20.0 million, with savings being reinvested into brand marketing and promotional activities[95] - Restructuring charges related to the Productivity Initiative were completed as of September 30, 2025, with no additional costs incurred in the third quarter of 2025[93] - The company anticipates continued growth driven by new distribution, increased organic sales, and product innovation, despite potential challenges from seasonality and competition[100] Cash Flow and Liquidity - As of September 30, 2025, the company had $26.0 million in cash and cash equivalents, which, along with operating activities and available borrowings, is expected to provide adequate liquidity for ongoing operations[144] - Net cash used in operating activities was $4.2 million for the nine months ended September 30, 2025, primarily driven by a net loss of $9.9 million, partially offset by non-cash expenses and changes in operating assets and liabilities[162] - The company had no outstanding amount on its Secured Revolving Line of Credit as of September 30, 2025, which has a borrowing capacity of up to $20 million[156] Market and Economic Conditions - The company has increased pricing on several products in response to widespread inflation, which may impact future sales volume[96] - Inflation has had a material effect on the company's business, and further significant inflationary pressures could harm financial condition[186] - The implementation of an import tax on aluminum has increased operating costs, with expectations of continued increases in cost of goods sold[182] - The company is subject to commodity risks related to purchases of aluminum, diesel fuel, cartons, and corrugate[187] Supply Chain and Operations - The company has approved sourcing from a second multi-national ingredient company for stevia leaf extract to diversify supply and mitigate price disruptions[181] - The company entered into a lease amendment extending the lease term through December 31, 2026, and expanding the total square footage from 17,923 square feet to 20,185 square feet[172]

Financial Performance - Net sales increased by 12.3% to $40.8 million in Q3 2025, up from $36.4 million in Q3 2024, driven by a volume growth of 12.6%[3] - The net loss for Q3 2025 was $2.8 million, consistent with the net loss of $2.8 million in Q3 2024, with a loss per share of $0.04[11] - Adjusted EBITDA loss was $1.7 million in Q3 2025, compared to a loss of $1.5 million in Q3 2024, reflecting ongoing operational challenges[12] - The company expects full-year 2025 net sales to be between $162 million and $164 million, with an adjusted EBITDA loss projected between $5.0 million and $5.5 million[14] - For Q4 2025, net sales are anticipated to range from $39.0 million to $41.0 million, with an adjusted EBITDA loss expected between $0.25 million and $0.75 million[15] - Net loss for the nine months ended September 30, 2025, was $9,870 million, an improvement from a net loss of $17,002 million for the same period in 2024, indicating a reduction of approximately 42.5%[27] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(4,754) million, compared to $(11,348) million for the same period in 2024, reflecting an improvement of approximately 58%[32] Cost and Expenses - Gross profit margin decreased to 45.6%, down 3.5 percentage points from 49.1% in Q3 2024, primarily due to higher inventory losses and increased tariffs[4] - Selling and marketing expenses were $12.7 million, representing 31.0% of net sales, compared to $12.0 million or 33.0% in Q3 2024, indicating improved cost efficiency[5] - The increase in marketing expenses was driven by investments aimed at enhancing brand awareness[8] - Equity-based compensation for the nine months ended September 30, 2025, was $2,663 million, down from $3,950 million in the same period of 2024, a decrease of approximately 32.5%[27] Assets and Liabilities - Total assets decreased from $67,951 million as of December 31, 2024, to $60,009 million as of September 30, 2025, representing a decline of approximately 11.5%[25] - Cash and cash equivalents decreased from $32,688 million at the end of the previous period to $26,029 million at the end of the current period, a decline of approximately 20.2%[27] - Total current liabilities slightly decreased from $24,222 million as of December 31, 2024, to $23,967 million as of September 30, 2025, a reduction of about 1.1%[25] - Inventories decreased from $18,618 million as of December 31, 2024, to $14,128 million as of September 30, 2025, a decline of approximately 24.1%[25] - Total stockholders' equity decreased from $64,879 million as of December 31, 2024, to $51,250 million as of September 30, 2025, a decline of approximately 21%[25] Cash Flow - The company had a cash outflow of $(226) million in investing activities for the nine months ended September 30, 2025, consistent with $(238) million for the same period in 2024[27] - The company reported a net cash used in operating activities of $(4,196) million for the nine months ended September 30, 2025, compared to a net cash provided of $971 million for the same period in 2024[27] Future Outlook - The company is focused on achieving profitability in 2026 through strategic growth initiatives and operational excellence[2] - As of September 30, 2025, the company had $26.0 million in cash and cash equivalents, no outstanding debt, and an unused credit line of $20 million[13]

Core Insights - Zevia PBC (NYSE: ZVIA) is a small beverage company capitalizing on the consumer trend of reducing sugar intake, although it is not yet profitable [1] Company Overview - Zevia focuses on producing beverages that cater to the growing demand for sugar-free options, aligning with health-conscious consumer preferences [1] Financial Performance - The company has not achieved profitability yet, indicating potential challenges in its business model or market competition [1]

Core Insights - Zevia PBC (NYSE: ZVIA) is a small beverage company capitalizing on the consumer trend of reducing sugar intake, although it is currently not profitable [1] Company Overview - Zevia focuses on producing beverages that cater to the growing demand for sugar-free options, aligning with health-conscious consumer preferences [1] Financial Performance - The company has not yet achieved profitability, indicating potential challenges in its business model or market competition [1]

Industry Overview - The Zacks Beverages – Soft Drinks industry is facing challenges due to rising costs, tariff uncertainty, and supply-chain disruptions, which are negatively impacting margins and profitability [1][5][9] - The industry is currently ranked 184 out of over 250 Zacks industries, placing it in the bottom 25% and indicating dull near-term prospects [9][10][11] - The industry has underperformed compared to the Consumer Staples sector and the S&P 500 Index, with a collective loss of 8.6% over the past year [12] Consumer Trends - There is a growing demand for healthier beverages with natural ingredients, reduced sugar, and functional benefits, leading companies to pivot away from sugary sodas [2][6] - Plant-based beverages and functional drinks that promote hydration, energy, and mood support are gaining traction among health-conscious consumers [6] Digital Transformation and Innovation - The industry is leveraging digital transformation to enhance consumer engagement and capture evolving demand through investments in e-commerce and subscription models [3][7][8] - Companies are optimizing fulfillment strategies and expanding digital offerings to boost customer loyalty and secure recurring revenues [7][8] Company Performance - PepsiCo is expected to benefit from its strong global beverage and convenience food businesses, with a focus on cost-management and revenue-management initiatives amid inflationary pressures [19][20] - Zevia, focused on zero-sugar, naturally sweetened drinks, has seen a stock increase of 166.7% in the past year, with strong growth estimates for sales and earnings [23][24] - Coca-Cola is positioned for long-term growth through strategic transformation and digital investments, with a focus on the rapidly growing RTD category [27][28] - Monster Beverage continues to perform well in the energy drinks category, with a stock increase of 28.2% in the past year and positive growth estimates [30][31] - Keurig Dr Pepper is benefiting from momentum in the Refreshment Beverages segment, with growth estimates for sales and earnings, despite a stock decline of 22.4% in the past year [34][35]

Zevia PBC (ZVIA) FY Conference Summary Company Overview - **Company Name**: Zevia PBC (ZVIA) - **Industry**: Beverage, specifically the better-for-you soda category - **Founded**: February 2008 by a husband and wife concerned about harmful additives in traditional sodas [3][4] Core Business Insights - **Market Position**: Positioned at the intersection of health and taste, with a focus on zero sugar, zero calories, and no artificial ingredients [4][6] - **Consumer Loyalty**: Strong consumer loyalty with repeat purchase rates; household penetration is only 5.1%, indicating significant growth potential [5][31] - **Distribution**: Over 37,000 distribution points, with plans for expansion in grocery, club, and mass channels [13][27] Financial Performance - **Recent Growth**: Achieved 10% top-line growth compared to Q2 last year and reached positive adjusted EBITDA for the first time as a public company [15][31] - **Cost Savings**: Identified $20 million in cost savings, with $15 million expected to be realized by year-end [30] Market Trends - **Consumer Preferences**: Shift towards reducing sugar intake and a focus on natural, high-quality ingredients; better-for-you soda is growing at five times the rate of conventional soda [16][17] - **Market Size**: The total carbonated soft drink market is valued at $57 billion, with better-for-you soda driving growth [17] Marketing and Brand Strategy - **Marketing Spend**: Increased marketing budget from 6% to 12% of revenue, focusing on brand awareness and engagement [34][19] - **Recent Campaign**: National ad campaign featuring artist Jelly Roll generated 2.4 billion positive media impressions [20][19] - **Brand Positioning**: Emphasizes authenticity and accessibility, aiming to appeal to a broad demographic [6][8] Product Innovation - **Product Line**: Focus on nostalgic flavors and a nascent energy drink line; recent successful launches include Strawberry Lemon Burst and Orange Creamsicle [11][22] - **Taste Profile Improvement**: Enhanced stevia blend to minimize aftertaste, leading to positive consumer feedback [24][52] - **Limited Time Offerings (LTOs)**: Seasonal flavors like Salted Caramel have driven excitement and engagement [23] Distribution Expansion - **Retail Partnerships**: Recently expanded presence in retailers like Walgreens and Costco; significant opportunities in convenience and foodservice channels [28][29] - **Modern Soda Sets**: Retailers are increasingly adopting modern soda sets, creating favorable conditions for Zevia's growth [28][41] Profitability Goals - **Path to Profitability**: Aiming for accelerated growth and profitability by 2026, leveraging marketing, product innovation, and distribution strategies [31][30] Additional Insights - **Consumer Demographics**: Better-for-you soda shoppers tend to be younger, more affluent, and health-conscious, willing to pay a premium for healthier options [17][18] - **Competitive Pricing**: Priced at a slight premium to traditional sodas but significantly lower than other better-for-you brands, maintaining accessibility [36][37] Conclusion - **Future Outlook**: Zevia is well-positioned in a high-growth category with a distinct market position, strong consumer loyalty, and multiple growth levers to drive profitable growth [31][31]

Core Viewpoint - Zevia reported a quarterly loss of $0.01 per share, outperforming the Zacks Consensus Estimate of a loss of $0.05, marking an earnings surprise of +80.00% [1] - The company has shown consistent revenue growth, with Q2 2025 revenues of $44.52 million, exceeding the Zacks Consensus Estimate by 7.26% [2] Financial Performance - Over the last four quarters, Zevia has surpassed consensus EPS estimates three times [2] - The company reported a revenue increase from $40.43 million in the same quarter last year to $44.52 million this year [2] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $41.13 million, and for the current fiscal year, it is -$0.17 on revenues of $160.92 million [7] Market Position - Zevia shares have declined approximately 21.7% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The Zacks Industry Rank for Beverages - Soft drinks places it in the top 41% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of Zevia's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for Zevia was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Financial Data and Key Metrics Changes - For the second quarter, net sales grew by 10.1% to $44.5 million, marking a significant increase compared to the previous year [7][18] - Adjusted EBITDA improved by $4.6 million to $200,000, representing the first profitable quarter since going public [21] - Gross margin increased to 48.7%, up from 41.9% in the same quarter last year, reflecting lower product costs and improved inventory management [18][19] - Net loss was reduced to $700,000 from $7 million in the prior year, showing a substantial improvement [20] Business Line Data and Key Metrics Changes - The marketing campaign "Get the Fake Out of Here" contributed to double-digit growth, with notable engagement and impressions [8] - New flavor launches, particularly strawberry lemon burst and orange creamsicle, have driven excitement and sales velocities [9][10] - Distribution surpassed historical peak levels, with strong performance in key retail accounts [11][12] Market Data and Key Metrics Changes - Strong performance was noted at Walmart, with the first variety pack being the top-selling SKU [12] - Positive scan data in the grocery channel indicated strong performance across key retailers [12] - In the club channel, Zevia returned to rotation in key Costco regions, exceeding expectations [13] Company Strategy and Development Direction - The company is focused on three strategic growth pillars: marketing, product innovation, and distribution [5][14] - Continued emphasis on expanding distribution and enhancing brand visibility through innovative marketing strategies [6][14] - The company aims to capitalize on the growing "better for you" soda category, positioning itself for long-term profitable growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism due to an uncertain macro environment but remains focused on executing strategic initiatives [22] - The outlook for full-year net sales is maintained at $158 million to $163 million, with adjusted EBITDA loss expected to range from $7 million to $9 million [22][23] - Management highlighted the importance of balancing short-term marketing investments with long-term brand building [56] Other Important Information - The company identified an additional $5 million in cost savings expected to be realized in 2026, bringing total anticipated savings to $20 million [17] - A one-time charge of $500,000 related to packaging redesign will impact Q3 adjusted EBITDA [23] Q&A Session Summary Question: What drove the strong sales in the quarter? - Management noted balanced growth from new distribution at Walmart and positive momentum in grocery channels, with new items contributing to incremental distribution [25][28] Question: Can you elaborate on the productivity initiative and the $5 million in gains? - Management indicated that efficiencies are being found within the supply chain and product portfolio simplification, with savings expected to begin in Q4 of this year [31][32] Question: What is the outlook for Q4 given the current guidance? - Management expressed caution due to a substantial Walmart pipeline fill in the previous year, which may lead to flat growth in Q4 [35][38] Question: How should tariffs be considered moving forward? - Management confirmed an estimated 200 basis point impact on gross margins due to tariffs, with more material impacts expected starting in Q3 [39][42] Question: What factors contributed to the increase in household penetration and purchase frequency? - Increased visibility in the marketplace and successful new flavor launches were cited as key contributors to the uptick in consumer metrics [45][46] Question: How is the company balancing improved EBITDA with marketing reinvestment? - Management emphasized the importance of both long-term brand building and short-term velocity driving tactics, aiming for sustainable growth [54][56]