Summary of Zevia Conference Call Company Overview - **Company**: Zevia - **Industry**: Beverage, specifically better-for-you soda segment Key Points and Arguments Industry Dynamics - **Consumer Trends**: There is a permanent global shift away from sugar and artificial ingredients, which is driving growth in the better-for-you beverage segment [4][11][12] - **Market Position**: Zevia is positioned as a leader in the zero-sugar soda market, appealing to consumers seeking healthier options [4][7][12] Company Performance - **Growth in Distribution**: Zevia has made significant progress in distribution and innovation, with a focus on increasing household penetration from 5% to potentially 20% [12][13][39] - **Affordability**: Zevia is priced slightly above mainstream sodas but significantly lower than other better-for-you brands, making it accessible to a broader consumer base [14][19] Product Innovation - **Flavor Development**: Zevia is expanding its flavor portfolio, focusing on both classic and new fruity flavors, informed by market trends and consumer preferences [20][21] - **Taste Improvement**: Recent innovations have led to a more sugar-like taste experience, enhancing the appeal of Zevia products [25][26] Marketing Strategy - **Emotional Branding**: Future marketing efforts will focus on emotional connections rather than just rational benefits, emphasizing the brand's authenticity [9][28] - **Packaging Refresh**: A new packaging design has received positive feedback, with a reported 60% increase in purchase intent compared to the old design [29][30][32] Financial Considerations - **Cost Management**: Zevia has identified $20 million in productivity savings, with $15 million realized by the end of the year, aimed at offsetting costs from aluminum tariffs [17][61] - **Gross Margin Recovery**: The company expects to rebuild gross margins through cost savings and pricing strategies, targeting a return to upper 40s to low 50s percentage range [61][62] Future Outlook - **2026 Goals**: Zevia aims to demonstrate profitability in 2026, supported by expanded distribution, effective marketing, and improved product offerings [73][75] - **Macro Concerns**: While optimistic about growth, there are concerns regarding the macroeconomic environment and its potential impact on consumer behavior [74][75] Additional Important Insights - **Household Penetration**: Zevia's current household penetration is at 5%, with significant room for growth through enhanced marketing and distribution strategies [12][39] - **Consumer Engagement**: The company is focusing on increasing trial through singles distribution, which is crucial for attracting new customers [38][47] - **DSD Partnerships**: Direct Store Delivery (DSD) partnerships are being leveraged to improve merchandising and expand distribution in key markets [53][54][56] This summary encapsulates the key insights from the Zevia conference call, highlighting the company's strategic positioning, market dynamics, and future growth potential.

Core Insights - Zevia PBC, a company known for its naturally delicious, zero sugar beverages, will participate in the Stephens Annual Investment Conference on November 18, 2025 [1] Company Participation - Amy Taylor, President and CEO, and Girish Satya, CFO, will represent the company at the conference [1] - The event will take place at The Grand Hyatt in Nashville, Tennessee [1] - Management will engage with investors and deliver a presentation during the conference [1]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Zevia reported a quarterly loss of $0.04 per share, better than the Zacks Consensus Estimate of a loss of $0.06, representing an earnings surprise of +33.33% [1] - The company achieved revenues of $40.84 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.80% and up from $36.37 million year-over-year [2] - Zevia's stock has underperformed, losing about 44.9% since the beginning of the year compared to the S&P 500's gain of 15.1% [3] Financial Performance - Over the last four quarters, Zevia has surpassed consensus EPS estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.03 on revenues of $39.07 million, and for the current fiscal year, it is -$0.15 on revenues of $160.95 million [7] Industry Context - The Beverages - Soft drinks industry, to which Zevia belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Zevia's stock performance [5] Future Outlook - The sustainability of Zevia's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for Zevia was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

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]