Zevia(ZVIA) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Highlights Zevia announced strong Q2 2025 results, exceeding net sales and Adjusted EBITDA guidance, driven by significant volume growth and improved profitability Key Financial Highlights | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change YoY (USD) | Change YoY (%) | | :-------------------- | :------------ | :------------ | :--------------- | :------------- | | Net Sales | $44.5 million | $40.4 million | +$4.1 million | +10.1% | | Gross Profit Margin | 48.7% | 41.9% | +6.8 percentage points | | | Net Loss | $0.7 million | $7.0 million | -$6.3 million | -90.0% | | Loss per Share | $0.01 | $0.10 | -$0.09 | -90.0% | | Adjusted EBITDA | $0.2 million | -$4.4 million | +$4.6 million | | - Volume growth of 14.3% contributed to the net sales increase[1][3] CEO Commentary The CEO expressed satisfaction with Q2 performance, highlighting successful execution of strategic growth pillars, including brand sharpening, foundation strengthening, and accelerated growth through marketing, innovation, and distribution expansion - Strategic growth pillars advanced: sharpen the Zevia brand, strengthen the foundation, and accelerate growth[2] - Growth drivers include distinctive marketing, resonating product innovation, and distribution building beyond historical peak levels with strong sell-through[2] Second Quarter 2025 Financial Results Net Sales Net sales improved by 10.1% year-over-year, reaching $44.5 million, primarily due to higher volumes from expanded distribution and improved price realization Net Sales Performance | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change YoY (USD) | Change YoY (%) | | :-------- | :------------ | :------------ | :--------------- | :------------- | | Net Sales | $44.5 million | $40.4 million | +$4.1 million | +10.1% | - The increase was driven by improved volumes of 14.3%, largely from expanded distribution at Walmart and a drug channel customer, and higher price realization, partially offset by increased promotional activity[3] Gross Profit Gross profit margin significantly improved by 6.8 percentage points to 48.7%, driven by lower product costs and better inventory management Gross Profit Margin | Metric | Q2 2025 | Q2 2024 | Change YoY | | :---------------- | :------ | :------ | :--------- | | Gross Profit Margin | 48.7% | 41.9% | +6.8 percentage points | - The improvement was primarily due to lower product costs and improved inventory management, partially offset by higher promotional activity and channel mix[4] Operating Expenses Total operating expenses decreased year-over-year, primarily due to reductions in selling and restructuring expenses, despite an increase in marketing and general and administrative costs Selling and Marketing Expenses Selling expenses decreased due to productivity initiatives, while marketing expenses increased to drive brand awareness, funded by the selling expense savings Selling and Marketing Expense Breakdown | Expense Category | Q2 2025 (USD) | % of Net Sales (Q2 2025) | Q2 2024 (USD) | % of Net Sales (Q2 2024) | Change (USD) | Change (%) | | :-------------------- | :------------ | :----------------------- | :------------ | :----------------------- | :----------- | :--------- | | Selling and Marketing | $13.4 million | 30.0% | $13.6 million | 33.7% | -$0.2 million | -1.5% | | Selling | $8.7 million | 19.4% | $9.3 million | 23.0% | -$0.6 million | -7.1% | | Marketing | $4.7 million | 10.6% | $4.3 million | 10.7% | +$0.4 million | +9.6% | - The decrease in selling expenses was primarily due to savings in freight and warehousing costs as a result of the Productivity Initiative[8] - The increase in marketing expenses was driven by investments made to drive brand awareness, funded by the savings in direct selling expenses[8] General and Administrative Expenses General and administrative expenses saw a slight increase, mainly due to higher compensation and outside services, partially offset by reduced headcount General and Administrative Expenses | Metric | Q2 2025 (USD) | % of Net Sales (Q2 2025) | Q2 2024 (USD) | % of Net Sales (Q2 2024) | Change (USD) | | :-------------------------- | :------------ | :----------------------- | :------------ | :----------------------- | :----------- | | General and Administrative | $8.1 million | 18.2% | $7.7 million | 19.0% | +$0.4 million | - The increase was primarily driven by higher compensation expense resulting from accrued bonuses as well as higher use of outside services, partially offset by lower headcount[9] Equity-based Compensation and Restructuring Equity-based compensation decreased due to the accelerated recognition method for IPO awards, and restructuring expenses were significantly lower compared to the prior year Equity-based Compensation and Restructuring Expenses | Expense Category | Q2 2025 (USD) | Q2 2024 (USD) | Change (USD) | | :----------------------- | :------------ | :------------ | :---------- | | Equity-based Compensation | $1.0 million | $1.4 million | -$0.4 million | | Restructuring | < $0.1 million | $0.9 million | -$0.8 million | - The decrease in equity-based compensation was largely due to the accelerated method of expense recognition on certain equity awards issued in connection with the Company's IPO in 2021[10] Net Loss and EPS The company significantly reduced its net loss to $0.7 million and improved loss per share to $0.01, primarily driven by higher gross profit and lower selling expenses Net Loss and Earnings Per Share | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Improvement YoY (USD) | | :-------------- | :------------ | :------------ | :-------------------- | | Net Loss | $0.7 million | $7.0 million | $6.3 million | | Loss per Share | $0.01 | $0.10 | $0.09 | - The improvement in net loss was primarily due to higher gross profit and lower selling expenses versus the same period last year[11] Adjusted EBITDA Zevia achieved positive Adjusted EBITDA of $0.2 million in Q2 2025, a substantial improvement of $4.6 million year-over-year from a loss position Adjusted EBITDA Performance | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Improvement YoY (USD) | | :-------------- | :------------ | :------------ | :-------------------- | | Adjusted EBITDA | $0.2 million | -$4.4 million | $4.6 million | Balance Sheet and Cash Flows As of June 30, 2025, Zevia maintained a healthy liquidity position with $26.3 million in cash and cash equivalents, no outstanding debt, and an available credit line Key Liquidity Metrics | Metric | As of June 30, 2025 (USD) | | :------------------------- | :------------------------ | | Cash and Cash Equivalents | $26.3 million | | Outstanding Debt | None | | Unused Credit Line | $20 million | Outlook Full Year 2025 Outlook The company reaffirmed its full-year net sales guidance while improving its Adjusted EBITDA loss expectation, reflecting benefits from cost-savings initiatives despite anticipated tariff impacts Full Year 2025 Guidance | Metric | Full Year 2025 Guidance (USD) | | :------------------ | :---------------------------- | | Net Sales | $158 million to $163 million | | Adjusted EBITDA Loss | $7 million to $9 million | - Adjusted EBITDA outlook reflects continued benefit from cost-savings initiatives and includes the impact of higher costs associated with tariffs, which the Company expects to mitigate[14] Third Quarter 2025 Outlook For Q3 2025, Zevia anticipates net sales between $38.0 million and $40.0 million, with an Adjusted EBITDA loss inclusive of a charge for package redesign Third Quarter 2025 Guidance | Metric | Q3 2025 Guidance (USD) | | :------------------ | :--------------------- | | Net Sales | $38.0 million to $40.0 million | | Adjusted EBITDA Loss | $3.4 million to $3.9 million | - The Adjusted EBITDA loss for Q3 2025 is inclusive of a $500 thousand charge within cost of goods sold related to a package redesign[15] Company Information About Zevia Zevia PBC is a Certified B Corporation offering a broad portfolio of zero sugar, zero calorie, naturally sweetened beverages made with simple, plant-based ingredients, distributed across over 37,000 retail locations in the U.S. and Canada - Zevia PBC is a Delaware public benefit corporation designated as a 'Certified B Corporation,' focused on addressing global health challenges from excess sugar consumption[19] - All Zevia® beverages are zero sugar, zero calorie, naturally sweetened, made with simple, plant-based ingredients, contain no artificial sweeteners, and are Non-GMO Project verified, gluten-free, Kosher, and vegan[19] - Zevia is distributed in more than 37,000 retail locations in the U.S. and Canada through a diverse network of major retailers[19] Investor Relations and Webcast Zevia hosted a conference call and webcast to discuss its Q2 2025 results, with replay information available on its investor relations website - The Company hosted a conference call to discuss its results at 4:30 p.m. Eastern Time on August 6, 2025[17] - Investors can listen to the webcast via the Investor Relations section of Zevia's website, where a replay will also be available[17] Forward-Looking Statements This section provides a disclaimer regarding forward-looking statements, outlining the inherent risks and uncertainties that could cause actual results to differ materially from projections, and states no obligation to update these statements - The press release contains 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995[18] - Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties, including tariffs, brand development, supply chain, consumer preferences, and macroeconomic conditions[18] - The Company does not intend and undertakes no obligation to update any forward-looking statements, except as may be required by applicable law[18] Non-GAAP Financial Measures Explanation and Rationale Zevia uses Adjusted EBITDA as a non-GAAP measure to provide supplemental information on operating performance, facilitate internal comparisons, and aid management in assessing business health and planning, while acknowledging its limitations - Adjusted EBITDA is a non-GAAP financial measure used to provide meaningful supplemental information regarding operating performance and facilitate internal comparisons[25] - Management uses Adjusted EBITDA for assessing business health, determining incentive compensation, evaluating operating performance, and for internal planning and forecasting[25] - Adjusted EBITDA is calculated as net income (loss) adjusted to exclude other income (expense), income taxes, depreciation and amortization, equity-based compensation, and restructuring expenses[26] Reconciliation to GAAP The company provides a reconciliation of net loss (the most directly comparable GAAP measure) to Adjusted EBITDA (non-GAAP) for both the three and six months ended June 30, 2025 and 2024 Adjusted EBITDA Reconciliation | Metric | Three Months Ended June 30, 2025 (USD in thousands) | Three Months Ended June 30, 2024 (USD in thousands) | Six Months Ended June 30, 2025 (USD in thousands) | Six Months Ended June 30, 2024 (USD in thousands) | | :------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Net loss and comprehensive loss | $(651) | $(6,961) | $(7,022) | $(14,160) | | Other income, net | $(382) | $(142) | $(439) | $(239) | | Provision for income taxes | $17 | $34 | $58 | $47 | | Depreciation and amortization | $236 | $403 | $488 | $731 | | Equity-based compensation | $982 | $1,427 | $1,713 | $2,916 | | Restructuring | $31 | $865 | $2,169 | $865 | | Adjusted EBITDA | $233 | $(4,374) | $(3,033) | $(9,840) | Unaudited Financial Statements Consolidated Statements of Operations and Comprehensive Loss Presents the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025 and 2024, detailing revenue, expenses, and net loss Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended June 30, 2025 (USD in thousands) | Three Months Ended June 30, 2024 (USD in thousands) | Six Months Ended June 30, 2025 (USD in thousands) | Six Months Ended June 30, 2024 (USD in thousands) | | :----------------------- | :-------------------------------------------------- | :-------------------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Net sales | $44,524 | $40,426 | $82,547 | $79,225 | | Cost of goods sold | $22,834 | $23,484 | $41,822 | $44,564 | | Gross profit | $21,690 | $16,942 | $40,725 | $34,661 | | Total operating expenses | $22,706 | $24,011 | $48,128 | $49,013 | | Net loss attributable to Zevia PBC | $(697) | $(5,891) | $(5,923) | $(11,715) | Condensed Consolidated Balance Sheets Provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, showing assets, liabilities, and equity Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (USD in thousands) | December 31, 2024 (USD in thousands) | | :--------------- | :------------------------------- | :----------------------------------- | | Total assets | $62,450 | $67,951 | | Total liabilities | $24,755 | $25,006 | | Total equity | $37,695 | $42,945 | Condensed Consolidated Statement of Cash Flows Details the unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, and 2024, categorizing cash flows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows | Metric | Six Months Ended June 30, 2025 (USD in thousands) | Six Months Ended June 30, 2024 (USD in thousands) | | :------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Net cash used in operating activities | $(4,312) | $(2,920) | | Net cash used in investing activities | $(45) | $(93) | | Net cash provided by financing activities | $5 | $0 | | Cash and cash equivalents at end of period | $26,301 | $28,942 |