Q4 & FY 2025 Earnings February 23, 2026 1 Forward Looking Statements & Non-GAAP Measures Forward-looking statements Certain statements in this presentation by Freshpet, Inc. (the "Company") constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations and assumptions. These include statements related to our ability to adapt to the changing environment, strategies to address the current consumer environment, drive ...

Financial Performance - Net sales for Q4 2025 increased by 8.6% to $285.2 million, compared to $262.7 million in the prior year[3] - Full year 2025 net sales reached $1,102.0 million, marking a 13.0% increase from $975.2 million in the previous year[7] - Gross profit for Q4 2025 was $123.5 million, representing 43.3% of net sales, up from 42.5% in the prior year[4] - Full year 2025 net income was $139.1 million, significantly higher than $46.9 million in the prior year, driven by increased sales and a $68.4 million income tax benefit[8] - Income attributable to common stockholders for the year ended December 31, 2025, rose to $139,137, a significant increase from $46,925 in 2024[26] - For the year ended December 31, 2025, net income increased to $139.1 million, compared to $46.9 million in 2024, representing a growth of 196%[34] - Adjusted EBITDA for the year ended December 31, 2025, was $195.7 million, up from $161.8 million in 2024, reflecting a year-over-year increase of 21%[34] Cash Flow and Expenses - The company achieved positive free cash flow of $12.4 million in 2025, a turnaround from a negative $32.8 million in the prior year[5] - Selling, general and administrative expenses (SG&A) for Q4 2025 were $79.0 million, down from $92.2 million in the prior year, improving as a percentage of net sales[6] - SG&A expenses for the year ended December 31, 2025, were $373,954, an increase from $357,957 in 2024[26] - Adjusted SG&A expenses as a percentage of net sales decreased to 29.0% for the year ended December 31, 2025, from 29.9% in 2024[30] - Free cash flow for the year ended December 31, 2025, was $12.4 million, a significant recovery from a negative $32.8 million in 2024[36] - Net cash flows provided by operating activities for the year ended December 31, 2025, were $160.6 million, compared to $154.3 million in 2024, indicating a growth of 4.4%[36] Assets and Liabilities - Total assets as of December 31, 2025, reached $1,777,775, up from $1,574,878 in 2024, marking a 12.9% increase[24] - Total liabilities increased to $569,116 as of December 31, 2025, compared to $519,518 in 2024, reflecting a 9.5% rise[24] - Cash and cash equivalents at the end of the period were $277,975, slightly up from $268,633 at the end of 2024[28] Operational Improvements - Adjusted Gross Margin for Q4 2025 was 48.4%, slightly up from 48.1% in the prior year, indicating improved cost management[5] - The company is testing new island fridges to enhance retail visibility and has initiated a manufacturing line using breakthrough technology to improve product quality and profitability[2] - The company transitioned to a new distribution partner during the liquidation of a pet specialty distributor, which is expected to enhance sales in the pet specialty channel[32] - The company anticipates continued sales growth despite the transitional impacts from distributor changes, aligning with its strategic market expansion efforts[32] Future Projections - For 2026, the company projects net sales growth of 7% to 10% and adjusted EBITDA between $205 million and $215 million[11] - Adjusted EBITDA for Q4 2025 was $61.2 million, compared to $52.6 million in the prior year, reflecting strong operational performance[7] Non-Cash Compensation - Non-cash share-based compensation for the year ended December 31, 2025, was $10.8 million, down from $44.0 million in 2024, indicating a reduction of 75.5%[30]

Core Insights - Freshpet, Inc. reported significant growth in net sales, surpassing $1 billion for the first time, with a focus on enhancing retail visibility and e-commerce momentum [4][18]. Financial Highlights - Fourth Quarter 2025 - Net sales increased by 8.6% to $285.2 million compared to $262.7 million in the prior year [5]. - Gross profit was $123.5 million, representing a gross margin of 43.3%, up from 42.5% in the prior year [6]. - Adjusted Gross Profit reached $138.1 million, or 48.4% of net sales, compared to 48.1% in the prior year [6]. - SG&A expenses decreased to $79.0 million, or 27.7% of net sales, down from 35.1% in the prior year [7]. - Net income for the quarter was $33.8 million, compared to $18.1 million in the prior year [9]. - Adjusted EBITDA was $61.2 million, an increase from $52.6 million in the prior year [10]. Financial Highlights - Full Year 2025 - Full year net sales increased by 13.0% to $1,102.0 million from $975.2 million in the prior year [11]. - Gross profit for the year was $449.6 million, with a gross margin of 40.8%, slightly up from 40.6% in the prior year [12]. - Adjusted Gross Profit was $515.2 million, or 46.7% of net sales, compared to 46.5% in the prior year [12]. - SG&A expenses for the year were $374.0 million, or 33.9% of net sales, down from 36.7% in the prior year [13]. - Net income for the year was $139.1 million, significantly up from $46.9 million in the prior year, aided by a $68.4 million income tax benefit [14]. - Adjusted EBITDA for the year was $195.7 million, compared to $161.8 million in the prior year [15]. Balance Sheet and Cash Flow - As of December 31, 2025, the company had cash and cash equivalents of $278.0 million and total debt of $397.3 million [16]. - Cash from operations for the year was $160.6 million, an increase of $6.3 million compared to the prior year [16]. Outlook for 2026 - The company expects net sales growth in the range of 7% to 10% compared to 2025 [18]. - Adjusted EBITDA is projected to be between $205 million and $215 million, with positive free cash flow anticipated [18].

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Leadership Appointments - Freshpet, Inc. has appointed John O'Connor as Chief Financial Officer effective February 9, 2026, and Ana Lopez as Senior Vice President of Supply Chain effective February 2, 2026 [2][3] - O'Connor succeeds Ivan Garcia, who served as Interim CFO since October 2025 and will transition to Senior Vice President of Finance [2][3] Leadership Experience - John O'Connor brings over 20 years of financial leadership experience, particularly in animal health, having previously worked at Zoetis and Thrive Pet Healthcare [4] - Ana Lopez has over 20 years of global supply chain leadership experience, most recently at Unilever, and has held senior roles at Johnson & Johnson [5] Company Outlook - Freshpet has reaffirmed its guidance for fiscal 2025, with financial results for the fourth quarter and full year expected to be reported on February 23, 2026 [3]

Group 1 - Freshpet, Inc. will report its fourth quarter and full year results for 2025 on February 23, 2026, before market open [1] - A conference call with the executive management team is scheduled for February 23, 2026, at 8:00 a.m. ET to discuss the results [2] - The conference call will be available for live streaming on the company's website and will be archived for later access [3] Group 2 - Freshpet's mission is to provide fresh food for pets, using locally sourced ingredients and cooking in small batches to maintain quality [4] - The company's products are available in various retail formats across the U.S., Canada, and Europe, as well as online in the U.S. [5]

Core Viewpoint - Chewy is leveraging e-commerce to enhance sales of over 130,000 pet products, but long-term investors have seen a decline of over 70% in stock value over the past five years, indicating a need for caution [1] Group 1: Company Performance - Chewy reported an 8.3% year-over-year revenue growth in Q3 2025, maintaining this growth rate for the previous two quarters, although revenue growth has been slowing over the last three years [3] - The company has low net profit margins, with fiscal 2023 and fiscal 2024 margins at 0.4% and 3.3% respectively, and a Q3 2025 margin of 1.9%, which is significantly lower than high-growth tech companies [4][5] - Chewy's gross margins are below 30%, making it difficult to achieve high net profit margins, suggesting that the current revenue growth rate may not sustain long-term gains [5] Group 2: Strategic Focus - Chewy aims to increase profit margins by focusing on high-margin opportunities such as health and wellness, exemplified by its acquisition of SmartEquine to enter the profitable equine health market [6] - The acquisition of SmartEquine aligns with Chewy's strategy to enhance annual recurring revenue and customer lifetime values, potentially making revenue more predictable [7] - Despite Chewy's expansion into high-margin business categories, the overall pet industry is characterized by low margins, which may limit the company's ability to significantly improve net profit margins [8][9]

Company Performance - Freshpet (FRPT) closed at $64.25, with a daily increase of +1.56%, outperforming the S&P 500's loss of 0.06% [1] - Over the past month, Freshpet's shares have decreased by 3.61%, underperforming the Consumer Staples sector's gain of 1.35% and the S&P 500's gain of 1.99% [1] Upcoming Earnings - Freshpet is expected to report an EPS of $0.43, reflecting a year-over-year increase of 19.44% [2] - Revenue is forecasted to be $286.05 million, indicating an 8.88% growth compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $2.49 per share, showing a significant increase of +223.38% from the previous year, while revenue is expected to remain at $1.1 billion [3] Analyst Estimates - Recent changes to analyst estimates for Freshpet are crucial as they indicate confidence in the company's performance and profit potential [3] - The Zacks Consensus EPS estimate has remained unchanged over the last 30 days, and Freshpet currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - Freshpet has a Forward P/E ratio of 43.47, which is significantly higher than its industry's Forward P/E of 12.96 [6] - The PEG ratio for Freshpet is 1.55, which is in line with the average PEG ratio for Food - Miscellaneous stocks [6] Industry Context - The Food - Miscellaneous industry is part of the Consumer Staples sector and currently holds a Zacks Industry Rank of 176, placing it in the bottom 29% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Freshpet (FRPT) closed at $60.13, reflecting a -4.62% change from the previous day, underperforming the S&P 500's daily loss of 0.14% [1] - Over the past month, Freshpet's shares have appreciated by 10.02%, outperforming the Consumer Staples sector's loss of 0.83% and the S&P 500's gain of 0.94% [1] Earnings Expectations - Analysts expect Freshpet to report earnings of $0.43 per share, indicating a year-over-year growth of 19.44% [2] - The consensus estimate for revenue is $285.92 million, which represents an 8.83% increase from the prior-year quarter [2] - For the annual period, earnings are anticipated to be $2.49 per share and revenue is expected to reach $1.1 billion, reflecting growth of +223.38% and +13.08% respectively from the last year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Freshpet indicate positive sentiment regarding the company's business operations and profit generation capabilities [4] - The Zacks Rank system currently assigns Freshpet a rank of 3 (Hold), with the consensus EPS estimate having moved 0.35% lower over the last 30 days [6] - Freshpet's Forward P/E ratio stands at 25.37, which is a premium compared to the industry average Forward P/E of 13.83 [7] - The company has a PEG ratio of 0.9, while the average PEG ratio for the Food - Miscellaneous industry is 1.96 [8] Industry Context - The Food - Miscellaneous industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 201, placing it in the bottom 19% of over 250 industries [9]

Core Viewpoint - Brokerage recommendations, particularly for Freshpet (FRPT), suggest a favorable outlook, but reliance solely on these recommendations may not be prudent due to potential biases in the ratings [5][11]. Group 1: Brokerage Recommendations - Freshpet has an average brokerage recommendation (ABR) of 2.00, indicating a "Buy" based on the recommendations from 18 brokerage firms, with 50% of these being "Strong Buy" [2]. - The ABR is calculated based on brokerage recommendations and is typically displayed with decimals, while the Zacks Rank is a quantitative model based on earnings estimate revisions [10]. Group 2: Analyst Bias and Effectiveness - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, issuing five "Strong Buy" recommendations for every "Strong Sell" [6]. - This bias suggests that the interests of brokerage firms may not align with those of retail investors, potentially misleading them regarding future stock price movements [7][11]. Group 3: Zacks Rank Comparison - The Zacks Rank, which categorizes stocks based on earnings estimate revisions, is considered a more effective indicator of stock price performance compared to the ABR [8][12]. - The Zacks Rank is timely in reflecting changes in earnings estimates, unlike the ABR, which may not be up-to-date [13]. Group 4: Current Earnings Estimates for Freshpet - The Zacks Consensus Estimate for Freshpet remains unchanged at $2.59 for the current year, indicating steady analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate and other factors, Freshpet holds a Zacks Rank of 3 (Hold), suggesting caution despite the favorable ABR [15].