Financial Data and Key Metrics Changes - First quarter revenue was $104.2 million, down 13% year-over-year, aligning with expectations [5][23] - Adjusted EBITDA improved by $8 million, with a margin increase of 650 basis points compared to last year [6][26] - Adjusted gross margins exceeded 40% for the fourth consecutive quarter, improving by 550 basis points year-over-year [6][25] Business Line Data and Key Metrics Changes - Showroom channel revenue grew by 7%, marking the fifth consecutive period of growth, with comparable sales up 11% [5][24] - Direct-to-consumer (DTC) net revenue was $63.4 million, with showroom sales increasing by 7.4% [23][24] - E-commerce sales declined by 8.2%, reflecting challenges in conversion and messaging [15][24] - Wholesale segment revenue decreased by 24.2% to $40.8 million due to reduced door counts and overall volume declines [24] Market Data and Key Metrics Changes - The overall consumer sentiment remains cautious, impacting spending patterns [38][41] - Brand awareness reached 77%, indicating strong recognition but highlighting the need for better communication of product benefits [14] Company Strategy and Development Direction - The company announced a significant expansion of its partnership with Mattress Firm, increasing distribution slots from 5,000 to 12,000, expected to generate over $70 million in incremental revenue [7][9] - The strategy focuses on three pillars: pioneering new technologies, promoting differentiation, and prioritizing gross margin through operational improvements [9][10] - The launch of the new Rejuvenate 2.0 mattress line aims to enhance product offerings and drive sales [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the consumer psyche and macroeconomic uncertainties affecting the second quarter [38][39] - The company reaffirmed its full-year revenue guidance of $465 million to $485 million, anticipating some headwinds from tariffs [21][30] - Management remains focused on executing strategic priorities while navigating industry challenges [31] Other Important Information - The company entered into an amendment to borrow an additional $20 million to support the expanded distribution agreement and ongoing investments [9][28] - The impact of tariffs is being closely monitored, with an estimated annual cost impact of approximately $10 million [20] Q&A Session Summary Question: Can you elaborate on the $70 million from the Mattress Firm partnership? - The number is based on current productivity and projected incremental slots, considering some cannibalization but expecting overall growth [34][36] Question: What are the trends in the second quarter? - There are concerns about consumer sentiment, with cautious spending observed [38][41] Question: How did the new agreement with Omni Group come about? - The relationship developed due to mutual benefits in driving traffic and improving margins for Mattress Firm [46][48] Question: Will tariffs impact the P&L? - Tariffs will start impacting in the second quarter, and the company is working on strategies to mitigate these costs [54] Question: Is there exclusivity in the new partnership with Mattress Firm? - There is no exclusivity; the focus is on serving all wholesale partners effectively [69] Question: How does the expanded partnership affect guidance for 2025? - The ramp-up from the partnership is still being finalized, but there are expected tailwinds in the latter part of the year [76][77]

Core Viewpoint - Barfresh Food Group Inc. reported a 4% year-over-year revenue increase to $2.9 million for Q1 2025, achieving gross margin of 31%, exceeding guidance, and reiterating fiscal year 2025 revenue guidance of $14.5 million to $16.6 million [1][12]. Financial Performance - Revenue for Q1 2025 was $2.9 million, up from $2.8 million in Q1 2024, driven by expanded bottle capacity at existing manufacturers [3]. - Gross margin for Q1 2025 was 31%, down from 41% in Q1 2024, attributed to temporary production inefficiencies and increased logistics costs [4]. - Net loss for Q1 2025 was $761,000, compared to a loss of $449,000 in Q1 2024 [5]. - Adjusted EBITDA for Q1 2025 was a loss of approximately $506,000, compared to a gain of approximately $53,000 in Q1 2024 [6]. Operational Insights - The company is onboarding new co-manufacturers, which is expected to resolve production inefficiencies by the end of Q2 2025, allowing for increased production capacity [2]. - The company continues to secure new customers in the education sector, which is anticipated to enhance revenue in the latter half of 2025 [2]. Balance Sheet and Financing - As of March 31, 2025, the company had approximately $3.4 million in cash and accounts receivable, and $1.1 million in inventory [11]. - In February 2025, the company secured $3.0 million in growth financing through a common stock offering to support production scaling [11]. Outlook - The company expects to achieve record fiscal year revenue between $14.5 million and $16.6 million for 2025 [12].