Financial Data and Key Metrics Changes - In Q3 2025, net revenue increased by 3% year over year, primarily driven by growth in the wholesale segment [13] - Gross margin was 36.9%, a decrease of 520 basis points compared to the prior year, mainly due to increased trade investment and green coffee inflation [15] - Operating expenses declined by $3.6 million, or 9%, compared to the same quarter last year, with marketing expenses decreasing by 14% [15][16] - Adjusted EBITDA increased by 19% to 8.4% of sales, representing a 115 basis point improvement year over year [16] Business Line Data and Key Metrics Changes - The wholesale segment, which sells packaged coffee and ready-to-drink beverages, grew by 5% year over year, with a 9% increase when adjusted for non-recurring revenue [13] - Direct-to-consumer segment revenue was down 4% year over year, but adjusted results were slightly positive after accounting for prior year benefits [14][8] - The outpost segment revenue grew by 6%, benefiting from higher franchise fees and improved merchandising [14] Market Data and Key Metrics Changes - Nielsen data indicated that the U.S. coffee category grew by 13.2%, while Black Rifle Coffee Company outperformed with sales up 36.7% year over year [4][5] - The ready-to-drink coffee category faced a 3.1% decline, but Black Rifle's performance was resilient, down only 0.6% overall [9] - Black Rifle Energy expanded its footprint to nearly 20,000 retail locations, achieving approximately 22% ACV [10] Company Strategy and Development Direction - The company aims to drive strong on-shelf execution, maintain cost discipline, and build a scalable platform for long-term success [4] - Focus on expanding distribution and driving velocity with key retail partners while advancing the product lineup [4][5] - The company is committed to supporting veterans through initiatives like forgiving medical debt for veterans [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities ahead, despite challenges in the cost environment [4] - The company expects to finish the year with at least $395 million in revenue and a gross margin of at least 35% [17] - Management acknowledged ongoing pressures from commodity inflation and tariffs but remains focused on operational improvements [20][19] Other Important Information - The company raised $40.25 million through an equity offering to strengthen its cash position [16] - The brand continues to gain share at retail, with unit gains up more than 20% year to date, reflecting real consumer demand [6] Q&A Session Summary Question: Guidance language appears more cautious than before, is that correct? - Management confirmed that while guidance remains unchanged, they are guiding towards the lower end of the range due to ongoing coffee inflation and trade investment [24] Question: Confidence in long-term growth targets? - Management expressed confidence in achieving a 10%-15% CAGR on the top line and approaching 40% margins by 2027, driven by distribution gains [26][28] Question: Consumer acceptance of energy drinks? - Management reported positive performance in initial markets and plans to expand strategically while maintaining focus on coffee [30] Question: Expansion of the energy category? - Management highlighted the launch of new flavors and the importance of staying relevant in the energy segment to drive distribution [32][34] Question: Marketing spend outlook for next year? - Management plans to maintain marketing spend as a percentage of net sales while shifting focus towards more effective working marketing strategies [36][38]

Financial Performance - Wholesale revenue increased by 5.3% year-over-year (YoY) to $67.0 million, or 9.4% YoY excluding barter[13] - Net revenue increased by 2.6% YoY to $100.7 million[13] - Adjusted EBITDA increased by 18.6% YoY to $8.4 million[13] - Gross margin was 36.9%, compared to 42.1% in Q3 2024, representing a decrease of 520 basis points[13, 32] Channel Performance - Black Rifle Coffee Company (BRCC) is outperforming the category through distribution and velocity, with a strong ACV (All Commodity Volume) trajectory[16] - BRCC's branding and focus on quality products have driven outsized unit growth compared to legacy brands[18] - DTC (Direct-to-Consumer) remains a valuable channel for innovation, loyalty, and direct engagement with passionate fans, with new subscriber AOV (Average Order Value) +27% higher than existing subscribers[21] - Black Rifle Ready-to-Drink (RTD) Coffee remains a top-3 brand in the category[22] Strategic Initiatives and Outlook - The company is targeting a long-term gross margin of 40%+[36] - The company reaffirms its 2025 financial guidance, expecting at least $395 million in net revenues, at least 35% gross margin, and at least $20 million in Adjusted EBITDA[43, 45, 46] - The company anticipates a revenue CAGR (Compound Annual Growth Rate) of 10%-15% through 2027[50]

Financial Data and Key Metrics Changes - In Q2 2025, net revenue increased by 7% year over year, primarily driven by growth in the wholesale segment [20] - Adjusted EBITDA declined by $5.1 million year over year, totaling $2.4 million for the quarter [23] - Gross margin was 33.9%, reflecting a 790 basis point reduction compared to the prior year, primarily due to green coffee inflation and trade pricing impacts [22][26] Business Line Data and Key Metrics Changes - The wholesale segment, which includes packaged coffee and ready-to-drink beverages, grew by 14% year over year, with a 21% increase when excluding non-recurring revenue from the prior year [20] - Direct-to-consumer (DTC) revenue was 8% lower year over year, but showed slight positive growth when adjusted for prior year loyalty rewards accrual changes [21] - The Outpost segment grew revenue by 11.3%, driven by higher franchise fees and increased average order value [21] Market Data and Key Metrics Changes - Nielsen data indicated a modest decline in unit volume for the U.S. coffee category, while Black Rifle Coffee Company outperformed the category with a 32% sales growth and a 29% increase in unit volume [6][7] - The ready-to-drink coffee business delivered 7% sales growth in a category that declined by 4%, with Black Rifle's unit volume up by 9% [12] - The energy drink segment reached over 15,000 retail locations, achieving 23% ACV [14] Company Strategy and Development Direction - The company is focused on long-term growth by expanding its footprint with key retail partners and investing in critical capabilities [5] - A land and expand strategy is being employed to increase shelf space and product assortment in grocery and mass retailers [9] - The company aims to maintain brand authenticity and community engagement, particularly with service members and veterans [16][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro cost environment but expressed confidence in the company's ability to navigate changes and position for long-term growth [5] - The company anticipates a sequential increase in revenue and EBITDA in the second half of the year, driven by distribution gains and marketing investments [24][80] - Full-year revenue guidance is maintained at $395 million to $425 million, with expectations of finishing towards the lower end of the range due to prior year revenue headwinds [24] Other Important Information - The company raised $40.25 million in gross proceeds through an equity offering to support the rollout of the energy portfolio and strengthen its balance sheet [28] - The Salt Lake property is currently held for sale as the company seeks a facility more suitable for its current size [62] Q&A Session Summary Question: What are the key drivers for the three-year outlook? - Management indicated that all aspects of the business are growing, including packaged coffee, ready-to-drink, and energy segments, contributing to the long-term growth outlook [34][36] Question: Why did Walmart sales decline year over year? - Management explained that internal sales can fluctuate due to timing of shipments and noted a lost item last year that impacted sales, but takeaway growth remains strong [38][40] Question: How will the company drive higher market share in the RTD segment? - Management emphasized that increasing ACV is a leading indicator for future sales and that they are investing in sales force enhancements to drive share growth [46][49] Question: What are the expectations for pricing in the back half of the year? - Management confirmed that pricing actions were executed in May, which will impact the market in the upcoming quarters [58] Question: What is the strategy for the energy drink rollout? - Management stated that the rollout is disciplined, focusing on limited geographies and national customers, with plans for expansion based on initial successes [66][90]