Zevia PBC (ZVIA) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings report shows strong financial performance with a 10.1% increase in net sales and improved margins. The company has made significant progress in reducing its net loss and achieving a positive adjusted EBITDA. While there are concerns about tariffs and increased marketing expenses, the overall sentiment is positive due to strong sales growth, successful product launches, and productivity gains. The Q&A section highlights positive analyst sentiment, despite some unclear responses from management. Given these factors, the stock is likely to see a positive movement over the next two weeks.
Key Financial Performance
Net Sales $44.5 million, an increase of 10.1% year-over-year. This growth was primarily driven by expanded breadth and depth of distribution across channels, partially offset by increased promotional activity.
Gross Margin 48.7%, an increase of 680 basis points compared to 41.9% in the second quarter of last year. This improvement reflects lower product costs and improved inventory management, partially offset by higher promotional activity and channel mix.
Selling and Marketing Expenses $13.4 million or 30% of net sales, compared to $13.6 million or 33.7% of net sales in the second quarter of 2024. This represents a decrease of 7.1%, attributed to maintaining best-in-class customer fulfillment rates while reducing costs.
Marketing Expense $4.7 million or 10.6% of net sales, compared to $4.3 million or 10.7% of net sales in the second quarter of 2024. The increase was primarily due to investments to drive brand awareness.
General and Administrative Expenses $8.1 million or 18.2% of net sales, compared to $7.7 million or 19% of net sales in the second quarter of 2024. The increase was primarily due to higher variable compensation expenses and outside services, partially offset by efforts to right-size the business.
Net Loss $0.7 million, compared to a net loss of $7 million last year, an improvement of $6.3 million year-over-year. This improvement reflects accelerated savings from productivity initiatives and a shift in the timing of marketing investments.
Adjusted EBITDA $0.2 million, compared to an adjusted EBITDA loss of $4.4 million in the prior year period. This $4.6 million improvement reflects accelerated savings from productivity initiatives and a shift in the timing of marketing investments.
Cash and Cash Equivalents $26.3 million at the end of the quarter, with an undrawn revolving credit line of $20 million.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New Product Launches: Introduced new flavors such as Strawberry Lemon Burst, Orange Creamsicle, Peaches and Cream, and the return of Salted Caramel. These flavors are designed to appeal to a broader audience and enhance the taste profile.
Packaging Refresh: Updated packaging to better communicate Zevia's positioning as a better-for-you soda with zero sugar, fake colors, and sweeteners.
Variety Packs: Launched a 12-count variety pack in grocery and natural channels and a new foodie variety pack at Walmart, featuring new flavors like Fruit Punch.
Retail Distribution Expansion: Surpassed historical peak distribution levels at retail, with improved shelf presence and new products driving nearly double-digit velocity.
Channel-Specific Growth: Strong performance in Walmart, grocery, club (Costco), drug, and convenience channels. Notable gains include record same-store sales in Costco regions and new distribution in all three national drug chains.
Cost Savings: Achieved $15 million in annualized savings with an additional $5 million identified for 2026, totaling $20 million.
Profitability Milestone: Reported first profitable quarter as a public company with adjusted EBITDA of $0.2 million.
Marketing Campaigns: Launched 'Get the Fake Outta Here' and 'Get the Fake Out of Summer' campaigns, driving record engagement and double-digit growth.
Strategic Growth Pillars: Focused on marketing, product innovation, and distribution to amplify brand awareness, drive trial, and expand user base.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Tariff Costs on Aluminum: The company is operating under the assumption that current tariffs of 50% on aluminum will remain unchanged. However, if tariff costs rise, this could potentially impact the cost of goods sold (COGS) in 2026.
Increased Promotional Activity: While expanded distribution drove sales growth, it was partially offset by increased promotional activity, which could pressure margins.
Uncertain Macro Environment: The company acknowledges operating in an uncertain macroeconomic environment, which could impact consumer behavior and overall business performance.
Higher Marketing Investments: The company plans to increase marketing investments in the second half of the year, which could impact short-term profitability.
Repackaging Costs: A $500,000 one-time charge related to packaging redesign will impact Q3 adjusted EBITDA.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Full Year Net Sales Guidance: Maintaining full year net sales guidance in the range of $158 million to $163 million.
Adjusted EBITDA Loss Guidance: Expecting adjusted EBITDA loss to range from $7 million to $9 million for the full year, improved from prior guidance of $8 million to $11 million.
Third Quarter Net Sales Guidance: Expecting net sales between $38 million and $40 million for Q3.
Third Quarter Adjusted EBITDA Loss Guidance: Expecting Q3 adjusted EBITDA loss to be between $3.4 million and $3.9 million, reflecting increased marketing investments, higher promotions, and higher tariff-related costs.
Cost Savings Realization: Identified an incremental $5 million in cost savings in COGS and selling expenses, expected to begin realizing in 2026, bringing the total to $20 million.
Tariff Impact on COGS: Current tariffs of 50% on aluminum are assumed to remain unchanged, but potential increases could impact COGS in 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What drove the strong sales in the quarter, including the impact of new flavors?
A:Growth came from several areas, including new distribution at Walmart, positive momentum in grocery due to spring resets, and regained 12-pack distribution in some retailers. New items like Strawberry Lemon Burst and Sprouts exclusive contributed to growth. Club business, including Costco, also added to volume growth.
Q:Can you share more details about the $5 million productivity gains?
A:The gains are from efficiencies in the supply chain, simplifying the product portfolio, and network optimization. Savings will start to be realized in Q4 2023, with more significant impacts in Q1 2024 and further benefits in selling and warehousing expenses by 2026.
Q:Why does the Q4 guidance appear flat or slightly down despite maintaining top-line guidance?
A:The flat outlook is due to cautiousness about the overall consumer environment and lapping a substantial Walmart pipeline fill from the previous year.
Q:What is the impact of tariffs on gross margins, and how should we think about it moving forward?
A:Tariffs are expected to have a 200-basis point impact on gross margins, with material impacts starting in Q3. Short-term gross margin pressure is expected due to tariffs and a one-time packaging refresh charge, but margins are expected to recover to mid-to-high 40s and eventually 50s in the long run.
Q:What drove the sequential step-up in household penetration and purchase frequency?
A:Increased visibility in the marketplace, distribution expansion in Walmart, and innovation contributed to the step-up. New-to-brand users and strong repeat purchases also played a role.
Q:What details can you provide about the product rotation in the club channel?
A:The club channel features a 6-flavor variety pack, which is well-suited for the discovery-oriented environment. Seasonal rotations for newness are also used. Record same-store sales in the club channel support the potential for becoming an everyday item.
Q:How is the company balancing improved EBITDA and cost savings with reinvestment in marketing?
A:The company focuses on long-term brand building and short-term velocity-driving tactics. While aiming for profitability by 2026, they are investing in marketing to drive top-line growth. Productivity initiatives have allowed for both profitability and increased marketing investment.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing how they would balance improved EBITDA with reinvestment in marketing, providing a general response about balancing long-term brand building and short-term tactics without specific details.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Alan Goldman
CEO President
Fontana
Group
Inc Research
Research Division
SKU
Soda
Unidentified
Walmart
afternoon
apple
chain
club
content
convenience
date
digit
distribution gain
effort result
engagement
flavor launch
flavor summer
foodie variety
indicator
life
network
packaging
positioning
progress pillar
record
region
response
sell
spring reset
start
store distribution
taste
trend
ZVIA Transcript
Zevia PBC (ZVIA) Q1 2026 Earnings Call Transcript
Positive5-7
The earnings call reflects positive sentiment due to improved financial metrics, such as adjusted EBITDA turning positive and reduced marketing expenses. The Q&A section highlights strategic partnerships and marketing efforts with Cardi B, expected to enhance brand visibility. Despite macroeconomic uncertainties, the company maintains a cautious yet optimistic outlook, with significant improvements in packaging and distribution. The lack of immediate price hikes and effective cost management further bolster the positive sentiment, suggesting a likely stock price increase in the short term.
Zevia PBC (ZVIA) Q4 2025 Earnings Call Transcript
Positive2-26
The earnings call highlights strong financial performance with revenue growth and improved margins. The guidance for 2026 shows optimism with raised sales and improved EBITDA loss guidance. The focus on product expansion and sustainability aligns with market trends, and the Q&A section didn't reveal significant concerns. The positive outlook on revenue and margin improvements, coupled with the raised guidance, suggests a likely positive stock reaction in the short term.
Zevia PBC (ZVIA) Q3 2025 Earnings Call Transcript
Unknown11-6
The earnings call presented mixed signals: a 12% YoY increase in net sales and expanded distribution at Walmart are positives, but declining gross margins and unchanged net loss are concerns. The Q&A revealed optimism about future growth and profitability, but management's vague responses on brand awareness and 2026 profitability raise uncertainties. The market may react neutrally due to these offsetting factors.
Zevia PBC (ZVIA) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings report shows strong financial performance with a 10.1% increase in net sales and improved margins. The company has made significant progress in reducing its net loss and achieving a positive adjusted EBITDA. While there are concerns about tariffs and increased marketing expenses, the overall sentiment is positive due to strong sales growth, successful product launches, and productivity gains. The Q&A section highlights positive analyst sentiment, despite some unclear responses from management. Given these factors, the stock is likely to see a positive movement over the next two weeks.
ZVIA Slides
ZVIA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
