Zevia PBC (ZVIA) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Net Sales $40.8 million, a 12% increase year-over-year. The increase was primarily due to expanded distribution at Walmart and incremental regional rotations at the club channel.
Gross Margin 45.6%, a 350 basis point decline from 49.1% in the third quarter of last year. The decline was due to $0.8 million in inventory obsolescence associated with the packaging refresh and the full realization of aluminum tariffs.
Selling and Marketing Expenses $12.7 million or 31% of net sales, compared to $12 million or 33% of net sales in the third quarter of 2024. The improvement in selling expenses was due to lower warehousing and freight transfer costs, while marketing expenses increased due to higher investments in brand marketing.
General and Administrative Expenses $7.7 million or 18.8% of net sales, compared to $7.4 million or 20.3% of net sales in the third quarter of 2024. The increase was primarily driven by higher accrued variable compensation expense.
Net Loss $2.8 million, unchanged from the prior year. The unchanged net loss was due to costs associated with inventory losses related to packaging refresh and higher brand marketing spend, offset by strong sales growth and operating efficiencies.
Adjusted EBITDA Loss $1.7 million, compared to $1.5 million in the prior year period. The decrease was due to costs associated with inventory losses related to packaging refresh and higher brand marketing spend, partially offset by strong sales growth and operating efficiencies.
Cash and Cash Equivalents Approximately $26 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: Zevia introduced several new flavors, including Strawberry Lemon Burst, Orange Creamsicle, and a fruity variety pack. Peaches & Cream became the fastest-selling new item on Amazon, and Strawberries & Cream was a top velocity driver at Kroger. The fruity variety pack is now the #1 Zevia SKU at Walmart.
Packaging Refresh: The company rolled out refreshed packaging featuring 'Soda Made Better,' highlighting zero sugar, no artificial colors, and no artificial sweeteners. This redesign increased purchase intent and will extend to legacy flavors in early 2026.
Distribution Expansion: Zevia expanded its distribution at Walmart, including a rollout to over half of Walmart's Canadian stores. Gains were also made in grocery and club channels, with increased sales velocity driving additional regional rotations.
Operational Efficiencies: Productivity initiatives reduced warehousing and freight transfer costs, contributing to improved selling expenses. Marketing investments increased, focusing on brand-building and consumer engagement.
Strategic Growth Pillars: The company focused on high-impact brand marketing, accelerated product innovation, and expanded distribution. These efforts aim to reshape the business and capitalize on changing consumer preferences for healthier products.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Gross Margin Decline: Gross margin declined by 350 basis points from 49.1% to 45.6% due to $0.8 million in inventory obsolescence associated with the packaging refresh and the full realization of aluminum tariffs.
Inventory Obsolescence: The company faced $0.8 million in inventory losses related to the packaging refresh, impacting profitability.
Aluminum Tariffs: The full realization of aluminum tariffs negatively impacted gross margins, adding cost pressures.
Adjusted EBITDA Loss: The adjusted EBITDA loss increased to $1.7 million from $1.5 million in the prior year, driven by inventory losses and higher brand marketing expenses.
Higher Marketing Expenses: Marketing expenses increased to $4.9 million (12.1% of net sales) from $3.5 million (9.7% of net sales) in the prior year, reflecting increased investments in brand marketing.
Economic Pressures on Costs: Higher accrued variable compensation expenses and increased marketing investments added to operational costs.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Full Year 2025 Net Sales Guidance: Raised to the range of $162 million to $164 million, up from prior guidance of $158 million to $163 million.
Full Year 2025 Adjusted EBITDA Loss Guidance: Improved to a range of $5 million to $5.5 million, compared to prior guidance of $7 million to $9 million.
Fourth Quarter 2025 Net Sales Guidance: Expected to be between $39 million to $41 million.
Fourth Quarter 2025 Adjusted EBITDA Loss Guidance: Expected to range between $0.25 million and $0.75 million.
2026 Product Portfolio Evolution: New packaging and a more sugar-like taste experience will be introduced across legacy and new flavors in early 2026.
2026 Regional Footprint Expansion: Thoughtful expansion in the convenience channel is planned, tracking in line with broader natural soda category trends.
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:Can you size up the impact of expanding distribution with Walmart in Canada?
A:The expansion with Walmart in Canada is a positive indicator of future opportunities for distribution expansion. Initially, Zevia was in less than 100 stores, but now it is in over 400 stores, which is more than half of Walmart stores in Canada. However, this expansion is not the major driver of growth; other factors are contributing to growth this quarter.
Q:What is the timeline for the rollout of the new packaging?
A:The new packaging, which has shown a significant increase in purchase intent, will be rolled out starting in early 2026. A limited-time flavor, Strawberries & Cream, is already in the market with the new packaging. The rest of the portfolio will transition to the new packaging in a rolling rollout from mid-Q1 to the second quarter of 2026.
Q:Who are the new customers coming to the brand, and what is the potential for household penetration?
A:New customers are often higher-income millennials with children, who see Zevia as a trusted brand for all family members. Household penetration has improved to over 5%, with the category operating at around 20%. There is significant potential for growth as the market shifts towards clean-label, zero-sugar products.
Q:What is the outlook for the energy drinks business?
A:The energy drinks business is small but growing in the natural channel and e-commerce. The focus remains on the soda business for now, but there is potential to expand into energy drinks in the future, leveraging the brand's trust and clean-label positioning.
Q:Do you have any brand awareness statistics to share?
A:While specific awareness levels were not reported, proprietary research shows double-digit increases in purchase intent and consideration. The focus remains on expanding awareness, trial, and household penetration.
Q:Why is there less seasonality in the revenue guidance for Q4?
A:The less pronounced seasonality is due to distribution gains throughout the year and incremental regional rotations in the club channel, despite comping the Walmart load from the previous year.
Q:What are the expectations for shelf space and distribution next year?
A:Walmart continues to perform well, with new items and strong visibility driving growth. Opportunities exist in club, mass, value, and dollar channels, as well as in convenience and foodservice. The focus is on driving velocity and expanding same-store distribution.
Q:What is the outlook for profitability in 2026?
A:The company aims to achieve positive adjusted EBITDA in 2026. While aluminum tariffs are a headwind, $15 million of $20 million in productivity savings will be realized in 2025, with an additional $5 million in 2026. The focus will remain on investing in customer acquisition while achieving profitability.
Q:Review of Unclear Management Responses
A:Management avoided providing specific brand awareness statistics, instead focusing on general improvements in purchase intent and consideration. Additionally, they did not provide detailed guidance for 2026 profitability, only stating a goal to achieve positive adjusted EBITDA while acknowledging headwinds like aluminum tariffs.
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
Albertsons Kroger
Amazon Peaches
Amazon Strawberries
Block Party
Caramel news
Club effort
Peaches Cream
Soda brand
Strawberries Cream
Zevia
activation
afternoon
brand momentum
color
competition
design
engagement
fruity variety
gain
ingredient
legacy flavor
market
offer
packaging
portfolio evolution
priority
product brand
progress pillar
purchase intent
reach
space
start
story
summer
sweetener
track
trend
user
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.
