管理層發言
Greetings. Welcome to the Zevia PBC Second Quarter 2026 Earnings Conference Call. Please note this conference is being recorded. I will now turn the conference over to Jean Fontana of Investor Relations. Thank you, Jean. You may begin.
Thank you and welcome to Zevia's second quarter 2026 earnings conference call. On today's call are Alexandre Ruberti, President and Chief Executive Officer, and Girish Satya, Chief Financial Officer and Principal Accounting Officer. By now, everyone should have access to the company's second quarter 2026 earnings press release and investor presentation made available this afternoon. This information is available on the Investor Relations section of Zevia's website at investors.zevia.com. Before we begin, please note that all financial information presented on today's call is unaudited. Certain comments made on this call include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call, we will reference certain non-GAAP financial measures as we describe business performance. The SEC filings, as well as the earnings press release, presentation slides that accompany today's comments and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are all available on our website at investors.zevia.com. And now I'd like to turn the call over to Alexandre.
Good afternoon everyone and thank you for joining us today. It's a privilege to speak with you on my first earnings call as CEO. Before I begin, I would like to thank Amy Taylor for her leadership and her support during this transition. I am excited to lead Zevia as I believe that we have a truly distinct product within the better-for-you beverage category. As a member of the Board of Directors, I have gained valuable insights into the transformation that has taken place over the last two years. And I'm grateful for the opportunity to lead the company into the next chapter. My objective is to build on the work that has strengthened the foundation of our business, drawing from my beverage industry experience to accelerate growth and drive profitability while reinvesting in the future. We believe that Zevia's truly distinct market position presents a tremendous opportunity that we have yet to capture. We are working aggressively to build a strategic plan that we believe will deliver breakthrough growth, sustainable performance for the business, and drive long-term value for all stakeholders. Before sharing my initial observations, let me briefly highlight our results, which Girish will speak to in more detail. For the second quarter, we delivered net sales of $45 million at the high end of our guidance and adjusted EBITDA of $0.5 million above our expectations. We are encouraged by our progress year-to-date and the momentum going into the third quarter. We continue to make progress in driving awareness and trials through distribution and completed the rollout of our new packaging and flavors. That said, we have a significant opportunity to drive improvement in our go-to-market execution, which I will speak to shortly. Turning to marketing, we launched the anticipated 360 campaign Refreshingly Real, starring Cardi B as our Real Talk interpreter. The campaign generated tremendous engagement with nearly 29.5 billion social campaign video views, over 1.7 million engagements on Cardi's and Zevia posts, 1.8 billion PR earned media impressions, and 473 media placements. We plan to build on this momentum with additional campaigns, including upcoming Refreshingly Real contests. I look forward to keeping you posted on more upcoming events with Zevia and Cardi B. Now turning to my observations and priorities. For the last month and a half, I have spent much of my time meeting with our executive team and employees, as well as our customers, suppliers, and investors. Following my listening tour and a deep dive into the business, my belief in Zevia's potential is greater than ever. I also recognize that there are measures that need to be taken to convert our strength into sustained momentum in our business. To accomplish this, we need to make Zevia easier to find with a targeted strategic distribution expansion, easier to buy through enhanced in-store execution, and easier to choose by amplifying awareness and brand relevance. And we shall do so with urgency. As we develop a strategic plan for our path forward, and drawing from my broad experience, I will be focused on four key areas. First, evolving our go-to-market strategy. Second, sharpening and scaling our brand identity. Third, maintaining strong financial discipline and operational efficiency to support our sustainable growth initiatives. And fourth, establishing a performance-driven culture. I'd like to expand on each of these areas and provide some additional context. Starting with evolving our go-to-market strategy. We see a significant opportunity to expand the reach and productivity of the Zevia brand through three verticals: optimizing our singles platform, expanding distribution, and improving in-store execution. The first and most meaningful value creation opportunity is unlocking the full potential of the singles in-store. We view singles as the most effective vehicle for driving consumer discovery, trial, and ultimately household penetration. Over the past year, we have focused on refining the product format, optimizing our flavor assortment with the right balance of classic flavors and emerging trends, and improving taste. As consumers increasingly seek healthy beverage alternatives without sacrificing taste, singles represent a cost entry point into the brand and a catalyst for driving trial and long-term customer acquisition. Second, with an improved product portfolio, we see substantial opportunities to expand distribution and increase brand availability. Despite our good position within the zero sugar soda category, Zevia remains underpenetrated across several attractive channels including mass, club, food service, value chain, retail and e-commerce. We believe our enhanced singles platform improves our ability to secure new distribution gains while increasing visibility and accessibility for consumers. Expanding our presence where consumers shop remains a critical lever for driving both awareness and trial. The third component of our go-to-market strategy is improving productivity within existing doors through a stronger approach to in-store execution, merchandising, and category management. To be frank, we need to do a better job of activating Zevia in-store. We believe improved execution can increase velocity, support retailer economics, and strengthen our position as a key growth driver within the beverage category. This leads to our second strategic focus area: sharpening and scaling our brand identity. Over the past several years, we have made meaningful progress in defining what Zevia stands for, and we believe there is opportunity to further increase the precision and relevance of our positioning. We are moving beyond the broad concept of the health-evolved consumer and developing a more focused understanding of our core customers. We see our target consumer as wellness-aspirational, younger, digitally engaged families who enjoy beverages and flavors they love, but are increasingly unwilling to compromise on ingredient quality or health considerations. They want the enjoyment of soda without the trade-off. As we continue to refine our positioning around this consumer, we intend to support it with a disciplined ROI-driven marketing strategy designed to increase awareness, strengthen brand affinity, and improve customer acquisition efficiency. By pairing a more clearly defined brand identity with broader distribution and stronger execution, we believe we can meaningfully expand Zevia's addressable market and accelerate sustainable, profitable growth over time. Our third area of focus: financial discipline and operational efficiency. We aim to build on the success of our positive financial momentum and drive profitable innovation across functions. This will be achieved through maximizing or redirecting resources to align with strategic priorities as we reinvest savings from continuing efficiency gains. Our final area of focus is to establish a performance-driven culture within the organization, delivering results not just for today, but over the mid and long term. We will challenge each other to improve, take ownership, make confident decisions, and learn quickly from setbacks so we can keep raising the bar together without losing the essentials of trust, empowerment, and accountability. Before I turn it over to Girish, I want to thank everyone for the warm welcome I have received since stepping into this role. I believe we are operating from a better financial position as shown by improved cash flow and positive EBITDA over the last few quarters. I will share our strategic plan in the coming months with further details on our four key focus areas. As part of this plan, we will outline clear, measurable milestones and provide regular updates on our progress. I look forward to working with our talented team as we realize Zevia's great potential. We have an exciting future in front of us. With that, I will turn it over to Girish.
Thank you, Alexandre. Good afternoon, everyone, and thanks for joining our call today. Before we get into the quarter, I'd just like to take a moment to welcome Alexandre to the Zevia team. It's been a pleasure working more closely with him since he transitioned into the CEO role, and I look forward to the partnership. Echoing his remarks, with our vastly improved financial profile, coupled with our increased supply chain efficiencies and cost disciplines, we have a strong foundation from which to build the next phase of growth for the brand. Now turning to our results. For the second quarter, net sales increased 1.1% to $45 million, primarily driven by successful pricing actions. Our results also reflect the lapping of load-ins to Walgreens and Albertsons in the second quarter of last year, as well as the shift in cadence with higher volumes anticipated in the first and third quarters versus last year. Notably, net sales in the first half of 2026 increased 10.4% to $91.1 million, including the discontinuation of our tea offering, which began in Q2. Gross margin was 48.9%, a 20 basis point increase from 48.7% in the prior year quarter. The improvement reflects strong price realization, partially offset by increases in aluminum costs, from which we expect to see a bigger impact in the back half of the year. Selling and marketing expenses were $13.1 million or 29% of net sales in the second quarter of 2026 compared to $13.4 million or 30% of net sales in the second quarter of 2025. Breaking it down, selling expense was $8.1 million, or 17.9% of net sales in the second quarter of 2026, compared to $8.7 million, or 19.4% of net sales in the second quarter of 2025. The 150 basis point improvement reflects savings in warehousing and repackaging costs, partially offset by increased fuel costs. Marketing expense was $5 million or 11.1% of net sales in the second quarter of 2026, compared to $4.7 million or 10.6% of net sales in the second quarter of 2025. The increase in marketing expense as a percentage of sales as compared to last year was due to higher planned investments in the second quarter to support our new product rollout, package redesign, and Cardi B partnership. General and administrative expenses were $8.6 million, or 19% of net sales in the second quarter of 2026, compared to $8.1 million, or 18.2% of net sales in the second quarter of 2025. The increase was primarily due to higher personnel-related costs and outside services expenses, partially offset by lower accrued variable compensation. For the second quarter, adjusted EBITDA was approximately $0.5 million compared to an adjusted EBITDA of $0.2 million in the prior year period. Year-to-date, adjusted EBITDA increased $4.5 million versus the prior year period, despite significant cost pressures. Turning to our balance sheet, we ended the quarter with approximately $28.5 million in cash and cash equivalents and have an undrawn revolving credit line of $20 million. Now, turning to our outlook. Starting with the third quarter of 2026, we expect net sales of between $44 million to $46 million, reflecting 10% growth at the midpoint of the range. This guidance incorporates increased club distribution, ongoing strength in digital, and the benefit of incremental promotional support for the national rollout of our packaging refresh, partially offset by the discontinuation of our tea offering. We expect third quarter adjusted EBITDA loss to be between negative $3 million and negative $3.5 million. This assumes a reduction in gross margin to approximately 46% due primarily to the impact of elevated aluminum costs and higher promotions and channel mix. Additionally, this reflects pressure on selling expense related to higher fuel costs, as well as higher marketing investment associated with the Cardi B campaign launch and the rollout of the new product packaging nationwide. Looking at the full year, we are maintaining our 2026 net sales guidance of $170 million to $175 million, reflecting 7% growth at the midpoint of the range. In addition, this incorporates an approximately 1.5 percentage point impact from the discontinuation of tea. As Alexandre outlined in his discussion, we are amplifying efforts to drive materially accelerated growth across our business, but predominantly through an improved go-to-market strategy. We have identified a number of opportunities across our distribution channels. However, we realize that it will take time to bear fruit. Turning to profitability, we are maintaining our full year 2026 adjusted EBITDA range of negative $2 million to negative $4 million. As a reminder, due to ongoing macro volatility, this range continues to incorporate approximately $11 million related to the surge in fuel prices and higher aluminum-related costs. While we expect these elevated costs to come down over time, we are on track to achieve $3 million to $5 million in additional cost savings beginning in Q1 of 2027. In closing, we believe that we have a distinct market position which presents a tremendous opportunity that we have yet to capture. We remain confident in our path forward and our focus on executing a strategic plan to improve profitability through enhanced commercial execution, financial discipline, and targeted investments to strengthen our capabilities and create sustainable long-term value for all shareholders. I'll now turn it over to the operator to begin Q&A. Operator?
分析師問答
Our first question is from Andrew Strelzik with BMO Capital Markets.
I appreciate all the detail on some of the opportunities that you discussed already. You mentioned that it's going to take some time for that to play out. I'm curious how you think about which of the priorities you think we could see the benefits from the fastest or which take the longest, and how we should think about the cadence of those opportunities flowing through to performance.
Sure, Andrew. Good to talk to you again. If you try to prioritize, the top priority is everything to do with singles. This is urgent and the most meaningful priority we have, because currently we have about a 10% share in multipacks but a near-zero share in singles. The singles opportunity, if we maintain our current multipack share within singles, would be around $80 million. Our business today is based on multipacks and we don't have singles. Everything we are doing to activate singles is a current focus in the selling season and we are prioritizing it ahead of other initiatives. But this is the main opportunity for us.
Okay, that's helpful. If I could just ask about the guidance: the second quarter came in at the higher end of revenue guidance and above on EBITDA, and the third quarter guidance is at least ahead of consensus. Holding the annual guidance implies a weaker fourth quarter that is flat to down, which is not entirely inconsistent with what you had communicated previously, but perhaps a little weaker than I would have thought. In the context of the second quarter performance and holding the annual guidance, is there anything in the fourth quarter we should be aware of as an incremental headwind?
Thanks, Andrew. You're right that we said earlier in the year that Q1 and Q3 would be the biggest quarters. Our Q4 growth is consistent with what we outlined earlier and largely reflects the timing shift in marketing spend and innovation launches. Separately, it's also a remnant of our club business. As club becomes a more consistent channel, we should see less fluctuation in growth rates going forward. Generally speaking, we're in the early days of our marketing and innovation initiatives, which we recently launched with Cardi B a couple of weeks ago. We're encouraged by early reads and think this could be an opportunity, but there isn't a specific headwind we're calling out for Q4. As Alexandre noted, we believe we have many opportunities to accelerate growth, but those initiatives will take some time to bear fruit.
Our next question is from Jim Salera with Stephens Inc.
Alexandre, I wanted to ask about why now for singles and if you could walk through some of the operational infrastructure that gives you confidence you can execute such that it will be incremental. I know the West Coast DSD expansion has been key, but is singles going to be something we see nationwide or more of a regional rollout? Can you walk us through the cadence and how quickly we should expect that business to ramp?
Yes. At a high level, when we talk about improving the go-to-market, we are evaluating multiple approaches to guarantee distribution nationally and improve in-store execution. Options include expanding a DSD network, using brokers, broadliners, third-party sales and merchandising agencies. The mix of those approaches will be important and we are creating the plan now, aiming to start execution at the beginning of 2027. Regarding singles specifically: it is a rational opportunity because of our current share dynamics. We have improved the taste, refined the product format, moved away from a sleek can to a regular can size, and have the right price and value equation. This combination of improved product and strong execution should make a material difference. However, we need the operational structure in place to execute, which is why it will take some time after implementing the new go-to-market plan.
Okay. Girish, can you discuss aluminum pricing and the stepped-up transport, freight and diesel costs? How do those flow through gross margin, and any thoughts around price offsets? I think you guys were just shy of 5% price in the quarter— is that a fair cadence to carry forward for the year? Is there opportunity for incremental price?
Thanks, Jim. As you noted, many companies have faced increased aluminum and fuel costs. We've taken $20 million out of the business and identified an incremental $3 million to $5 million in cost savings that we plan to implement beginning Q1 2027, which will primarily impact COGS and selling expenses. We recently took a price increase, partly in anticipation of continued aluminum cost pressure. Given the broader macroeconomic outlook and consumers' flight to value, it's unlikely we'll pull the pricing lever again this year. We will continue to find opportunities to drive efficiencies across the P&L. We highlighted a dip in gross margin for Q3 in our guidance; some of that is due to deeper promotional activity to support the new packaging, new flavors, and the Cardi B campaign, and some of it will partially recover in Q4. In short, we're managing costs closely while balancing reinvestment in the business and improving the bottom line.
Our next question is from Eric Des Lauriers with Craig-Hallum. Please proceed with your question.
It seems we've touched a lot on singles and expanded distribution. Could we focus on some near-term opportunities, starting with the new packaging and new flavors? Any early insight into how the national rollout is proceeding? Are you seeing velocity pick-ups from the new packaging or flavors and any commentary on early performance would be helpful.
Thanks, Eric. It's very early to make definitive comments because we've had the national rollout for about one month and we don't yet have 100% of distribution— we estimate about 90% rollout so far. It will take a couple of months to fully evaluate and to segment the effects of sales attributable to the new packaging and flavors. Initial weekly reads, particularly in natural channels, show higher velocities, but it's still early. We're looking to the next month for a clearer view, and so far the first readings are positive.
That's great to hear. Regarding the Cardi B campaign, you provided a lot of detail on how viral it went. Are you seeing increased web traffic or higher engagement with the Zevia brand as a result? Anything to call out initially from this?
No question on that. The initial campaign metrics have been very strong: in the last two weeks we saw almost 30 million social video views and 1.8 billion in earned media impressions. The campaign has gone viral because of Cardi B's reach and how we engaged her with the brand. Our strategy is a full-funnel approach: awareness, consideration, and conversion. We have another ad coming in the next few weeks, a consumer contest where consumers will submit stories and she will create a new ad in real life for them, and we are planning to launch a signature product with Cardi B in early January. The campaign is designed to drive top-of-funnel awareness down through to product availability and trial.
Our next question is from Eric Serotta with Morgan Stanley.
I'm hoping you can give a little color on the priorities you laid out, Alexandre. Do you see these involving meaningful increases in investment or a step up of investment to achieve your ambitions across these initiatives, or do you think you can do it within the existing P&L cost envelope?
Thanks, Eric. It's still early to provide precise figures. We're developing the plan and will make dollars work harder for us. For go-to-market improvements, there are many ways to go; we will pursue the most efficient mix rather than the most expensive route. Better shaping the brand involves messaging and timing decisions that are more conceptual. Improving distribution and in-store execution will require investment because we need feet on the street. The Cardi B campaign is an initial test of increasing brand relevance and awareness and it is working. We don't have the exact investment amounts finalized yet, but we are planning and allocating resources as we speak.
Great. And in terms of the modern soda category, we've seen some brands on the probiotic and functional side slow a bit lately. Is that a headwind in terms of broader interest in modern soda, or is it an opportunity for Zevia to be more relevant when some competitors have gotten mind share over the past few years?
In terms of making Zevia more relevant, this ties to sharpening the brand. The modern soda category overall is growing; there are new entrants and shifts in share among brands. Our share has remained steady despite activity in the functional segment. Consumers continue to seek healthier ways to enjoy soda, and Zevia is well positioned to meet that need.
We have reached the end of the question-and-answer session. I would like to turn the floor back over to Alexandre Ruberti for closing comments.
Super, thank you. Thank you all for joining our call today. We look forward to updating you on the progress we are making in our four key areas and sharing our strategic plan to accelerate growth, improve profitability and build long-term shareholder value in the coming months. Thanks a lot.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.