Executive Summary

Q1 2025 revenue was $90.0M, down 8.6% YoY; gross margin contracted to 36.1% (−680 bps YoY) as trade/price investments, green coffee inflation, and loyalty program effects weighed on profitability; Adjusted EBITDA fell to $0.9M .
The company maintained FY 2025 revenue ($395–$425M) and Adjusted EBITDA ($20–$30M) guidance, but lowered gross margin guidance to 35–37% (from 37–39%) due to tariffs and commodity pressure .
Black Rifle Energy™ reached 21% ACV and ~12,000 locations by quarter-end; packaged coffee ACV rose to 50.2% and RTD coffee ACV to 47.9%—expanding retail footprint despite category headwinds .
Versus S&P Global consensus, Q1 revenue modestly beat ($89.97M actual vs $88.08M estimate*), but GAAP EPS missed (−$0.04 actual vs −$0.027 estimate*) and EBITDA was below consensus ($0.9M adj. vs $2.02M estimate*). The gross margin cut and tariff commentary are the key stock catalysts, partly offset by distribution gains in energy and coffee .
Management emphasized cost reductions ($8–$10M annualized), 95% 2025 green coffee hedging, and price increases in 2H to defend margins amid inflation and tariff headwinds .

What Went Well and What Went Wrong

What Went Well

Black Rifle Energy™ early momentum: 21% ACV with ~12,000 locations; leveraging KDP’s national DSD network and focusing on 12 priority markets .
“We launched Black Rifle Energy into retail in January… product was available in nearly 12,000 retail locations, reaching 21% ACV” .
Retail distribution gains: packaged coffee ACV up 12.2 pts to 50.2%; RTD ACV up 5.1 pts to 47.9% YoY—expanding shelf presence even as coffee category unit volumes fell .
“Across all tracked channels combined, ACV rose 12 points to 50%… we expect to build on this momentum throughout 2025” .
Operating discipline: Salaries/wages −11% and G&A −23% YoY; management affirmed cost savings plan of $8–$10M annualized to hold FY EBITDA guidance despite tariffs .

What Went Wrong

Margin compression: gross margin fell to 36.1% (−680 bps YoY) from higher trade/price investments (≈500 bps), green coffee inflation (≈330 bps), and loyalty reserve cycling (≈200 bps) .
DTC softness: DTC revenue −15% YoY to $27.7M as advertising was reallocated; adjusted decline ≈−5% excluding prior-year loyalty policy change .
Earnings quality: Net loss widened to −$7.8M vs +$1.9M YoY; Adjusted EBITDA fell to $0.9M; GAAP EPS −$0.04 (miss vs consensus*) .

Financial Results

Historical performance vs prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$98.2	$105.9	$90.0
GAAP EPS ($)	−$0.01	−$0.03	−$0.04
Gross Margin (%)	42.1%	38.1%	36.1%
Adjusted EBITDA ($USD Millions)	$7.1	$9.9	$0.9

Q1 2025 actual vs S&P Global consensus

Metric	Q1 2025 Actual	Q1 2025 Consensus (S&P Global)	Result vs Consensus
Revenue ($USD Millions)	$89.97	$88.08*	Beat
GAAP EPS ($)	−$0.04	−$0.0267*	Miss
EBITDA ($USD Millions)	Adjusted: $0.90	$2.02*	Miss

Note: S&P Global “EBITDA” may reflect a different (non-adjusted) definition than company “Adjusted EBITDA.” Values with asterisk (*) retrieved from S&P Global.

Segment/channel breakdown

Sales Channel ($USD Millions)	Q1 2024	Q1 2025
Wholesale	$60.43	$56.79
DTC	$32.61	$27.72
Outpost	$5.35	$5.46
Total Net Sales	$98.39	$89.97

KPIs and distribution footprint

KPI	Q3 2024	Q4 2024	Q1 2025
FDM ACV (%)	47.2%	48.6%	50.2%
RTD ACV (%)	47.3%	47.2%	47.9%
DTC Subscribers	194,000	190,400	181,900
Total Outposts	37	37	37

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue	FY 2025	$395–$425M	$395–$425M	Maintained
Gross Margin	FY 2025	37–39%	35–37%	Lowered
Adjusted EBITDA	FY 2025	$20–$30M	$20–$30M	Maintained

Management quantified tariffs/commodity impacts and reaffirmed the EBITDA range by offsetting with pricing and cost savings .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Energy launch	Announced Q4 launch; KDP partnership set for manufacture/distribution	Began shipping late Q4	21% ACV; ~12k locations; 12 priority markets; ramping marketing	Up
DTC channel	−11.4% YoY; ad spend shifted to wholesale	DTC −17.7% YoY in Q4	−15% YoY; ≈−5% adj. ex-loyalty; subscription stabilization and conversion improvements	Stabilizing
Trade spend/slotting	Higher promotions aided margin mix	Higher trade promotion noted	~500 bps hit; slotting/trade mostly energy; promotional sharpening	Elevated
Tariffs/macro	Not mentioned	Not contemplated in original plan	~$5M EBITDA impact expected; gross margin guide cut	Emerging headwind
Pricing & green coffee inflation	Margin tailwinds from productivity	Coffee inflation partially offset	Arabica more than doubled since early ’24; price increases in 2H; 95% hedged 2025	Inflation up; pricing planned
Distribution ACV	FDM/RTD ACV expansion	FDM ACV 48.6%, RTD 47.2%	FDM ACV 50.2%, RTD 47.9%	Up

Management Commentary

CEO: “Black Rifle is off to a promising start in 2025… two-year distribution ramp for Black Rifle Energy™… we continue to grow market share in every category in which we compete” .
CFO: “We now expect gross margin to be in the 35–37% range compared to our prior estimate of 37–39%… at least a 300 bps impact from green coffee inflation net of pricing… ~100 bps impact from tariffs” .
Mission emphasis: “We’re building more than a beverage company. We’re building a community that stands behind the people who serve” .
On DTC: “DTC revenue declined 15%… adjusting for last year’s loyalty reserve, the decline was closer to 5%… actions… show encouraging signs of stabilization” .

Q&A Highlights

Energy launch feedback: Early sell-through positive; clean ingredient profile; focus on convenience in 12 markets; more data to come as distribution deepens .
Tariffs: ~1/3 of COGS tied to imports; ~$5M EBITDA impact in 2025; effects primarily in Q3; gross margin cut to 35–37% .
Trade spend and slotting: ~500 bps margin impact; trade/slotting almost entirely energy; promotional pricing used to drive trial .
Pricing and hedging: Price increases contemplated for late Q2–Q4; 95% hedged for 2025; competitors ~90 days hedged, facing higher spot exposure .
DTC strategy: Reduced ad spend but improved mobile app conversion; subscription stabilization; focus on subscriber benefits .
Retail performance: Largest customer +3%; sharp promotional actions; broader grocery up ~400% driven by ACV gains .

Estimates Context

Q1 2025 comparison: revenue beat; GAAP EPS missed; EBITDA below consensus (definition differences noted).
• Revenue: $89.97M actual vs $88.08M consensus* → modest beat .
• GAAP EPS: −$0.04 actual vs −$0.0267 consensus* → miss .
• EBITDA: Adj. $0.90M vs $2.02M consensus* → miss .
FY 2025: Company guides $395–$425M revenue and $20–$30M Adjusted EBITDA; S&P consensus is $395.48M revenue* and ~$20.23M EBITDA*—near the low end of management’s ranges, implying Street has embedded margin risks (tariffs/coffee) .
Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Distribution-led growth is intact: packaged coffee and RTD ACV continue to rise; Energy achieved 21% ACV quickly—sustained share gains in core categories plus new daypart expansion underpin the top-line ramp .
Margin headwinds likely persist near term: trade/slotting for energy, green coffee inflation, and tariffs drive 2Q gross margin 1–2 pts below Q1 (management guide), with improvement in 2H as pricing and productivity benefits flow through .
95% hedged for 2025 coffee mitigates volatility relative to peers; price increases are planned to partially offset commodity inflation and tariff costs without sacrificing velocity .
EBITDA trajectory back-half weighted: Adjusted EBITDA limited 1H; cost savings ($8–$10M) and revenue build support FY $20–$30M—even after lowering GM guidance .
DTC stabilization is underway with improved conversion and subscription focus; however, retail shift and lower acquisition spend will keep absolute DTC dollars subdued near term .
Stock reaction catalyst: gross margin guidance cut (35–37%) and tariff commentary versus modest revenue beat; investors should watch 2Q margin dip and evidence of 2H margin recovery alongside Energy mix ramp .
Non-GAAP definition change: Adjusted EBITDA no longer excludes RTD transformation costs (retro-adjusted), lowering prior-year comparables by $1.6M—important for modeling and YoY comparisons .

Appendix: Additional Data Points and Cross-References

Q1 2025 revenue by channel: Wholesale $56.8M, DTC $27.7M, Outpost $5.5M; Wholesale down due to $8.5M nonrecurring barter; DTC down from loyalty accrual change and lower acquisition spend .
Q1 2025 cost lines: Marketing +48.8% YoY to $11.3M as Energy awareness spend ramps; Salaries/wages −11.1% YoY; G&A −23.2% YoY .
Consolidated financial statements (Q1 2025): Revenue $89.97M; Gross profit $32.47M; Operating loss −$5.43M; Net loss −$7.85M; GAAP EPS −$0.04 .
FY 2025 guidance table and footnote on 2024 barter/loyalty impacts: revenue $395–$425M; GM 35–37%; Adj. EBITDA $20–$30M; 2024 revenue favorably impacted by $23.9M barter and $6.5M loyalty policy change .

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