Executive Summary

Q4 2024 revenue declined 11.5% year over year to $105.9M, but gross margin expanded sharply to 38.1% (+1,170 bps YoY) as RTD transformation costs rolled off; adjusted EBITDA was $9.9M versus $12.1M in Q4 2023 .
FY2024 revenue was $391.5M (-1% YoY) with gross margin 41.2% and adjusted EBITDA $39.3M; net loss improved by $49.1M to $(7.6)M, reflecting considerable operational improvement .
FY2025 guidance: revenue $395–$425M, gross margin 37–39%, adjusted EBITDA $20–$30M; management flagged headwinds from green coffee inflation, loyalty reserve adjustments, and trade investments, with growth weighted to H2 and Q1 headwinds from $11.8M non-recurring revenue in the prior year .
Strategic catalysts: national rollout of Black Rifle Energy with KDP DSD support, continued ACV gains in packaged coffee and RTD, and potential pricing actions not in guidance; DTC stabilization via subscription focus provides optional upside if sustained .

What Went Well and What Went Wrong

What Went Well

Gross margin expanded materially: Q4 GM 38.1% vs 26.5% YoY on productivity and lapping prior RTD costs; FY2024 GM 41.2% (+950 bps YoY), showing structural improvement in operations and mix .
Distribution strength: FDM packaged coffee ACV rose to 48.6% (+11.5 pts YoY); RTD ACV to 47.2% (+3.8 pts); Q4 wholesale gains continued despite barter normalization; Energy shipped late Q4 with KDP-supported national rollout .
Net loss and FCF improved: FY2024 net loss improved by $49.1M to $(7.6)M; FY2024 free cash flow positive at $2.6M vs $(52.2)M in 2023; management emphasized disciplined execution and cost reductions .

What Went Wrong

Top-line softness: Q4 revenue down 11.5% YoY to $105.9M, largely from barter reduction and DTC/outpost declines; adjusted EBITDA in Q4 fell $2.2M YoY to $9.9M on trade spend and coffee inflation .
DTC pressured: Q4 DTC revenue down 17.7% YoY to $32.2M; subscribers down to 190.4K (from 225.8K), reflecting lower acquisition; management reallocated advertising to higher-return wholesale initiatives .
2025 margin guide below FY2024 actuals: GM guided 37–39% vs 41.2% FY2024; adj. EBITDA guided $20–$30M vs $39.3M FY2024, citing ~2.5 pts green coffee inflation, loyalty reserve effects, and energy/trade investments .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$89.0	$98.2	$105.9
Gross Profit ($USD Millions)	$37.3	$41.3	$40.4
Gross Margin (%)	41.9%	42.1%	38.1%
Net Income (Loss) ($USD Millions)	$(1.4)	$(1.4)	$(6.7)
Adjusted EBITDA ($USD Millions)	$8.5	$7.1	$9.9
Diluted EPS ($USD)	$(0.01)	$(0.01)	$(0.03)

YoY comparison (Q4):

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$119.7	$105.9
Gross Margin (%)	26.5%	38.1%
Net Income (Loss) ($USD Millions)	$(14.0)	$(6.7)
Adjusted EBITDA ($USD Millions)	$12.1	$9.9
Diluted EPS ($USD)	$(0.07)	$(0.03)

Segment breakdown (Q4 2024 vs Q4 2023):

Sales Channel ($USD Thousands)	Q4 2023	Q4 2024
Wholesale	$73,525	$67,196
Direct to Consumer	$39,072	$32,151
Outpost	$7,053	$6,530
Total Net Sales	$119,650	$105,877

KPIs:

KPI	Q4 2023	Q4 2024
FDM ACV (%)	37.1%	48.6%
RTD ACV (%)	43.4%	47.2%
DTC Subscribers	225,800	190,400
Total Outposts	36	37

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue ($USD Millions)	FY2025	N/A (initial)	$395–$425	New
Gross Margin (%)	FY2025	N/A (initial)	37–39	New
Adjusted EBITDA ($USD Millions)	FY2025	N/A (initial)	$20–$30	New

Context and drivers: Management expects lower GM and EBITDA vs FY2024 actuals due to (~2.5 pts) green coffee inflation, (~1.5 pts) loyalty reserve impact, (~1 pt) trade/promo for Energy; locked >95% coffee pricing/volume for 2025; potential pricing actions could be upside but are not in guidance .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Energy launch & distribution	Announced Energy RTD launch in Q4; KDP partnership for FY25 rollout	Shipped Dec’24; ~17% ACV in first month; targeting 12 priority markets; KDP DSD to 180k doors	Accelerating rollout; broadening retail presence
Wholesale/FDM expansion	Wholesale +8% YoY (Q2); FDM ACV up to 40%; RTD ACV 46.8%	FDM ACV 48.6%; RTD ACV 47.2%; continued shelf gains	Continued breadth and depth expansion
DTC strategy	DTC down; reallocated ad spend; paused Outpost expansion	Stabilizing subscribers; focus on subscription/LTV; minimal spend to acquire one-time buyers	Stabilization focus; potential upside if sustained
Gross margin drivers	GM uplift from RTD productivity, warehousing, mix; lower green coffee costs (Q2/Q3)	Q4 GM +1,170 bps YoY; 2025 GM guide lower on green coffee inflation, loyalty reserve recycling, trade investments	Structural improvements; near-term compression in 2025
Coffee inflation & pricing	Lower green coffee costs (Q2)	2025 green coffee input costs +35%; >95% hedged; considering price increases (not in guide)	Hedged; possible pricing upside
Barter transactions	Barter benefitted reported revenue (Q2/Q3)	Cycling $11.8M non-recurring Q1 revenue; media credits reduce cash cost of marketing	Headwind near term; efficient cash marketing usage
Tariffs/packaging	—	Aluminum exposure small; packaging low double-digit % of COGS; no hedges needed	Manageable exposure

Management Commentary

CEO: “Adjusted EBITDA tripled, gross margin improved by 9.5 points, and we saw outstanding distribution growth in packaged coffee at grocery… These improvements demonstrate the strength of our business model and the results we can achieve with disciplined execution.”
CEO on Energy: “We took Black Rifle Energy from concept to commercialization in about 6 months… reached 17% ACV… With KDP support, we expect our Energy product line to be a significant contributor to growth in 2025.”
CFO: “Gross margin improved by 950 basis points to 41.2%… more than 2/3 of adjusted EBITDA improvement driven by gross profit; headcount and G&A reductions offset planned marketing increases.”
CFO outlook: “We expect FY2025 revenue $395–$425M… gross margin 37%–39%… adjusted EBITDA $20M–$30M… with Q1 the lowest quarter given $11.8M revenue that will not reoccur.”

Q&A Highlights

Energy distribution trajectory: ACV already above 17%; goal 20–30% ACV in 2025; KDP DSD accelerates access to C-store; marketing to “heavy up” in summer months .
DTC stabilization: Focus on subscriber base; stabilization observed with gains offsetting losses; Amazon improving; upside to guidance if stabilization persists .
Pricing optionality: Potential price increases to offset inflation; none embedded in 2025 guidance; could be upside .
Barter/marketing credits: Media credits booked to marketing expense line; reduce cash spend per $ of marketing, supporting Energy launch economics .
Cost/impairments: Limited aluminum exposure in COGS; noncash impairment of 3 underperforming shops; no ongoing expectation for significant impairments .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to data access limits. We attempted to retrieve EPS, revenue, and EBITDA consensus for Q2–Q4 2024; S&P Global returned a daily limit error. We will update estimate comparisons when access is restored.
Attempt details: GetEstimates for BRCC (Primary EPS Consensus Mean, Revenue Consensus Mean, EBITDA Consensus Mean; periods Q4 2024, Q3 2024, Q2 2024) returned “Daily Request Limit Exceeded” [functions.GetEstimates error].

Key Takeaways for Investors

Gross margin expansion is real and broad-based, but expect near-term compression in 2025 from coffee inflation, loyalty reserve recycling, and energy launch trade investments; monitor any pricing actions for upside not in guidance .
Energy rollout with KDP is a multi-year distribution ramp; ACV already ~17% and rising; marketing spend to ramp in summer; near-term revenue more back-half weighted; watch monthly ACV and velocity updates .
Q1 2025 set-up: management flagged $11.8M prior-year revenue that won’t repeat; consider this headwind in near-term models and trading stance; sequential build expected thereafter .
Wholesale remains the growth engine; FDM ACV and shelf additions continue; track total points of distribution and SKU depth for sustained share gains .
DTC stabilization via subscriptions could provide incremental upside with minimal paid acquisition; watch subscriber net adds and churn metrics .
Free cash flow and net loss improved materially in FY2024, supported by opex reductions and higher gross profit; Energy requires trade/marketing, but media credits from barter transactions reduce cash burden .
Governance/leadership: CFO transition to Board expected; continuity plan in place—monitor for any changes in financial strategy post-handoff .

Note: All financials are GAAP unless stated; Adjusted EBITDA and free cash flow are non-GAAP measures with reconciliations provided in filings.

Sources: Q4 2024 8-K and press release ; Q4 2024 earnings call transcript ; Q3 2024 press release ; Q2 2024 press release .

BRC Inc. (BRCC)·Q4 2024 Earnings Summary