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BARFRESH FOOD GROUP INC. (BRFH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered revenue of $2.78M, up 45% year over year, but down sequentially from Q3’s record $3.64M; gross margin compressed to 26% due to onboarding costs and elevated logistics, driving adjusted EBITDA to a loss of $0.56M .
  • Versus S&P Global consensus, BRFH materially missed: revenue $2.79M vs $4.17M*, and EPS -$0.06 vs -$0.01*; limited sell-side coverage (two estimates) magnified the surprise and likely reset expectations for near-term profitability recovery* [Values retrieved from S&P Global].
  • Management guided FY 2025 revenue to $14.5–$16.6M (record), with Q1 revenue/margins “consistent with Q4” and margin expansion expected in H2 as co-manufacturing equipment installations complete by end of Q2 .
  • Strategic catalysts: Pop & Go juice freeze pops launched in Q4; broker coverage now ~95% of U.S.; manufacturing capacity ramp underway (targeted full bottle capacity by end of Q2), positioning for back-half acceleration .

What Went Well and What Went Wrong

What Went Well

  • Record FY revenue of $10.7M; adjusted gross margin improved to 37% for FY 2024, reflecting favorable mix and pricing actions .
  • Launch of Pop & Go 100% juice freeze pops in Q4, targeting the larger lunch daypart; initial revenue began in Q4 and management expects meaningful contribution in 2025 .
  • Expanded sales coverage (~95% of the U.S.) and onboarding of new co-manufacturers; CEO: “we expect… full manufacturing capacity by the end of Q2 2025… in time for our high season” .

What Went Wrong

  • Missed Q4 adjusted EBITDA breakeven from prior guidance; Q4 adjusted EBITDA was a loss of ~$0.56M vs Q3 guidance for positive adjusted EBITDA .
  • Gross margin contracted to 26% (vs 33% YoY and 35% in Q3) due to temporary production inefficiencies and increased logistics costs during co-manufacturer onboarding .
  • Estimates miss: revenue came in ~$1.38M below consensus and EPS missed by ~$$0.05, implying sell-side expectations did not fully capture transitional cost headwinds* [Values retrieved from S&P Global].

Financial Results

Quarterly trends (sequential comparison)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$1,460,000 $3,637,000 $2,788,000
Gross Margin %34.8% 35% 26%
Adjusted Gross Margin %—38% 30%
Net Loss ($USD)$(1,011,000) $(513,000) $(852,000)
Adjusted EBITDA ($USD)$(682,000) $(124,000) $(561,000)
Selling, Marketing & Distribution ($USD)$583,000 $990,000 $872,000
Selling, Marketing & Distribution (% of revenue)40% —31%
G&A ($USD)$871,000 $705,000 $620,000

Year-over-year (Q4)

MetricQ4 2023Q4 2024
Revenue ($USD)$1,922,000 $2,788,000
Gross Margin %33% 26%
Adjusted Gross Margin %33% 30%
Net Loss ($USD)$(701,000) $(852,000)
Adjusted EBITDA ($USD)$(427,000) $(561,000)
Selling, Marketing & Distribution ($USD)$624,000 $872,000
G&A ($USD)$624,000 $620,000

Versus Wall Street consensus (S&P Global, Q4 2024)

MetricConsensus*Actual
Revenue ($USD)$4,167,500*$2,788,000
EPS ($USD)-$0.01*-$0.06*
# of Estimates2*—

Values retrieved from S&P Global.

Segment breakdown

Segment/ChannelQ4 2024 RevenueNotes
Not disclosed—Company does not report revenue by segment; qualitative emphasis on Education (Twist & Go, Pop & Go) .

KPIs and operating context

KPIQ2 2024Q3 2024Q4 2024
Cash + Accounts Receivable ($USD)—~$2.1M ~$1.1M
Cash ($USD)~$383,000 ——
Inventory ($USD)~$1.5M ~$770,000 ~$1.5M
Sales coverage (% of U.S.)~95% ~95% ~95%
Education penetration (% of schools)—~4.5% ~5%
Production capacity (units/yr)>120M; +400% YoY >120M Full bottle capacity targeted by end of Q2 2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAQ4 2024“Positive adjusted EBITDA” $(561,000) loss Lowered/Missed
RevenueFY 2024“Record fiscal year revenue” expected $10.7M actual (record) Achieved
Gross Margin / Adjusted GMFY 2024GM & Adj GM “mid to high 30s” GM 34%, Adj GM 37% Achieved (Adj GM), GM low end
Revenue & Margin cadenceQ1 2025—Q1 revenue/margins consistent with Q4 New
RevenueFY 2025—$14.5–$16.6M (record) New
Manufacturing rampH1 2025—Bottle co-manufacturing equipment installations complete by end of Q2 New/Operational milestone

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2024)Trend
Manufacturing capacity & onboardingSecured 3 new co-manufacturers; >120M units capacity; onboarding; target expanded bottle capacity Q4 Two strategic partners being onboarded; full capacity by end of Q2 2025; transitional cost pressures in Q4 Improving capacity; near-term cost drag; H2 margin expansion expected
Pop & Go launchAnnounced launch targeting lunch daypart; record Q3 achieved without Pop & Go; initial shipments planned Q4 Launched in Q4; early demand; bids underway; 2025 contribution expected Scaling from pilot to broader adoption
Education channel penetration~95% broker coverage; growing school wins; ~4.5% penetration CEO cites ~5% penetration; opportunity with two of top-10 districts Expanding footprint; large runway
Financing & liquidityReceivables facility ($1.5M) and non-recourse litigation financing; inventory build for Q3 Raised $3.0M equity in Feb-2025 for capacity scale-up Strengthened balance sheet to fund capacity ramp
Supply chain/logisticsTransitional multiple-location sourcing increased costs Higher logistics costs and production inefficiencies drove margin compression; expected to resolve by end of Q2 Headwinds abating by mid-2025
Legal disputeOngoing; non-recourse financing secured Claim minimum $20M referenced in Q3 Q&A; case progressing Litigation continues; no gain contingencies recorded

Management Commentary

  • CEO: “We expect the onboarding to be complete by the end of Q2 2025, bringing us to full manufacturing capacity in time for our high season… in Q3.”
  • CFO: “Gross margin for the fourth quarter of 2024 was 26%… Adjusted gross margin… 30%… [the] temporary production inefficiencies and increased logistic costs… impacted Q4.”
  • CEO on Pop & Go: “We launched the product late in Q4… we do have bids that are in process now… potential further upside depending on how well the POPs get into the market in this bid cycle.”
  • CEO on customer relationships: “It’s definitely tested… in terms of supply… change parts… expected… installed and commissioned before the end of Q2, paving the way for a very solid back half.”
  • CFO on financing: “In February 2025, the company secured $3,000,000 in growth financing… supports scaling… particularly in the education channel.”

Q&A Highlights

  • Pop & Go contribution: Management expects bids and broader adoption to drive material revenue in 2025; targeting lunch daypart with higher volumes and favorable margin profile vs Twist & Go .
  • Customer relationships and supply constraints: Near-term supply challenges tested relationships; resolution expected by end of Q2 as equipment comes online .
  • Education funding backdrop: No direct negative feedback; program changes could be net positive by shifting away from substitutes students prefer less .
  • Profitability cadence: Q4 adjusted EBITDA breakeven was missed due to start-up and logistics; margin expansion expected post-installations; Q1 revenue/margins to mirror Q4 .
  • Litigation context: Minimum $20M claim referenced; company avoids further commentary; non-recourse financing in place .

Estimates Context

  • Q4 2024 miss vs consensus: Revenue $2.79M vs $4.17M*; EPS -$0.06 vs -$0.01*; only two estimates contributed, underscoring thin coverage and higher variance risk*.
  • Implication: Near-term sell-side models likely adjust lower for margins/Q1 cadence, with H2 2025 margin expansion contingent on timely equipment installation and logistics normalization .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter was a transitional reset: strong YoY revenue growth but a significant miss vs consensus and margin compression from onboarding and logistics costs .
  • Near-term setup: Q1 2025 to resemble Q4; H2 inflection depends on completion of co-manufacturing equipment installs by end-Q2 and supply-chain normalization .
  • FY 2025 top-line guidance ($14.5–$16.6M) signals confidence in capacity and Pop & Go ramp; monitor bid wins and installation milestones as catalysts .
  • Pop & Go can expand the education TAM materially (lunch volumes ~5x breakfast) and may carry equal or better margins than Twist & Go; track adoption and repeat orders .
  • Liquidity bolstered by $3.0M equity raise and receivables facility; inventory aligns with ramp plans, reducing risk of stock-outs during peak seasons .
  • Litigation remains a wild card (min $20M claim reference); no gain contingencies recorded—treat upside as optionality, not part of base case .
  • Positioning: Expect volatility around mid-year capacity milestones and school district bid outcomes; constructive medium-term if execution on manufacturing and distribution delivers margin normalization and sustained growth .