Executive Summary

Q2 2025 delivered strong top-line growth: net sales rose 17% to $168.76M; diluted EPS of $0.38 beat consensus, while reported EBITDA was pressured by higher freight and initial tariff impact . EPS and revenue topped S&P Global consensus; EBITDA came in below consensus on a GAAP basis but adjusted EBITDA was resilient .*
Guidance was raised for full-year net sales to $565–$580M, while gross margin was tightened to ~36% and adjusted EBITDA maintained at $86–$92M, signaling confidence in demand but caution on cost headwinds .
Key positives: Vita Coco Coconut Water net sales up 25% globally; International net sales up 37%; Treats rollout contributed meaningfully to “Other” category; healthy cash balance ($167M) and no debt .
Key pressure: Gross margin fell to 36.3% (from 40.8% in Q2’24) on elevated ocean freight, finished goods costs, and baseline 10% tariffs; SG&A increased on marketing, personnel, bad debt reserves, and rent overlap .
Near-term stock catalysts: raised revenue guidance; tariff trajectory and mitigation; margin cadence (Q3 sequentially lower; Q4 improvement); Walmart reset prospects and Treats distribution expansion .

What Went Well and What Went Wrong

What Went Well

Vita Coco Coconut Water net sales grew 25% globally; Americas +22% and International +43%, driven by category strength and improved inventory/service levels .
International segment strong: net sales +37% YoY with coconut water +43%; momentum in U.K. and Germany from targeted investments .
Raised FY25 net sales guidance to $565–$580M; Treats national rollout supporting top line alongside high-teens branded growth assumptions .

Quotes:

“For the quarter, Vita Coco Coconut Water net sales grew 25% globally… We believe this growth is being fueled by our investment as the category leader… driving increased household adoption and new consumption occasions.” — Michael Kirban .
“Our exceptionally strong shipment performance… benefited from very strong demand… and great execution from our teams.” — Martin Roper .

What Went Wrong

Gross margin compression: consolidated GM fell to 36.3% from 40.8% YoY due to higher ocean freight rates, finished goods costs, and baseline 10% tariffs .
SG&A increased to $36.14M (+$7M YoY) on increased marketing, personnel costs, higher bad debt reserves, and overlapping rent; adjusted EBITDA declined YoY to $29.24M .
Private label declines: Americas private label net sales fell 37% to $14.69M amid expected transitions; management flagged turbulence in PL comps near-term .

Financial Results

Quarterly Performance vs Prior Quarters

Metric	Q4 2024	Q1 2025	Q2 2025
Net Sales ($USD Millions)	$127.29	$130.92	$168.76
Gross Margin (%)	32.4%	36.7%	36.3%
Net Income ($USD Millions)	$3.37	$18.88	$22.91
Diluted EPS ($)	$0.06	$0.31	$0.38
Adjusted EBITDA ($USD Millions)	$7.73	$22.51	$29.24
Cash & Equivalents ($USD Millions)	$165.93	$154.88	$167.04

Year-over-Year (Q2 2025 vs Q2 2024)

Metric	Q2 2024	Q2 2025	YoY Change
Net Sales ($USD Millions)	$144.12	$168.76	+17.1%
Gross Margin (%)	40.8%	36.3%	-450 bps
Net Income ($USD Millions)	$19.09	$22.91	+$3.82
Diluted EPS ($)	$0.32	$0.38	+$0.06
Adjusted EBITDA ($USD Millions)	$32.24	$29.24	-$3.00

Segment and Category Net Sales (Q2 2025 vs Q2 2024)

Segment / Category	Q2 2024 ($USD Thousands)	Q2 2025 ($USD Thousands)
Americas – Vita Coco Coconut Water	$98,494	$120,450
Americas – Private Label	$23,135	$14,685
Americas – Other	$2,873	$6,826
International – Vita Coco Coconut Water	$13,952	$19,882
International – Private Label	$4,816	$6,222
International – Other	$846	$694
Total Net Sales	$144,116	$168,759

Segment Gross Margin and CE Volume KPIs (Q2 2025 vs Q2 2024)

KPI	Q2 2024	Q2 2025
Americas Gross Margin (%)	41.9%	36.0%
International Gross Margin (%)	33.3%	38.1%
Consolidated Gross Margin (%)	40.8%	36.3%
CE Volume Change – Vita Coco Coconut Water	Americas +20.6%, Intl +22.9%, Total +20.9%	(Change vs 2024 shown at right)
CE Volume Change – Private Label	Americas -34.0%, Intl +26.5%, Total -21.7%	(Change vs 2024 shown at right)
CE Volume Change – Other	Americas +212.7%, Intl +54.2%, Total +202.2%	(Change vs 2024 shown at right)

Guidance Changes

Metric	Period	Previous Guidance (Q1 2025)	Current Guidance (Q2 2025)	Change
Net Sales ($USD Millions)	FY 2025	$555–$570	$565–$580	Raised
Gross Margin (%)	FY 2025	35%–37%	~36%	Narrowed/Tightened
SG&A Growth	FY 2025	Low to mid-single digits vs 2024	Low to mid-single digits vs 2024	Maintained
Adjusted EBITDA ($USD Millions)	FY 2025	$86–$92	$86–$92	Maintained
GAAP Net Income	FY 2025	Not provided	Not provided	Maintained (not provided)
Tariff Assumptions	FY 2025	Excludes delayed reciprocal tariffs	Includes 10% baseline; excludes additional announced tariffs not implemented	Clarified baseline

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Tariffs/Macro	FY25 outlook excluded potential tariffs; gross margin 35–37% anticipated . Q1 reaffirmed outlook; excluded delayed reciprocal tariffs .	Operating under 10% baseline tariff impacting ~late Q2; pricing mitigation lag; uncertainty on additional tariffs; baseline applies to ~60% global COGS .	Headwind intensifying near-term; mitigation in progress; visibility limited.
Ocean Freight Rates	Q4: increased ocean freight costs pressured margins . Q1: higher YoY freight kept GM lower .	Elevated spot rates; expect average decline through year; limited forward contracting; Suez closure keeps rates higher; Q3 GM sequentially lower, Q4 improving .	Volatile but easing expected; cautious stance near-term.
Product Performance (Coconut Water)	Q4: coconut water net sales +30% in quarter . Q1: coconut water net sales +25% .	Coconut water net sales +25% globally; strong scans; momentum in U.S., U.K., Germany .	Strengthening; category acceleration continues.
Innovation (Vita Coco Treats)	Treats launch planned for 2025 . Q1: Treats began appearing late Q1 .	National rollout completed; contributed to “Other” growth; added ~low single-digit lift to branded U.S. scans; distribution expanding .	Building contribution; runway for distribution.
Retail/Distribution (Walmart, C-Stores)	Q4: distribution increases anticipated in resets . Q1: capacity secured for growth .	Walmart discussing reset with potential distribution improvement; timing around early Q4; velocities up >50% on retained SKUs; C-store ACV rising with strong velocities .	Improving distribution outlook 2026; near-term lift possible.
Private Label	Q4: PL strong in quarter, mixed in year . Q1: PL volume mixed .	Q2 reflects known losses; comps turbulent near-term; new PL business secured for 2026 .	Near-term down; potential stabilization/growth in 2026.

Management Commentary

“The coconut water category continues to be one of the fastest growing… Vita Coco Coconut Water maintaining strong retail sales growth… Americas growing 22% and International growing 43%.” — Michael Kirban .
“Our increased full year net sales expectations are based on… high teens Vita Coco Coconut Water growth, and the national roll out of Vita Coco Treats… partially offset by a decrease in private label sales.” — Martin Roper .
“Gross margins were down… due to… higher ocean freight… higher finished goods product cost, and the 10% baseline tariff… partially offset by favorable product mix.” — Corey Baker .
“We are confident in our ability to continue to deliver strong top-line performance and therefore are raising our full-year net sales guidance to between $565 million and $580 million… full-year adjusted EBITDA of $86 million to $92 million.” — Corey Baker .

Non-GAAP adjustments and impact:

Adjusted EBITDA adds back stock-based compensation, derivative gains/losses, FX, and other adjustments including a one-time 2023 incentive program and overlapping NYC office rent; Q2 2025 other adjustments totaled $0.95M .
Q2 2025 Adjusted EBITDA: $29.24M vs GAAP EBITDA $26.88M; YoY Adjusted EBITDA down $3.00M on higher SG&A .

Q&A Highlights

Tariff trajectory and EBITDA impact: management operating under 10% baseline; additional announced tariffs not in outlook; mitigation actions feasible over time; baseline applied to ~60% global COGS, with potential retaliatory scenarios previously discussed .
Margin cadence: pricing mitigation lag and elevated freight drive Q3 GM down sequentially; Q4 GM expected to improve; full-year ~36% GM reiterated .
Private label outlook: Q2 reflects known losses; comps turbulent near-term; new PL contract secured for 2026; baseline ~$15M in Q2 Americas PL .
Walmart reset: discussions underway for expanded distribution; timing around Sept–Nov; velocities on retained SKUs up >50% .
C-store expansion: ACV increasing; strong velocities (e.g., 1L in 7-Eleven) with continued push across independents .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Surprise
Revenue ($USD Millions)	$161.56*	$168.76	+$7.20
EPS (Diluted, $)	$0.354*	$0.380	+$0.026
EBITDA ($USD Millions, GAAP)	$28.52*	$26.88	-$1.64

Values retrieved from S&P Global.*

Implications:

Revenue and EPS beats reflect robust branded demand and Treats contribution; EBITDA miss on GAAP basis driven by cost inflation and tariff onset; Adjusted EBITDA resilience suggests core profitability excluding non-operating items .

Key Takeaways for Investors

Top-line momentum intact: coconut water category acceleration and Treats rollout underpin raised FY net sales guidance; watch International growth (U.K., Germany) for sustained outperformance .
Margin volatility near-term: expect Q3 GM dip from tariff/pricing lag and freight timing; Q4 improvement anticipated; full-year ~36% GM reiterated .
Tariff path is the swing factor: baseline 10% assumed; additional tariffs excluded pending detail; diversified sourcing and pricing actions provide mitigation levers .
Retail distribution catalysts: Walmart reset could re-accelerate U.S. scans in 2026; C-store gains and convenience velocities support mix and visibility .
Private label drag moderating: Q2 reflects known losses; new PL business in 2026 may stabilize trajectory; model near-term turbulence but medium-term recovery potential .
Balance sheet strength: $167M cash, no debt, supports promotional activity and strategic investments without leverage risk .
Trade setup: near-term sentiment likely driven by tariff headlines and margin cadence; medium-term thesis rests on category growth, brand leadership, international scaling, and Treats innovation .

Additional Notes:
- All financial figures and management commentary are sourced from the company’s Q2 2025 press release and 8-K 2.02, and Q2 2025 earnings call transcript.
- Non-GAAP Adjusted EBITDA definitions and reconciliations are provided by the company; GAAP vs non-GAAP comparability noted where relevant.

Citations: Press release (Q2 2025): 8-K (Q2 2025, Item 2.02): Earnings call transcript (Q2 2025): Prior quarters for trend: Q1 2025 press release/8-K: Q4 2024 8-K:

Vita Coco Company, Inc. (COCO)·Q2 2025 Earnings Summary