JONES SODA CO (JSDA)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 delivered the highest first-quarter revenue since 2009 at $5.0M (+29% YoY), with gross margin expanding 850 bps to 37.8% and net loss narrowing to $1.2M; Mary Jones contributed ~$0.6M, up 200% YoY .
• Sequentially, results improved versus Q4 2023: revenue rose from $3.5M to $5.0M and gross margin recovered from 19.5% (impacted by a one-time write-off) to 37.8% .
• Management highlighted strong momentum from pricing actions, Canada distribution via Dot Foods, and higher-margin Mary Jones, and stated they are “on track for Q2 ’24 being the best quarter in Jones history” (qualitative guidance) .
• Strategic catalysts included the Fallout Nuka-Cola Victory collaboration driving D2C sales, entry into new formats (Jones Minis), and action sports partnerships (SLS), setting the narrative for continued growth and brand refresh execution .

What Went Well and What Went Wrong

What Went Well

• Record Q1 revenue and margin expansion supported by proactive pricing and mix shift to Mary Jones; “highest revenue performance for the first quarter since 2009” and +850 bps margin expansion to 37.8% .
• Strong traction in Mary Jones: ~$0.6M revenue in Q1, nearly 100% royalty-margin profile, with geographic expansion (Canada with Tilray) and HD9 product introductions including gummies and shots .
• Brand and channel execution: Nuka-Cola Victory drove >$500K D2C web sales YTD and new food service capabilities via Dot Foods, Green Nature; early convenience channel test showing ~4 units/SKU/week velocities .

What Went Wrong

• Cash declined to $2.8M at quarter-end from $3.9M at year-end; management discussed reliance on a $2.0M revolving line of credit and potential future capital market activity to fuel growth .
• Operating expenses increased to $3.0M (+$0.5M YoY) primarily from selling and marketing tied to expansion initiatives; net loss remained negative at $(1.2)M .
• No formal quantitative guidance provided; trajectory depends on execution of multiple new product/category launches and market expansions, elevating near-term operational complexity .

Financial Results

Segment/KPI Highlights:

Estimate Comparison:

Guidance Changes

Note: Company provided qualitative direction on momentum and new launches; no formal numeric guidance ranges were issued in Q1 materials .

Earnings Call Themes & Trends

Management Commentary

• “2024 is off to a great start as I’m pleased to report our highest revenue performance for the first quarter since 2009… revenue growth of 29%, gross profit margin expansion of 850 basis points and a decrease in operating expenses as a percentage of revenue of 350 basis points” — David Knight, CEO .
• “From the start of January… growth trajectory versus last year increase while simultaneously improving our gross margins… on track for Q2 ’24 being the best quarter in Jones history” .
• On strategy: “Transitioning Jones from a craft soda company trapped in cane sugar 12 ounce glass bottles to being an innovative beverage company… innovation as the number one priority… nine adjacent beverage categories where we believe Jones can play” .
• On Mary Jones: “Given the royalty nature… revenue is generated within nearly a 100% gross margin… substantial lift to overall gross margin profiles” .

Q&A Highlights

• Financing runway: With a $2M credit line and cash, “we have enough to get these products into the market,” while leaving open the possibility to raise capital if growth targets exceed plans .
• Spiked Jones expansion: Early test in >350 Albertsons/Safeway stores; additional markets targeted prudently as product/packaging iterate; velocity higher than craft soda .
• Mary Jones state expansion: Shots to lead Michigan; Illinois and Missouri under due diligence as next markets .
• Brand ambassador: Management is evaluating options to amplify sub-brands like mixers and flavored soda water .
• Capital markets and listing structure: Uplisting/share structure improvements cited as a top near-term priority alongside capital planning .

Estimates Context

• Wall Street consensus via S&P Global for Q1 2024 EPS and revenue was unavailable in this analysis due to access limits, so beats/misses versus estimates cannot be assessed this quarter. Future comparisons will default to S&P Global consensus when accessible.

Key Takeaways for Investors

• Momentum: Q1 revenue and margin inflection reflect pricing actions, Canada distribution improvements, and Mary Jones mix; watch Q2 print given management’s “best quarter” comment .
• Mix shift: Mary Jones revenue rose to ~$0.6M with near-100% royalty margins; scaling HD9 edibles/shots and Canadian penetration should support consolidated gross margin trajectory .
• Channel diversification: Food service infrastructure (Dot Foods/Green Nature) and convenience tests broaden exposure; expect incremental margin benefits from fountain/slush placements .
• Innovation cadence: Nuka-Cola Victory, Jones Minis at Walmart, premium craft mixers and Jones+ caffeine expand formats and dayparts; monitor retail adoption pace and repeat rates .
• Liquidity/watch capital: Cash fell to $2.8M; $2.0M revolver in place; management may pursue additional capital to accelerate growth; monitor dilution risk vs. growth ROI .
• Valuation drivers: Near-term narrative hinges on Q2 performance, Mary Jones scaling, and execution in new categories; medium-term thesis rests on sustained margin expansion and channel mix .
• Risk checks: Regulatory evolution in THC/HD9, execution complexity across nine category adjacencies, and marketing spend ROI are key variables; lack of formal guidance increases reliance on quarterly delivery .