Sign in

You're signed outSign in or to get full access.

JS

JONES SODA CO (JSDA)·Q2 2024 Earnings Summary

Executive Summary

  • Revenue grew 49% year over year to $7.16M, the highest Q2 since 2009; gross margin expanded 340 bps to 35.8%. Bottom-line loss widened on elevated innovation spend, with Adjusted EBITDA at $(1.08)M .
  • Mary Jones revenue accelerated to $1.20M (+100% sequential; +200% YoY), aiding mix-driven margin gains; Nuka-Cola special release generated $0.93M in Q2 sales and ~$0.40M DTC, reinforcing the DTC and retail partnership flywheel .
  • Liquidity: cash was $1.46M at quarter-end; subsequently the company raised ~$3.2M via oversubscribed private placement and has a $2.0M revolver, supporting H2 innovation and inventory builds .
  • No formal numerical guidance provided; management emphasized continued gross margin improvement into Q3, five H2 product launches (cola/zero cola, Pop Jones, Fiesta Jones, premium craft mixers, cannabis extensions), and broader retail activation as catalysts .
  • Estimates context: S&P Global consensus was unavailable; results cannot be benchmarked to Street for Q2 2024. Consider near-term narrative-driven moves around new product rollouts and Mary Jones geographic expansion while estimate visibility remains limited.

What Went Well and What Went Wrong

What Went Well

  • Record second-quarter revenue since 2009 as net revenue rose 49% YoY to $7.16M; management highlighted “very strong first half” and accelerating growth in Q1 and Q2 .
  • Margin expansion: gross margin rose 340 bps to 35.8% on higher-margin mix (Mary Jones) and pricing actions, particularly in Canada after shifting to Dot Foods; management reiterated focus on margin improvements in H2 .
  • Mary Jones momentum: cannabis revenue reached $1.20M (+100% QoQ; +200% YoY) with HD9 products, California rebound, and Canada success; CEO said Mary Jones revenue carries “nearly 100% gross margin” structurally (royalty nature) .

Quoted management highlights:

  • “We just finished a very strong first half… Q2 net revenue increased to 49% growth… $7.2 million” .
  • “Gross profit as a percentage of revenue increased 340 basis points to 35.8%…” .
  • “Our cannabis business generated approximately $1.2 million… nearly 100% gross margin” .

What Went Wrong

  • Operating expenses increased to $4.15M (58.2% of revenue), driving a wider net loss of $(1.57)M and deeper Adjusted EBITDA at $(1.08)M; management attributed this to onetime, front-loaded innovation investments and higher legal spend around Mary Jones .
  • Cash declined to $1.46M at quarter-end and inventory rose to support growth; while subsequent financing mitigates runway risk, near-term cash generation remains a focus point .
  • Variance in reported Walmart mini-can footprint (700 vs. 732 stores) indicates execution details still being standardized across communications; either way, mini-cans are early but promising .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Revenue ($USD Millions)$3.50 $5.00 $7.16
Gross Profit ($USD Millions)$0.68 $1.89 $2.56
Gross Margin %19.5% 37.8% 35.8%
Operating Expenses ($USD Millions)$2.23 $3.04 $4.15
Loss from Operations ($USD Millions)$(1.55) $(1.15) $(1.59)
Net Loss ($USD Millions)$(1.53) $(1.15) $(1.57)
EPS ($USD)$(0.02) $(0.01) $(0.02)
Adjusted EBITDA ($USD Millions)$(1.44) $(0.98) $(1.08)

KPIs and Balance Sheet

MetricQ4 2023Q1 2024Q2 2024
Mary Jones Revenue ($USD Millions)$0.44 $0.60 $1.20
Cash and Equivalents ($USD Millions)$3.87 $2.83 $1.46
Subsequent Financing (Post-Q2)——$3.20 net proceeds raised

Additional operating details (current quarter):

  • Food service revenue doubled to $0.53M (growth priority) .
  • Nuka-Cola Q2 sales totaled $0.93M; DTC website sales from Nuka-Cola were ~$0.40M in Q2 .
  • Core beverage up 8.4%; DTC nearly 2.5x YoY; food service >2x; Canadian pricing actions via Dot Foods aided margins .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024 / H2None providedNo formal guidance; management targeting activation of 5 product launches and continued growth Maintained (no guidance)
Gross MarginQ3 2024None providedDirectional: improvements in June expected to continue into Q3 Maintained (directional only)
OpEx (SG&A)FY 2024None providedElevated near term due to innovation; characterized as onetime set-up to support growth Maintained (framework only)
LiquidityFY 2024$2.0M revolver commitment (Q1) Revolver available; ~$3.2M raised post-Q2; management “comfortable” with liquidity Strengthened

No numerical guidance on revenue, EPS, EBITDA, or tax rate; commentary emphasized margin trajectory, product activation, and growth investments .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023, Q1 2024)Current Period (Q2 2024)Trend
Innovation pipeline (cola/zero, mixers, Pop Jones, Fiesta Jones)Announced Spiked Jones and plan for premium craft mixers; flavored sparkling water test; brand refresh Five H2 launches fast-tracked; teaser at Nitrocross; mixers in 7.5oz; Pop Jones gut-health; Fiesta Jones lower-calorie Accelerating activation
Mary Jones (HD9 and regulated THC)Canada launch with Tilray; WA top-selling cannabis beverages; HD9 DTC site launched $1.20M Q2 revenue; HD9 shots/gummies e-commerce; California rebound; expansion in Ontario/BC/AB Scaling mix and geography
Food service channelNew division, Dot Foods/Green Nature brokers; early wins (STK, Kona Grill) More than doubled Q2 revenue; expanding infrastructure Building momentum
Supply chain and pricing (Canada)Shift to Dot Foods Canada and broker model; margin upside expected Pricing adjustments in Canada cited in margin expansion Tailwind to margins
Partnerships and brand activationsFallout/Nuka-Cola special release; SLS action sports Nitrocross cola launch; continued special releases; retailer display strategy lift (35x) Expanding visibility
Liquidity/financingExploring LOC/market options; target profitability in H2 $3.2M raised; $2.0M revolver; inventory builds to support growth Improved flexibility (post-Q2)

Management Commentary

  • “We just finished a very strong first half… Q2 net revenue increased to 49% growth… $7.2 million compared to $4.8 million… our growth rate is accelerating” — David Knight, President & CEO .
  • “Gross profit as a percentage of revenue increased 340 basis points to 35.8%… driven by growth in sales of higher-margin Mary Jones products and continued pricing adjustments, especially in Canada” .
  • “Our cannabis business generated approximately $1.2 million… nearly 100% gross margin. Momentum continues to build… excited about these high-margin products becoming a bigger piece of our revenue split” .
  • “We have invested almost $600,000 into these innovation initiatives… geared up to produce in the next 60 days… setting us up for robust growth in the quarters to come” .
  • “We also have access to a $2 million revolving credit facility… we have raised approximately $3.2 million in an oversubscribed private placement to further support our growth” .

Q&A Highlights

  • The published Q2 transcript primarily contained prepared remarks and did not include a Q&A section; management invited questions and then passed to the operator, but no Q&A content was captured in the transcript provided .
  • For context from prior quarter Q&A (Q1): financing runway, Spiked Jones expansion markets, and Michigan timing for Mary Jones were discussed, with management indicating sufficient liquidity near term and H2 Michigan entry plans .

Estimates Context

  • Attempts to retrieve S&P Global consensus EPS and revenue estimates for Q2 2024 were unsuccessful due to data access limitations; as a result, we cannot benchmark JSDA’s Q2 results versus Street consensus at this time. Consider using company-reported YoY and sequential comparisons until consensus access is restored.
  • Given accelerating product launches and mix shifts, near-term estimate adjustments (once available) may focus on revenue trajectory in beverages and Mary Jones contribution, with gross margin implications from higher-margin products and Canadian pricing actions .

Key Takeaways for Investors

  • Revenue momentum is real: two strongest growth quarters since 2009; H2 catalysts include five launch activations and broader retail/display strategies — watch sell-through and shelf placement to gauge sustainability .
  • Mix-driven margins: Mary Jones growth (royalty/near-100% margin per mgmt) and Canadian pricing actions underpin mid-30s GM; monitor the margin trajectory into Q3 as indicated by June improvements .
  • Investment phase trade-off: SG&A elevated due to onetime innovation spend; expect operating leverage to improve as launches scale and food service ramps (Dot Foods, brokers), but near-term losses may persist .
  • Liquidity improved post-Q2: $3.2M raised and $2.0M revolver provide flexibility to fund inventory and activation; cash management remains a key watch item given increased working capital needs .
  • DTC and special releases are working: Nuka-Cola delivered ~$0.93M in Q2 sales and strong DTC; continued IP partnerships could be a recurring top-line driver .
  • Execution focus: Mini cans launched in ~700–732 Walmart stores; display-driven lifts (35x) suggest merchandising excellence can materially impact velocity — track flavor expansion and Canadian rollout next .
  • With Street estimates unavailable, the stock narrative likely pivots on tangible activation milestones, Mary Jones geographic expansion, and margin prints in upcoming quarters; prepare for potential volatility around product launch headlines and subsequent sell-through data .