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Zevia PBC (ZVIA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 net sales were $38.0M, at the high end of guidance and up vs S&P Global consensus; gross margin reached a record 50.1% and Adjusted EBITDA loss improved to $3.3M, meaningfully ahead of guidance due to better-than-expected margin .
  • The company maintained FY 2025 guidance (net sales $158–$163M; Adjusted EBITDA loss $8–$11M) and introduced Q2 guidance ($40.5–$42.5M net sales; Adjusted EBITDA loss $2.2–$2.9M) .
  • Management flagged tariff headwinds of ~200 bps to gross margin but believes upper-40s gross margin is sustainable given product, sourcing, and price-pack actions .
  • Strategic growth pillars—distinctive marketing (Jelly Roll campaign), taste-forward innovation, and distribution expansion (Walmart nationwide, Albertsons BFY set, ~8,000 Walgreens)—were emphasized as drivers of 2H growth trajectories .

What Went Well and What Went Wrong

What Went Well

  • Record gross margin of 50.1% (+440 bps YoY) driven by lower product costs and improved inventory management; Adjusted EBITDA loss of $3.3M beat internal guidance (vs -$5.6M to -$6.0M planned) .
  • Walmart performance strong; Zevia’s new variety pack is the top-selling Zevia SKU in that set, supporting trial and household penetration growth in underpenetrated geographies .
  • Marketing momentum: Jelly Roll “Get The Fake Outta Here” campaign delivered 2.4B earned impressions and record engagement; brand awareness investment funded by productivity savings .
    • “Our new variety pack is now the best-selling Zevia SKU at Walmart…we launched an exciting marketing campaign which drove record engagement.” — Amy Taylor, CEO .

What Went Wrong

  • Net sales declined 2.0% YoY to $38.0M due to higher promotional activity and previously disclosed lost distribution in club and one mass customer, partially offset by pricing and small volume gains .
  • Restructuring expenses of $2.1M (severance) in Q1; elevated marketing spend (16.2% of net sales) pressured near-term profitability even as it supports long-term brand building .
  • Tariffs (primarily aluminum) expected to be a ~200 bps gross margin headwind in Q2–Q3 before mitigation efforts offset in Q3–Q4; price pack architecture changes and sourcing shifts underway .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$36.37 $39.46 $38.02
Gross Profit Margin %49.1% 49.2% 50.1%
Diluted EPS ($)-$0.04 -$0.09 -$0.08
Adjusted EBITDA ($USD Millions)-$1.51 -$3.88 -$3.27

Q1 2025 vs Prior Year (Q1 2024)

MetricQ1 2024Q1 2025
Revenue ($USD Millions)$38.80 $38.02
Gross Profit Margin %45.7% 50.1%
Diluted EPS ($)-$0.10 -$0.08
Adjusted EBITDA ($USD Millions)-$5.47 -$3.27

KPIs and Operating Detail

KPIQ3 2024Q4 2024Q1 2025
Selling & Marketing ($M)$11.98 $16.46 $15.32
Selling & Marketing (% of Net Sales)32.9% 41.7% 40.3%
Marketing Expense ($M)n/an/a$6.2
General & Administrative ($M)$7.38 $6.84 $6.98
Cash & Equivalents ($M)$32.69 $30.65 $27.72

Results vs Wall Street Consensus (S&P Global)

Metric (Q1 2025)ConsensusActualSurprise
Revenue ($USD Millions)$37.31*$38.02 +$0.71* (beat; ~+1.9%)
Primary EPS ($)-$0.10*-$0.0402*+$0.0598* (beat)

Values marked with * retrieved from S&P Global.

Company Guidance vs Internal Plan

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025$158–$163M $158–$163M Maintained
Adjusted EBITDA LossFY 2025$8–$11M $8–$11M Maintained
Net SalesQ2 2025—$40.5–$42.5M New
Adjusted EBITDA LossQ2 2025—$2.2–$2.9M New

Guidance Changes

  • FY 2025 net sales ($158–$163M) and Adjusted EBITDA loss ($8–$11M) reiterated; Adjusted EBITDA now explicitly includes tariff impact, to be mitigated by additional cost efficiencies .
  • Q2 2025 introduced: net sales $40.5–$42.5M; Adjusted EBITDA loss $2.2–$2.9M, reflecting increased marketing and promotions plus tariff costs .

Earnings Call Themes & Trends

TopicQ3 2024 (Prev-2)Q4 2024 (Prev-1)Q1 2025 (Current)Trend
Marketing & BrandShift to distinctive “Break from Artificial”; cost savings funding brand investments Viral holiday campaign; plan to scale platform; increase spend to low double-digit % of sales Jelly Roll campaign; 2.4B impressions; closed-loop attribution, brand health tracking Building momentum; higher near-term opex to drive awareness
Distribution (Walmart, Albertsons, Walgreens)Plan to expand Walmart nationwide; BFY sets emerging Walmart nationwide rollout; BFY shelf at Albertsons Walmart variety packs top SKU; Walgreens ~8,000 stores rolling out in Q2–Q3; Albertsons reset in Q2 Broadening points of sale and trial
Gross Margin & COGS49.1%; benefits from lower write-downs 49.2%; productivity initiative improves margins 50.1% record; tariffs ~200 bps headwind; upper-40s sustainable Strong, with near-term tariff pressure
Tariffs & Macro—Guidance assumes high-40% margins; macro caution Tariff exposure mainly aluminum; ~200 bps GM headwind, mitigation via sourcing/pack-price Manageable headwind
Product InnovationNew flavors; pack innovation discussed Strawberry Lemon Burst planned; seasonal flavors pipeline Strawberry Lemon Burst outperforming; Orange Creamsicle at Sprouts; expanded taste profile Positive consumer response
DSD & ConveniencePilot underway in Northwest Northwest outperforming; expand to Southwest (Crescent Crown AZ) Singles in convenience with sleek cans in DSD regions; branded coolers optional Expanding pilot learnings
Pricing & PPA—Maintain margins with optimized promotions Opportunity to improve price-pack architecture; toggling with productivity gains Targeted optimization
Household Penetration—Repeat >40%; mid-single-digit penetration → runway Walmart additive to penetration; Southeast acceleration; TAM expanding within BFY soda Growing base

Management Commentary

  • “We are pleased to have delivered net sales at the high end of our guidance while meaningfully exceeding our adjusted EBITDA expectations for the first quarter…We are encouraged by the progress we are making as we continue to reinvest cost savings from our Productivity Initiative into building our brand.” — Amy Taylor, CEO .
  • “Gross margins in the upper 40s are sustainable…tariffs will be about a 200 basis point headwind that we will seek to overcome via product portfolio adaptations, price pack architecture, and sourcing.” — Girish Satya, CFO .
  • “Q2 and Q3 are historically the highest volume quarters of the year due to seasonality.” — Girish Satya, CFO .
  • “Our new variety pack…continues to be the top-selling Zevia SKU since its launch.” — Amy Taylor, CEO .

Q&A Highlights

  • Guidance cadence and drivers: FY maintained; growth acceleration expected in 2H via marketing ramp, innovation, Walmart/Albertsons resets, Walgreens rollout, and DSD learnings .
  • Walmart performance: post pipeline-fill, early sell-through encouraging; agility to add new variety packs and flavors mid-year reinforces strategic collaboration .
  • Gross margin sustainability: upper-40s sustainable; tariffs ~200 bps headwind concentrated in Q2–Q3; mitigation actions to offset by Q3–Q4 .
  • Tariff composition: primarily aluminum; secondary stevia and cross-border transport impacts .
  • Pricing strategy: room to optimize price-pack architecture while continuing productivity and efficiency gains; no specific price actions disclosed .

Estimates Context

  • Q1 revenue beat: Actual $38.02M vs consensus $37.31M, +$0.71M (~+1.9%) revenue surprise; EPS beat: Primary EPS -$0.0402 vs consensus -$0.10, +$0.0598. Values retrieved from S&P Global; actual revenue from company press release .
  • Note: Company reports diluted loss per share of -$0.08; S&P Global’s “Primary EPS” (-$0.0402) is not directly comparable to company diluted EPS; use caution when comparing EPS metrics across definitions .

Values marked with * in tables were retrieved from S&P Global.

Key Takeaways for Investors

  • Quality of earnings: Record 50.1% gross margin and Adjusted EBITDA ahead of plan underscore margin resiliency despite promotional intensity; tariff headwinds are quantified (~200 bps) with clear mitigation levers .
  • Growth setup for 2H: Marketing engagement, innovation pipeline, and expanded retail distribution (Walmart, Albertsons, Walgreens) position Zevia for sequential revenue acceleration; Q2/Q3 seasonality favors volumes .
  • Guidance credibility: FY 2025 outlook maintained while Q2 guide implies solid growth vs Q1; ongoing productivity savings fund brand investments while supporting path to profitability .
  • Channel strategy: DSD pilots enabling singles and in-store execution may unlock convenience channel trial; monitor rollout impact on velocity and CAC .
  • Pricing/PPA optionality: Price-pack architecture refinements provide incremental margin levers to offset tariffs and promotions without undermining value positioning .
  • Risk watch: Tariff inflation (aluminum), competitive BFY soda set dynamics, and elevated marketing spend timing could pressure near-term earnings variability .
  • Tactical: Momentum indicators to watch — Walmart sell-through and SKU mix, Walgreens activation timing (Q2–Q3), Albertsons shelf reset impact, and gross margin progression vs tariff timeline .

Financial Appendices

Detailed Q1 2025 Operating Metrics

MetricQ1 2025
Net Sales ($USD Millions)$38.02
Gross Profit ($USD Millions)$19.04
Gross Profit Margin %50.1%
Selling & Marketing ($USD Millions)$15.32
Marketing Expense ($USD Millions)$6.20
General & Administrative ($USD Millions)$6.98
Equity-based Compensation ($USD Millions)$0.73
Restructuring ($USD Millions)$2.14
Diluted EPS ($)-$0.08
Net Loss ($USD Millions)$6.37
Adjusted EBITDA ($USD Millions)-$3.27
Cash & Equivalents ($USD Millions)$27.72
Debt ($USD Millions)$0; $20M undrawn revolver

Additional Context (Prior Quarters)

  • Q4 2024: Revenue $39.46M; GM 49.2%; Diluted EPS -$0.09; Adjusted EBITDA -$3.88M .
  • Q3 2024: Revenue $36.37M; GM 49.1%; Diluted EPS -$0.04; Adjusted EBITDA -$1.51M .

Non-GAAP Note

  • Adjusted EBITDA excludes other income/expense, taxes, D&A, equity-based compensation, and restructuring; reconciliations provided in the release .