Freshpet (FRPT) investor relations material

Executive summary

• Net sales for Q2 2026 increased 15.5% year-over-year to $305.6 million, driven by volume gains and strong omni-channel expansion, with adjusted EBITDA up to $52.2 million.

• Net income rose to $19.5 million from $16.4 million, aided by higher sales and a gain on equity investment.

• Market share in US dog food and treats reached 4.3%, with MVP consumers accounting for 71% of sales and household penetration expanding.

• Continued investment in long-term opportunities, innovation, and manufacturing capacity while maintaining discipline in growth, profitability, and capital returns.

• For the first six months of 2026, net sales were $603.2 million, with net income at $68.0 million, largely due to a $66.6 million gain on the sale of a non-controlling equity investment.

Financial highlights

• Adjusted gross margin improved to 48.6% from 46.9% a year ago, with gross profit margin at 42.1% and adjusted EBITDA margin at 17.1%.

• Operating cash flow for Q2 was $44.4 million, with free cash flow at $14.7 million; YTD operating cash flow reached $84.8 million and free cash flow $27.4 million.

• SG&A expenses were $107.0 million (35.0% of net sales), with adjusted SG&A at 31.4%; media spend was 13.4% of net sales.

• Cash and cash equivalents as of June 30, 2026, were $350.8 million, with $398.4 million in debt outstanding.

• Diluted EPS for Q2 2026 was $0.39, up from $0.33 in Q2 2025.

Outlook and guidance

• 2026 net sales growth expected at 10–12% (up from 8–11%), with adjusted EBITDA guidance raised to $210–$220 million.

• Adjusted gross margin for 2026 expected to improve by 100–150 basis points, with a 2027 target of at least 49%.

• Adjusted EBITDA margin for 2027 expected in the 20–22% range.

• Capital expenditures for 2026 projected at ~$150 million, focused on capacity expansion and operational efficiency.

• Management expects to fund growth and operations through cash flow, with flexibility to access capital markets if needed.