Arcadia Biosciences (RKDA) Q1 2025 earnings summary

Executive summary

• Revenues grew 22% year-over-year in Q1 2025, driven by a 90% increase in Zola coconut water sales and 70% growth in distribution.

• Net income attributable to common stockholders reached $2.6 million, a $5.0 million improvement from a $2.4 million loss in Q1 2024, driven by higher Zola sales and one-time gains.

• The company exited its legacy agtech business, monetized intellectual property, and eliminated related liabilities.

• The pending business combination with Roosevelt Resources is progressing, with an amended agreement fixing the equity share ratio at 90-10 and an expected close around August 15, 2025.

• Completed the sale of the GoodWheat brand and RS durum wheat trait, resulting in strategic realignment and discontinued operations reporting.

Financial highlights

• Q1 2025 total revenues were $1.2 million, up 22% year-over-year, entirely from Zola coconut water.

• Net income from continuing operations was $2.6 million, compared to a $947,000 loss in Q1 2024.

• Operating expenses fell 74% year-over-year to $670,000, aided by a $750,000 gain on sale of intangible assets and a $1.0 million gain from contingent liability reduction.

• Gross margin was 43% in Q1 2025, compared to 52% in Q1 2024, marking the ninth consecutive quarter above 30%.

• Ended Q1 with $3.2 million in cash, down from $4.2 million at year start, with a current note receivable of $2.0 million.

Outlook and guidance

• Anticipates completion of the Roosevelt Resources business combination by the end of summer, subject to stockholder approval.

• New distribution pipeline for Zola represents about half of current distribution (approx. 3,500 stores), with new accounts expected to impact 2025 financials.

• Anticipates minimal impact from new 10% tariffs due to identified cost savings, but management expresses substantial doubt about the ability to continue as a going concern due to insufficient liquidity for the next 12 months.

• May seek additional funding through debt or equity; failure to secure funding or complete the Roosevelt transaction could result in severe liquidity constraints.

• Expects continued revenue growth and gross margins trending toward low 30% range.