Flow Beverage (FLOW) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue rose 38% year-over-year to $11.4 million, driven by a 216% increase in co-pack revenue, while Flow brand revenue declined 5% due to exited unprofitable channels and production disruptions.

• Gross margin improved to 21% from negative 15% last year, reflecting operational efficiencies and a focus on higher-margin channels.

• Adjusted EBITDA loss narrowed to $2.6 million from $9.7 million year-over-year, aided by cost controls and lower SG&A and G&A expenses.

• Operational milestones include partnerships with Inter Miami CF and Las Vegas Lights FC, and the addition of José Bautista as a strategic advisor and investor.

• Retail presence expanded to over 80,000 doors in North America.

Financial highlights

• Co-pack net revenue surged 216% to $5.2 million, while Flow brand net revenue declined to $6.2 million due to production challenges.

• Gross profit reached $2.4 million, reversing a loss of $(1.3) million in the prior year.

• Net loss for Q1 2025 was $8.4 million, a significant improvement from $15.4 million in Q1 2024.

• General and administrative expenses decreased 50% year-over-year to $2.5 million.

• Salaries and benefits increased 15% due to U.S. sales team expansion.

Outlook and guidance

• Full-year 2025 targets: net revenue of $72–$82 million, gross margin of 38–48%, and adjusted EBITDA of $6–$11 million.

• Q2 expected to remain challenged with mild EBITDA loss, but Q3 and Q4 projected to show strong operating leverage and profitability as production issues are resolved and new product launches contribute.

• Sparkling mineral water in glass bottles on track for Q3 launch, with initial revenue in Q2 and full rollout in summer.

• Management anticipates sequential profitability improvements in fiscal 2025, focusing on profitable channels and co-pack agreements.

• Growth to be driven by Flow Sparkling launch, co-pack scale, and increased capacity utilization.