Freshpet (FRPT) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached $263.2 million, up 18% year-over-year, driven by 14.9% volume growth and favorable price/mix.

• Adjusted EBITDA for Q1 was $35.5 million, a 16% increase year-over-year.

• Net loss was $12.7 million, compared to net income of $18.6 million in Q1 2024, mainly due to higher SG&A and non-recurring charges.

• Household penetration grew 13% year-over-year to 14.1 million, with MVP households up 21% to 2.2 million, representing 69% of sales.

• Despite macroeconomic headwinds, the business continues to outperform its category, with strong e-commerce and MVP household growth.

Financial highlights

• Adjusted gross margin for Q1 was 45.7%, up from 45.3% prior year; GAAP gross margin held steady at 39.4%.

• Adjusted SG&A was $84.7 million (32.2% of sales), up from $70.9 million (31.7%), mainly due to increased media spend.

• Operating cash flow for Q1 was $4.8 million; cash on hand at quarter-end was $243.7 million.

• Capital expenditures for Q1 were $26.5 million.

• Q1 2025 net loss was $12.7 million, impacted by higher SG&A and non-recurring charges.

Outlook and guidance

• 2025 net sales guidance revised to $1.12–$1.15 billion (15–18% growth), down from $1.18–$1.21 billion.

• Adjusted EBITDA guidance for 2025 is $190–$210 million, with capital expenditures projected at $225 million.

• Sequential net sales and EBITDA improvements expected throughout the year; free cash flow positive targeted for 2026.

• Modest gross margin expansion anticipated; no material inflation or pricing actions expected.

• 2027 targets: $1.8 billion net sales, 48% adjusted gross margin, 22% adjusted EBITDA margin, 20 million households.