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 improved to $35.5 million from $30.6 million year-over-year, with margin at 13.5%.

• 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% YoY, adding 1.6 million households; MVP households up 21% YoY, now 69% of sales.

• Despite macroeconomic headwinds, the business continues to outperform the category, especially among higher-income and e-commerce consumers.

Financial highlights

• Adjusted gross margin was 45.7% (up from 45.3%); GAAP gross margin held at 39.4%.

• SG&A expenses rose to $115.3 million (43.8% of sales), up from $79.7 million (35.6%), due to increased media spend, share-based compensation, and non-recurring items.

• Operating cash flow was $4.8 million; cash and equivalents stood at $243.7 million as of March 31, 2025.

• Capital expenditures for Q1 were $26.5 million, with 2025 spend focused on new capacity.

• Q1 2025 net loss was $12.7 million, impacted by non-recurring charges including distributor liquidation and legal accruals.

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 lowered to $190–$210 million from at least $210 million.

• Capital expenditures projected at ~$225 million for 2025, down from ~$250 million.

• Free cash flow positive expected in 2026; sequential net sales and EBITDA improvement anticipated through 2025.

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