Freshpet (FRPT) Q4 2025 earnings summary

Executive summary

• Net sales grew 13% in 2025, surpassing $1.1 billion for the first time, with growth outpacing the pet food category and expanded margins.

• Achieved positive free cash flow of $12.4 million, a year ahead of plan, reflecting improved operational and capital efficiency.

• Net income rose to $139.1 million in 2025, up from $46.9 million in the prior year, driven by a $68.4 million deferred tax benefit.

• E-commerce business grew nearly 40% and now represents 14% of total sales.

• Household penetration increased, with 1.3 million new households and MVP (heavy user) base up 11% to 2.4 million.

Financial highlights

• FY 2025 net sales reached $1.102 billion, up 13% year-over-year; Q4 net sales were $285.2 million, up 8.6%.

• Adjusted EBITDA for 2025 was $195.7 million (17.8% margin), up from $161.8 million (16.6%) in 2024; Q4 adjusted EBITDA was $61.2 million.

• Adjusted gross margin for 2025 was 46.7%, up 20 bps; Q4 adjusted gross margin was 48.4%.

• Operating cash flow for 2025 was $160.6 million; year-end cash was $278 million, rising to ~$400 million after $95.5 million proceeds from Ollie sale.

• SG&A expenses for 2025 were $374.0 million (33.9% of net sales), down from 36.7% in 2024.

Outlook and guidance

• 2026 net sales growth expected between 7%-10%; adjusted EBITDA guidance: $205-$215 million (up 5%-10%).

• Adjusted gross margin expected to improve by 50–100 basis points in 2026.

• Capital expenditures projected at ~$150 million for 2026, excluding potential incremental investments in technology or retail expansion.

• Free cash flow positive status expected to continue in 2026.

• 2027 targets: net sales growth above category, adjusted gross margin at least 48%, adjusted EBITDA margin 20%-22%.