Freshpet (FRPT) Q4 2025 earnings summary

Executive summary

• Net sales grew 13% year-over-year in 2025, surpassing $1.1 billion for the first time, despite a slowdown in the pet food category and consumer sentiment shifts.

• Positive free cash flow of $12.4 million was achieved a year ahead of plan, reversing a negative $32.8 million in 2024 and demonstrating improved operational and capital efficiency.

• Adjusted EBITDA rose 21% to $195.7 million, with margin expansion and operational improvements contributing to profitability gains.

• Market share increased, with significant gains in digital and omnichannel channels, and household penetration reached 15.2 million, up 10%.

• Strategic investments in manufacturing technology and omnichannel presence are expected to drive future growth.

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

• 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.

• Net income for 2025 was $139.1 million, up from $46.9 million in 2024, aided by a $68.4 million deferred tax benefit.

• Capital expenditures for 2025 were $148.2 million; year-end cash was $278 million, rising to ~$400 million after the $95.5 million Ollie sale.

Outlook and guidance

• 2026 net sales growth expected between 7% and 10%; adjusted EBITDA guidance: $205–$215 million.

• Capital expenditures projected at ~$150 million, with potential for $20–$50 million more if technology or fridge expansion accelerates.

• 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%.