SunOpta (SOY) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 9.3% year-over-year to $202 million, driven by 12% volume growth across all segments, partially offset by price reductions and exit from smoothie bowls.

• Adjusted EBITDA reached $22.4 million, up 2–2.4% year-over-year, with adjusted EPS doubling to $0.04.

• Net earnings attributable to common shareholders rose 91% to $4.7 million, with strong cash flow from operations at $22.3 million, up from $7.4 million.

• The business demonstrated resilience through diversified categories, channels, and a robust new business pipeline now at 25% of annual sales.

• Operational progress included unlocking manufacturing capacity and implementing a four-point plan to improve gross margin.

Financial highlights

• Q1 revenue was $202 million, up 9.3% year-over-year; gross profit was $30.3 million, down 2.4% from the prior year.

• Adjusted gross margin was 15.3%, down from 17% last year, reflecting investments and temporary inefficiencies.

• Adjusted EBITDA increased to $22.4 million from $21.9 million; adjusted EBITDA margin was 11.1%.

• Earnings from continuing operations were $4.8 million, up from $3.8 million; adjusted EPS was $0.04 versus $0.02.

• Debt reduced to $260.6 million, leverage at 2.9x, with strong operating cash flow of $22.3 million.

Outlook and guidance

• FY2025 revenue guidance raised to $788–$805 million (9–11% growth); adjusted EBITDA guidance raised to $99–$103 million (12–16% growth).

• Free cash flow expected at $25–$30 million, with all allocated to debt repayment; leverage target of 2.5x by year-end.

• Long-term targets: annual revenue growth of 8–10%, adjusted EBITDA growth of 13–17%, and ROIC of 16–18% by end of 2026.

• Gross margin expected to improve sequentially, reaching 18–19% in Q4 2025 and 20%+ in 2027.

• Management confident in achieving 2026 revenue and adjusted EBITDA growth rates near long-term targets.