Zevia Q2 2026 Earnings Call Transcript

On Wednesday, Zevia (NYSE: ZVIA ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

5 million, surpassing expectations. The company launched a high-profile marketing campaign featuring Cardi B, resulting in significant social media engagement and media impressions. CEO Alexandre Ruberti outlined strategic priorities, including evolving the go-to-market strategy, enhancing brand identity, maintaining financial discipline, and establishing a performance-driven culture. Zevia plans to focus on expanding the singles platform, improving distribution, and in-store execution to drive consumer discovery and trial.

The company expects Q3 2026 net sales of $44 to $46 million and maintains full-year guidance with net sales of $170 to $175 million and adjusted EBITDA of negative $2 to negative $4 million. Operational highlights include a new packaging and flavor rollout and a marketing strategy aimed at younger, wellness-aspirational consumers. Management emphasized the importance of improving financial discipline and operational efficiency to support sustainable growth initiatives. Full Transcript OPERATOR (Operator) Greetings.

Welcome to the Zevia PBC second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Please note this conference is being recorded. I will now turn the conference over to Jean Fontana of Investor Relations. Thank you, Jean. You may begin.

Jean Fontana, Investor Relations Thank you, and welcome to Zevia's second quarter 2026 earnings conference call. On today's call are Alexandre Ruberti, President and Chief Executive Officer, and Girish Satya, Chief Financial Officer and Principal Accounting Officer. By now everyone should have access to the company's second quarter 2026 earnings press release and investor presentation made available this afternoon. com.

Before we begin, please note that all financial information presented on today's call is unaudited. Certain comments made on this call include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call, we will reference certain non-GAAP financial measures as we describe business performance. com. And now I'd like to turn the call over to Alexandre.

Alexandre Ruberti, Chief Executive Officer Good afternoon, everyone, and thank you for joining us today. It's a privilege to speak with you on my first earnings call as CEO. Before I begin, I would like to thank Amy Taylor for her leadership and her support during this transition. I am excited to lead Zevia as I believe that we have a truly distinct product within the better-for-you beverage category.

As a member of the Board of Directors, I have gained valuable insights into the transformation that has taken place over the last two years, and I'm grateful for the opportunity to lead the company into the next chapter. My objective is to build on the work that has strengthened the foundation of our business, drawing from my beverage industry experience to accelerate growth and drive profitability while reinvesting in the future. We believe that Zevia's truly distinct market position presents a tremendous opportunity that we have yet to capture.

We are working aggressively to build a strategic plan that we believe will deliver breakthrough growth, sustainable performance for the business, and drive long-term value for all stakeholders. Before sharing my initial observations, let me briefly highlight our results, which Girish will speak to in more detail. For the second quarter we delivered net sales of $45 million at the high end of our guidance and adjusted EBITDA of half a million dollars, above our expectations. We are encouraged by our progress year to date and the momentum going into the third quarter.

We continue to make progress in driving awareness and trials through distribution and completed the rollout of our new packaging and flavors. That said, we have a significant opportunity to drive improvement in our go-to-market execution, which I will speak to shortly. Turning to marketing, we launched the anticipated 360 campaign of Refreshingly Real, starring Cardi B as our Real Talk interpreter. 8 billion PR earned media impressions, and 473 media placements.

We plan to build on this momentum with additional campaigns, including upcoming Refreshingly Real Context. I look forward to keeping you posted on more upcoming events with Zevia and Cardi B. Now, turning to my observations and priorities: For the last month and a half, I have spent much of my time meeting with our executive team and employees, as well as our customers, suppliers, and investors. Following my listening tour and a deep dive into the business, my belief in Zevia's potential is greater than ever.

I also recognize that there are measures that need to be taken to convert our strengths into sustained momentum in our business. To accomplish this, we need to make it easier to find with targeted strategic distribution expansion, easier to buy through enhanced in-store execution, and easier to choose by amplifying awareness and brand relevance. And we shall do so with urgency as we develop a strategic plan for our path forward. Drawing from my broad experience, I will be focused on four key areas.

First, evolving our go-to-market strategy. Second, sharpening and scaling our brand identity. Third, maintaining strong financial discipline and operational efficiency to support our sustainable growth initiatives. And fourth, establishing a performance-driven culture.

I'd like to expand on each of these areas and provide some additional context, starting with evolving our go-to-market strategy. We see a significant opportunity to expand the reach and productivity of the Zevia brand through three areas: optimizing our singles platform, expanding distribution, and improving in-store execution. The first and most meaningful value-creation opportunity is unlocking the full potential of singles in-store. We view singles as the most effective vehicle for driving consumer discovery, trial, and ultimately household penetration.

Over the past year we have focused on refining the product format, optimizing our flavor assortment with the right balance of the classic favorites and emerging trends, and improving taste as consumers increasingly seek healthy beverage alternatives without sacrificing taste. Singles represent a powerful entry point into the brand and a catalyst for driving trial and long-term customer acquisition. Second, with an improved product portfolio, we see substantial opportunities to expand distribution and increase brand availability.

Despite our good position within the zero-sugar soda category, Zevia remains underpenetrated across several attractive channels including mass, club, foodservice, value-chain retail, and e-commerce. We believe our enhanced singles platform improves our ability to secure new distribution gains, with increasing visibility and accessibility for consumers. Expanding our presence where consumers shop remains a critical lever for driving both awareness and trial. The third component of our go-to-market strategy is improving productivity within existing doors through a stronger approach to in-store execution, merchandising, and category management.

And to be frank, we need to do a better job of activating Zevia. We believe improved execution can increase velocity, support retailer economics, and strengthen our position as a key growth driver within the beverage category. This leads to our second strategic focus area: sharpening and scaling our brand identity. Over the past several years we have made meaningful progress in defining what Zevia stands for, but we believe there is opportunity to further increase the precision and relevance of our position.

We are moving beyond the broad concept of the health-involved consumer and developing a more focused understanding of our core customers. We see our target consumer as wellness-aspirational, younger, digitally engaged families who enjoy beverages and flavors they love but are increasingly unwilling to compromise on ingredient quality or health considerations. They want the enjoyment of soda without the trade-off. As we continue to refine our positioning around this consumer, we intend to support it with a disciplined, ROI-driven marketing strategy designed to increase awareness, strengthen brand affinity, and improve customer acquisition efficiency.

By pairing a more clearly defined brand identity with broader distribution and stronger execution, we believe we can meaningfully expand Zevia's addressable market and accelerate sustainable, profitable growth over time. Our third area of focus: financial discipline and operational efficiency. We aim to build on the success of our positive financial momentum and drive profitable innovation across functions. This will be achieved through maximizing or redirecting resources to align with strategic priorities as we reinvest savings from continuing efficiency.

Our final area of focus is to establish a performance-driven culture within the organization, delivering results not just for today, but over the mid and long term. We will challenge each other to improve, take ownership, make confident decisions, and learn quickly from setbacks so we can keep raising the bar together, without losing the essentials of trust, empowerment, and accountability. Before I turn it over to Girish, I want to thank everyone for the warm welcome I have received since stepping into this role. I believe we are operating from a better financial position, as shown by improved cash flow and positive EBITDA over the last few quarters.

I will share our strategic plan in the coming months with further details on our four key focus areas. As part of this plan, we will outline clear, measurable milestones and provide regular updates on our progress. I look forward to working with our talented team as we realize Zevia's great potential. We have an exciting future in front of us.

With that, I will turn it over to Girish. Girish Satya, Chief Financial Officer Thank you, Alexandre. Good afternoon, everyone, and thanks for joining our call today. Before we get into the quarter, I'd just like to take a moment to welcome Alexandre to the Zevia team.

It's been a pleasure working more closely with him since he transitioned into the CEO role, and I look forward to the partnership. Echoing his remarks, with our vastly improved financial profile, coupled with our increased supply chain efficiencies and cost disciplines, we have a strong foundation from which to build the next phase of growth for the brand. 1% to 45 million, primarily driven by successful pricing actions. Our results also reflect the lapping of load-ins to Walgreens and Albertsons in the second quarter of last year, as well as a shift in cadence with higher volumes anticipated in the first and third quarters versus last year.

1 million, including the discontinuation of our tea offering, which began in Q2. 7% in the prior-year quarter. The improvement reflects strong price realization, partially offset by increases in aluminum costs, from which we expect to see a bigger impact in the back half of the year. 4 million, or 30% of net sales in the second quarter of 2025.

4% of net sales in the second quarter of 2025. The 150-basis-point improvement reflects savings in warehousing and repackaging costs, partially offset by increased fuel costs. 6% of net sales in the second quarter of 2025. The increase in marketing expense as a percentage of sales as compared to last year was due to higher planned investments in the second quarter to support our new product rollout, package redesign, and Cardi B partnership.

2% of net sales in the second quarter of 2025. The increase was primarily due to higher personnel-related costs and outside services expenses, partially offset by lower accrued variable compensation. 2 million in the prior-year period. 5 million versus the prior-year period despite significant cost pressures.

5 million in cash and cash equivalents and have an undrawn revolving credit line of 20 million. Now turning to our outlook, starting with the third quarter of 2026, we expect net sales of between 44 million to 46 million, reflecting 10% growth at the midpoint of the range. This guidance incorporates increased club distribution, ongoing strength in digital, and the benefit of incremental promotional support for the national rollout of our packaging refresh, partially offset by the discontinuation of our tea offering. 5 million.

This assumes a reduction in gross margin to approximately 46% due primarily to the impact of elevated aluminum costs and higher promotions and channel mix. Additionally, this reflects pressure on selling expense related to higher fuel costs, as well as higher marketing investment associated with the Cardi B campaign launch and the rollout of the new product packaging nationwide. Looking at the full year, we are maintaining our 2026 net sales guidance of 170 to 175 million, reflecting 7% growth at the midpoint of the range. 5-percentage-point impact from the discontinuation of tea.

As Alexandre outlined in his discussion, we are amplifying efforts to drive materially accelerated growth across our business, but predominantly through an improved go-to-market strategy. We have identified a number of opportunities across our distribution channels; however, realize that it will take time to bear fruit. Turning to profitability, we are maintaining our full year 2026 adjusted EBITDA range of negative 2 to negative 4 million. As a reminder, due to ongoing macro volatility, this range continues to incorporate approximately 11 million related to the surge in fuel prices and higher aluminum-related costs.

While we expect these elevated costs to come down over time, we are on track to achieve 3 to 5 million in additional cost savings beginning in Q1 of 2027. In closing, we believe that we have a distinct market position which presents a tremendous opportunity that we have yet to capture. We remain confident in our path forward and our focus on executing a strategic plan to improve profitability through enhanced commercial execution, financial discipline, and targeted investments to strengthen our capabilities and create sustainable, long-term value for all shareholders. I'll now turn it over to the operator to begin Q&A.

Operator. OPERATOR (Operator) Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Our first question is from Andrew Strelczyk with BMO Capital Markets. Please proceed with your question. Andrew Strelczyk, Analyst at BMO Capital Markets Hey, good afternoon. Thanks for taking the questions.

You know, I appreciate all the detail on some of the opportunities that you discussed already, but, and you mentioned kind of that it's going to take some time for that to play out.