On November 6, 2024, Zevia PBC (ZVIA, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. Zevia PBC, a company known for its zero-calorie, zero-sugar beverages, reported a net sales decline to $36.4 million, falling short of the analyst estimate of $39.20 million. However, the company showed significant improvement in its net loss, which narrowed to $2.8 million, compared to a loss of $11.3 million in the same quarter last year.
Company Background
Zevia PBC is a beverage company that offers a range of naturally sweetened, zero-calorie drinks. Its product lineup includes soda, energy drinks, organic tea, mixers, kidz drinks, and sparkling water, distributed across the U.S. and Canada through various retail channels. The company primarily generates its revenue from the United States.
Performance and Challenges
Despite a 15.6% year-over-year decrease in net sales, Zevia PBC managed to improve its gross profit margin to 49.1%, up from 45.4% in the previous year. This improvement was attributed to lower inventory write-downs and favorable unit costs. The decline in sales was primarily due to lost distribution in the club channel and reduced volumes from one mass channel customer, compounded by increased promotional activities.
Financial Achievements
Zevia PBC's financial achievements include a significant reduction in net loss and adjusted EBITDA loss, which improved by $8.4 million and $7.6 million year-over-year, respectively. The company's strategic initiatives, such as the Productivity Initiative, are expected to yield $15 million in annual cost savings, which will be reinvested in growth initiatives.
Key Financial Metrics
Key financial metrics from the third quarter include:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $36.4 million | $43.1 million |
| Gross Profit Margin | 49.1% | 45.4% |
| Net Loss | $2.8 million | $11.3 million |
| Adjusted EBITDA Loss | $1.5 million | $9.1 million |
| Loss Per Share | $0.04 | $0.16 |
Balance Sheet and Cash Flow
As of September 30, 2024, Zevia PBC reported $32.7 million in cash and cash equivalents, with no outstanding debt and an unused credit line of $20 million. The company also noted a decrease in inventories and accounts payable, reflecting improved operational efficiencies.
Analysis and Outlook
Zevia PBC's performance in the third quarter highlights its ability to manage costs effectively despite a challenging sales environment. The company's focus on expanding distribution, particularly with Walmart, is expected to drive future sales growth. The improved financial metrics, such as gross profit margin and reduced losses, indicate a positive trajectory towards profitability.
We are very pleased to have delivered vast improvements in net loss and adjusted EBITDA, despite coming in slightly below our net sales expectations," said Amy Taylor, President and Chief Executive Officer. "Through the strong execution of our Productivity Initiative, we now expect to achieve $15 million in annual cost savings, the majority of which we plan to reinvest in growth initiatives."
Looking ahead, Zevia PBC anticipates resuming net sales growth in the fourth quarter, supported by expanded distribution and strategic marketing efforts. The company's commitment to product innovation and sustainable distribution expansion positions it well for long-term growth in the competitive non-alcoholic beverage industry.
Explore the complete 8-K earnings release (here) from Zevia PBC for further details.
