Jones Soda Q2 2026 Earnings Report

Jones Soda EPS Results

• Actual EPS: -$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Jones Soda Revenue Results

• Actual Revenue: $10.17 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Jones Soda Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 8:30AM ET

Jones Soda (OTCMKTS:JSDA) Co. is a Seattle-based beverage company known for its craft sodas featuring unconventional flavors and personalized label artwork. Founded in 1995, the company produces a variety of carbonated soft drinks, including its signature Tomato, Creamy Red & Black, and Blue Bubblegum flavors, alongside diet and zero-sugar alternatives. In addition to traditional soda offerings, Jones Soda has expanded its portfolio to include energy drinks, sparkling waters and limited-edition seasonal flavors that cater to niche consumer preferences.

Beyond its core product lineup, Jones Soda operates a direct-to-consumer ecommerce platform that allows customers to create custom photo labels for special occasions and corporate events. The company also partners with retail and foodservice distributors across North America, supplying grocery chains, specialty retailers, convenience stores and restaurants. Through collaborative marketing initiatives and co-branding agreements, Jones Soda extends its reach into lifestyle and pop-culture segments, engaging fans with social media campaigns and community-driven design contests.

Originally established by entrepreneurs Peter Van Stolk and Tod Heaven, Jones Soda built its reputation on bold branding and grassroots marketing strategies. The company continues to leverage its founding ethos of creativity and innovation under the direction of its management team, maintaining a focus on product development and customer engagement. While primarily serving the United States and Canada, Jones Soda selectively explores international partnerships to introduce its unique flavor portfolio to new markets.

Jones Soda Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Full-year guidance was raised to approximately 80% revenue growth from 60%, and the company introduced guidance for positive adjusted EBITDA in fiscal 2026.
• Positive Sentiment: Second-quarter revenue increased 108% to $10.8 million, driven largely by Fallout products, while six-month adjusted EBITDA improved to a $0.2 million profit from a $1.7 million loss a year earlier.
• Positive Sentiment: Management reported strong sell-through for Fallout, Walmart four-packs, and Jones Zero Sugar, and expects expanded distribution of Zero Sugar products and additional Fallout launches.
• Neutral Sentiment: The Rap Snacks collaboration is expected to launch in the first or second quarter of 2027, targeting convenience stores, bodegas, second-tier grocers, and other channels where Jones has limited presence.
• Negative Sentiment: Gross margin fell to 27.5% from 33.3% because of higher freight and oil costs, while HD9 sales declined sharply amid regulatory challenges; management expects margin recovery into the 30% range if oil prices remain near current levels.

Presentation

[Operator]

Morning, everyone, and thank you for participating in today's conference call to discuss Jones Soda's financial results for the second quarter ended June 30th, 2026. Before we begin, let me remind everybody of the company's Safe Harbor disclaimer. Certain portions of our comments today will concern future expectations, plans, and prospects of the company that constitute forward-looking statements for the purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, continue, projects or targets, and negatives of these words and similar words and expressions. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated by forward-looking statements.

[Operator]

Factors that could affect our actual results include, among other things, those that are discussed under the heading Risk Factors in our most recently filed reports with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q and our current reports on Form 8-K. In addition, this call includes discussions of certain non-GAAP financial measures, including adjusted EBITDA.

[Operator]

The most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on the company's website under Investor Relations. A telephone replay will be available after the call through August 27, 2026, and a webcast replay of today's webinar will also be available for one year via the link provided in today's press release, as well as on the company's website. I would now like to turn the call over to Jones Soda CEO, Scott Harvey. Thank you. Sir, you may begin.

[Scott Harvey, President and CEO at Jones Soda]

Thank you, Sherry. Good morning, everyone. Thank you for joining our second quarter 2026 earnings call. During the second quarter, we continued to make strong progress through discipline and improved execution across the business, while remaining focused on the areas we believe will drive sustainable growth and improve profitability. That progress, combined with the performance we're seeing across the business, gives us confidence to increase our full-year fiscal 2026 revenue growth expectation from 60% to approximately 80%. In addition, we're introducing a full-year adjusted EBITDA guidance and expect to deliver positive adjusted EBITDA for fiscal 2026. Turning to the second quarter, we reported revenue of $10.2 million, representing a growth of more than 100%. While the timing of certain shipments impacted second quarter revenue, the underlying strength of our business and commercial pipeline continued to build throughout the quarter.

[Scott Harvey, President and CEO at Jones Soda]

Brian will take you through the financials in a few minutes, but before he does, I want to spend some time on what's driving the business, where we're seeing opportunities, and what we're focused on for the balance of the year. Our focus over the past 18 months has been pretty straightforward. Improve execution, grow our core business, and make Jones a stronger and more profitable company. Our craft soda business remains the foundation of Jones. At the same time, we're looking for smart ways to expand where we can compete, whether that's through Zeros, new channels, or partnerships that can introduce Jones to new consumers. One area that's becoming increasingly important to our growth is branded collaborations. After the quarter ended, we announced a new collaboration with Rap Snacks, and we're really excited about what these two brands can do together.

[Scott Harvey, President and CEO at Jones Soda]

When you look at Jones and Rap Snacks, there's a lot of similarities. Both brands have been around for decades. Both have incredible, loyal consumers. Both have built their brands by doing things differently and staying authentic to who they are. Jones has always been about craft soda, bold flavors, and pop culture. Rap Snacks has spent 30 years connecting some of hip-hop's biggest artists with consumers through food and culture. Bringing those two together gives us an opportunity to create something pretty unique. Our initial launch will feature three custom craft sodas supported by artist collaborations, retail activations, and marketing across both brands. For me, the bigger opportunity is where we go from here. We don't look at Rap Snacks as simply another limited edition product.

[Scott Harvey, President and CEO at Jones Soda]

We see the potential for a much broader partnership that can help us reach new consumers, open new doors at retail, and create incremental growth for Jones. It also starts to show how we can extend Jones into broader consumer lifestyle opportunities over time. We expect Rap Snacks to begin contributing revenue in fiscal 2027. That's really why branded collaborations have become an important part of how we're growing Jones. It's not just about putting together products on a shelf. The right partnerships introduce Jones to new consumers, create excitement around the brand, and give us opportunities with retailers that we may not have had on our own. I think this has become a real strength for Jones. We've built a track record of taking great brands and creating something with them that's different, authentic, and gets consumers excited.

[Scott Harvey, President and CEO at Jones Soda]

We've demonstrated that with Fallout, we've seen it with Crayola, and we believe Rap Snacks gives us another opportunity to build on that success. There are a lot of companies that can put two logos on a package. What I think Jones and what we do really well is create something that consumers actually want to be part of. We're also continuing to build on our other successful collaborations. For the 2026 back-to-school season, we brought back the limited edition Crayola and Jones Soda collection, featuring six-packs in six different flavors, including the new fruit punch flavor. That's another good example of how the right partnerships can connect two brands and can give consumers something different. Fallout is another great example. Following the rapid sell-out of our first Nuka-Cola Quantum Rocket Bottle release, we launched a second limited edition sell of Rocket Bottles.

[Scott Harvey, President and CEO at Jones Soda]

The consumer response has been tremendous, and it has showed us that there's a real opportunity for these types of limited releases. We're not done. We expect to have additional bottle launches during the balance of the year, giving us more opportunities to engage directly with consumers and build on the success that we've had with Fallout. While partnerships are becoming an important part of the growth driver for Jones, core beverages remain the foundation of the business. We're continuing to strengthen that foundation while looking for ways to expand Jones brand that can compete. During the quarter, we launched the Jones Zero Sugar craft soda lineup at Western Canadian Club Stores, expanding the better for you offerings and increasing our presence in an important retail channel. We continue to believe zeros is a significant opportunity for Jones.

[Scott Harvey, President and CEO at Jones Soda]

Consumers want less sugar, fewer calories, but they don't want to give up the great taste. That's exactly what we're trying to deliver with zeros. The bold flavors people expect from Jones, just without the sugar or the calories. There's another part of this that's important to me. We hear from Jones fans who love zeros and want to know why they can't find them in more places. Let me tell you, we hear you, and we're rapidly looking for ways to expand distribution as something that is actively on all of our agendas. Zeros also gives us an opportunity to reconnect with consumers, and I think I've touched on this before, who grew up with Jones and who love the brand, but may have moved away just from the full sugar. We want to give those consumers a reason to come back to Jones.

[Scott Harvey, President and CEO at Jones Soda]

I also want to address the two areas that haven't performed to our expectations. modern soda and adult beverages haven't developed at the pace we anticipated. We're disappointed in that performance, but we're also going to be disciplined about where we invest over time and capital. We've learned from both. Innovation alone isn't enough. You need the right consumer proposition, retail support, and sustainable velocities. In the adult beverages, the Mary Jones HD9 segment, the changing regulatory environment has created additional challenges as well. We're taking these learnings and making decisions accordingly, putting our resources behind areas we believe have the strongest opportunities to grow and generate returns. I think it's important to put this all in perspective. Even with the underperformance in these areas, we're increasing our full-year revenue growth expectations to approximately 80% and expect to deliver that positive adjusted EBITDA for the full-year.

[Scott Harvey, President and CEO at Jones Soda]

One of the other areas we're continuing to build is our direct to consumer business. D2C gives us a direct connection with Jones fans, and we've seen with the Fallout Rocket Bottle, it can be a powerful platform for limited releases and collaborations. In the coming weeks, you'll start to see improvements to our website focused on making it easier for consumers to shop for Jones and improving the overall user experience. There's more work to be done here, but we expect D2C can become a more meaningful part of our business over time. As we look to the second half of the year, our focus is on execution. We expect the approximately $2 million of shipments that shifted out of our second quarter to contribute to what we believe will be one of the strongest quarters in the company's history.

[Scott Harvey, President and CEO at Jones Soda]

We are growing the business, we are becoming more disciplined in how we generate, and we expect to deliver positive adjusted EBITDA for the full-year. Our priorities for the balance of the year are pretty straightforward. Deliver the business in front of us, continue expanding distribution, grow core zeros, maximize the opportunities we have with our partnerships, and continue to improve profitability. While we remain focused on delivering 2026, we have been actively working on what comes next. Over the past several months, we have been building our plans for 2027 and identifying the opportunities we believe can drive the next phase of growth. Rap Snacks is just one of those new growth opportunities that we expect to be contributing in 2027. It also gives us an opportunity to extend Jones into broader consumer lifestyle opportunities over time.

[Scott Harvey, President and CEO at Jones Soda]

We expect to have more to talk about as we move through the balance of the year. With that, I will turn the call over to Brian to walk us through the second quarter financial results. Brian?

[Brian Meadows, CFO at Jones Soda]

Thank you, Scott, and good morning to everybody on the call. Revenue increased by $5.9 million or 108% to $10.8 million for the quarter ended June 30th, 2026, compared to $4.9 million for the quarter ended June 30th, 2025. The increase in revenue is primarily a result of higher volume of sales of our Fallout branded products sold through our club, retailers, and direct-to-consumer channels. As expected, HD9 sales declined significantly during the same period, from $0.9 million to $0.1 million in 2026. As Scott highlighted, regulatory challenges of that business are tremendous and sales are declining throughout the industry. As a reminder, there are regulations that will become in effect in November of this year that will prohibit the sale of HD9 products containing in excess of one milligram of THC.

[Brian Meadows, CFO at Jones Soda]

The quarter ended June 30th, 2026, gross profit increased by $1.2 million or 72% compared to the prior year of $2.8 million. This is a result of higher sales revenue in the current quarter. For the quarter ended June 30th, 2026, gross margin decreased to 27.5% versus 33.3% in the second quarter. I would like to spend a few minutes discussing that decline and the reasons for it. The 580 basis point decrease in gross profit was primarily driven by higher freight charges, which in turn are driven by higher oil prices. Our ops team sent out an RFP in May to work on getting better rates on our main freight lanes. With our higher volumes, we were able to get material reductions in our key freight lanes.

[Brian Meadows, CFO at Jones Soda]

For example, for the southeast region of the U.S., we achieved a reduction in the months of June and July ranging from 10%-34% lower rates compared to what we were paying on average January through May of 2026. Midwest, we achieved a 35% reduction in freight, and for the Northeast, we achieved a 36% reduction in freight lane costs. Scott and I are very proud of our ops team for springing into action to deal with this cost issue identified in April. We are seeing these reductions in freight lane costs starting in June at the end of the second quarter. We do expect a higher gross profit margin for the back half of 2026, with the caveat of world oil prices remaining where they are today, approximately $80 per barrel for West Texas Intermediate.

[Brian Meadows, CFO at Jones Soda]

The company is also working hard to get our product COGS lower as we continue to drive higher volumes. With the materially higher sales in 2026, that does give us an opportunity to negotiate lower rates for packaging, co-man fees, cans, and bottles. Sales and marketing expenses came in at $1.9 million, compared to the prior year of $1.1 million. The $0.8 million increase was driven by royalties on Fallout products and broker fees on higher sales. When we look at it as a percentage of revenue sales, the marketing expenses declined from 21.7% to 18.7%. General and G&A expenses were up 6.7%, or $0.1 million from the prior year, driven by higher sales and wages, which were offset by lower professional service fees. G&A expenses as a percentage of revenue declined from 27.1% to 13.9% of sales.

[Brian Meadows, CFO at Jones Soda]

As you may recall, Scott and I reduced these costs significantly last year. We are now seeing improved productivity numbers. For example, our revenue per employee in 2024 was $712,000, and that improved to $904,000 in 2025, or a 27% increase. Using our six months revenue for 2026 and doubling it for full-year estimate, revenue per employee in the current year is trending at $1.3 million, or a 47% increase over 2025. 2026 trending revenue per employee is 87% higher than 2024 levels. We are currently at 34 employees, compared to 25 in 2024 and 28 in 2025. So with an increase in headcount, we are still driving higher revenue per employee, something we're clearly excited about. Moving to net income. We report a net loss for the second quarter of $650,000, or negative $0.01 per share.

[Brian Meadows, CFO at Jones Soda]

This compares to net income of $2.6 million or $0.02 per share in the prior year. The prior year net income included a one-time $3.7 million gain from the disposition of our cannabis business. Adjusted EBITDA, a non-GAAP measure that we believe provides a better view into the ongoing performance of the business and cash generation or loss from continuing operations, was a loss of $312,000 for the quarter ended June 30th, 2026. This is a $427,000 improvement compared to adjusted EBITDA loss of $739,000 in the prior period. As Scott mentioned, we had approximately $2 million in sales that were expected to deliver in the second quarter that moved into July. $2 million, even at the 27.5% gross margin, would have been an additional $550,000 positive impact on our reported adjusted EBITDA levels.

[Brian Meadows, CFO at Jones Soda]

This plus the impact of higher fuel charges in the quarter resulted in the $0.3 million adjusted EBITDA loss in the quarter. Looking at our six-month results, we are seeing tremendous progress in executing our 2026 business plan compared to the prior year. Six-month revenue came in at $22.6 million or 148% of the prior period. Six-month revenue is almost 90% of the full-year's revenue that we reported for 2025. Six-month gross profits came in at $6.7 million compared to $3 million in the prior period or 123% increase. Our six-month gross profit of $6.7 million is 99% of what we achieved for full-year 2025. Adjusted EBITDA for the six months ended June 26 came in at a positive $0.2 million, compared to a loss of $1.7 million the prior period. As we had mentioned earlier, we do expect to achieve positive adjusted EBITDA for fiscal 2026.

[Brian Meadows, CFO at Jones Soda]

Turning to the balance sheet, as of June 30, 2026, we had a cash of $2.4 million compared to $3.6 million at year-end. Subsequent to the quarter, we completed two private placement financings, generating approximately $1.9 million in gross proceeds, further enhancing our liquidity and financial flexibility. Combined with our $10 million credit facility with Two Shores Capital, we believe we are well positioned to support anticipated growth throughout 2026, invest in strategic opportunities, and continue addressing any legacy obligations while maintaining operational discipline. I'd like to also highlight improvements to our working capital management as well. The Jones team is focused diligently on managing the company's precious cash resources to ensure we are collecting our AR on a timely basis, managing inventory levels responsibly, and managing our payments with our suppliers. Starting with AR, our sales days outstanding one year ago stood at 78.4 days.

[Brian Meadows, CFO at Jones Soda]

That was second quarter of 2025. As of Q2 2026, we are now at 29.4 days. Remarkable improvement. Looking at inventory turnover next, as of the second quarter of 2025, our average inventory turns were 2.8%. This metric obviously was very poor performance for a CPG company. We are now in the 6.8 times turnover range for 2026. This would give you 50-70 days on hand compared to last year of 130 days. Lastly, looking at our days payable outstanding, we've improved that to an average as right at our target. We decreased the average DPO from a non-sustainable 122 days in the second quarter of 2025 to approximately 60 days at the end of 2026. Touching on our uplisting, that does remain an important part of our long-term strategy.

[Brian Meadows, CFO at Jones Soda]

We have filed an updated S1 very recently, and we will look to work on that in the second half of 2026. Turning to our guidance for the full-year 2026. As Scott discussed today, we are revising our expectation for year-over-year growth from 60%, as previously stated, to at least 80% for 2026, and we're introducing full-year guidance for positive adjusted EBITDA, reflecting our confidence in the operating leverage for the business and our outlook for the second half of the year. With that, I'll turn it back to you, Scott.

[Scott Harvey, President and CEO at Jones Soda]

Thanks, Brian. Before we open the call for questions, I'm going to leave you with a few thoughts. I'm very pleased with the progress we've made through the first half of 2026, but of course, we're not satisfied. There's still a lot of work in front of us and a lot more opportunities for Jones. We're growing the business at a rate we haven't seen in a long time. We're increasing our full-year revenue expectation and our adjusted EBITDA for the full-year as well. To me, that's important. It shows that we can grow the business while becoming more disciplined and more profitable at the same time. I believe we're just getting started. Core beverages remain the foundation of Jones, and we still see a lot of opportunities in front of us.

[Scott Harvey, President and CEO at Jones Soda]

That means expanding distribution, getting those zeros into more stores, and continuing to innovate across our portfolio. Our partnerships are bringing new consumers to the brand and creating opportunities we haven't seen before. Fallout continues to demonstrate what's possible when we bring together the right brands and creativity of Jones. In Rap Snacks, we're beginning to build another growth opportunity that we expect to start contributing in 2027. There's a lot happening at Jones right now, but I think that there's even more in front of us. We're staying focused on execution and discipline about where we invest, but discipline doesn't mean playing it safe. Our founder, Peter van Stolk, once said, "There's always room for the little guy if the little guy plays by his own rules." I think that still captures what Jones is about today.

[Scott Harvey, President and CEO at Jones Soda]

Jones has always been the brand that does things a little differently, and we need to keep thinking that way. We need to be dreamers. We need to innovate, take some chances, and create what's next, rather than follow what everybody else is already doing. We're going to be disciplined about where we invest, but we're not going to lose what made Jones different in the first place. That's what I believe in, and that's the company that we're building. Before I close, I want to thank the entire Jones team, our village. None of the progress we've talked about today happens without their commitment, creativity, and hard work. I'm incredibly proud of what this team has accomplished, but I'm even more excited about where we're going.

[Scott Harvey, President and CEO at Jones Soda]

We believe we're building a very different Jones than the one we started with 18 months ago, a stronger business, a more disciplined business, and one with significantly more opportunity in front of it, and we're still early in what we believe Jones can become. Before we open it up to questions, Brian and I will also be attending several investor conferences over the coming months, including the Smallcap Discoveries Conference, September 28th and 29th in Vancouver, British Columbia; the LD Micro 20th Annual Main Event, October 19th and 21st in Los Angeles; and the Planet MicroCap, and it's October 27th through the 29th in Toronto. We look forward to meeting with investors and telling the Jones story and sharing the progress that we're making.

[Scott Harvey, President and CEO at Jones Soda]

With that, we will wrap up the call by addressing some of the questions submitted live by the shareholders through the webcast chat.

[Brian Meadows, CFO at Jones Soda]

All right. Starting with the first question, Scott, is Jones currently in talks to bring the Fallout line into any big box retailers or additional clubs such as Walmart, Target, Sam's Club, or BJ's?

[Scott Harvey, President and CEO at Jones Soda]

Great question. I think, when we look at the Fallout perspective, where is it going? You see some individual bottles out there. I do not think we will ever bring the full packs like what you have seen in the clubs that we are currently in. I just think it is, you begin to step over, and again, we have to look at the pricing structure and what we have committed to that customer about how do we bring the fives to market. I think that is also when you think about the other collaboration that we are doing now with Rap Snacks, it gives us another vehicle to be able to get into some of these other clubs. I think Rap Snacks in a form and shape that we are talking about plays well in some of the other clubs.

[Scott Harvey, President and CEO at Jones Soda]

I also think it is a great opportunity to get into venues and outlets where we are currently not. I think, and again, just the whole Fallout piece, we have to tread lightly as to where we want it to be, how we want it to go, and where do we feel that we are going to get the biggest opportunity with that. So, you potentially will see some single bottles, but I do not think you are going to see the same full pack of what we have been presenting at club, at other retailers currently. I do think that some of the other collaboration that we have, like Rap Snacks or Crayola, could have a broader distribution in some of those other outlets than where they currently are today.

[Brian Meadows, CFO at Jones Soda]

Well, seeing as you finished answering the question about Rap Snacks, the next question is, where do you expect to secure new distribution and shelf space for the Rap Snacks partnership?

[Scott Harvey, President and CEO at Jones Soda]

Yeah. Again, I think it opens up a whole set of different opportunities for us through convenience. There could be collaborations between where you've got the Rap Snacks Jones bottles or cans with the Rap Snacks offerings that they have as a collab between them. I think it opens up opportunities, and potentially, and more convenience that we have, inner cities in regards to bodegas and second-tier grocery stores in there where we may not have the presence today.

[Scott Harvey, President and CEO at Jones Soda]

So I think it opens up greater opportunities in the other door with that collaboration, and I can tell you some of the flavors that we're working on so far for these are pretty interesting, and I think they're going to be very well-received once we start rolling those products out. Again, I think there's a whole section of retailers that we haven't even approached yet, but I think this collab that we're doing will get us into more meetings and open more doors and opportunities for us.

[Brian Meadows, CFO at Jones Soda]

Another related question on Rap Snacks. What's the launch timeline channel strategy, and how meaningful could it be in 2027?

[Scott Harvey, President and CEO at Jones Soda]

Timing-wise, as I've alluded to, will it be in 2027? I can tell you that we're already working on packaging and designs and presentations to start getting out there. I would say that, again, I would expect some time within the first or second quarter to get this done, and that's the far end of the spectrum. How meaningful it is? I think it could be. Again, I would expect for it to be a good contributor for us going forward, if we do it the right way, and which we've proven through Fallout and some of these other ones, we can do great collabs.

[Scott Harvey, President and CEO at Jones Soda]

Our packaging, our flavor profiles are pretty awesome, and I believe that our team is putting together some pretty cool stuff from what I've seen and what we've discussed with the Rap Snacks team already. Super optimistic about what it can do. I believe that it helps us diversify from just having Fallout, which is a major part of our proposition, but now this gives us another collab, to be able to go out and be able to sell to consumers. I'm excited about it, and I think it could be meaningful to us in 2027.

[Brian Meadows, CFO at Jones Soda]

How is sell-through been on Jones Zero Sugar at Costco Canada, and is there planned expansion or interest from other retailers?

[Scott Harvey, President and CEO at Jones Soda]

Amazing, right? We set out with a first order, and it moved really well and really quick. We actually have some additional products, trucks on their way out there again as a reorder for them. Is it going to other retailers? They are in some other retailers now, single bottles. But my goal would be a greater distribution across all retailers, because I do believe that, as I stated within the comments here, is that we've lost fans because of sugar, and I think this will get consumers to come back to a brand that they love and that's unique in the flavor profiles that we have and still be able to enjoy that treat without all that sugar.

[Scott Harvey, President and CEO at Jones Soda]

Expansion is definitely on the forefront, and as Brian could tell you, I talk about it all the time, that we've got to get zeros into the market because I believe we're behind the ball, and we missed an opportunity. I'm excited about it. Fan acceptance has been great. Feedback that we've gotten from consumers, they love the flavor profiles. For me, we can't get it out there quick enough into greater distribution.

[Brian Meadows, CFO at Jones Soda]

I'll take this next one. Asking about Q3 being one of the strongest quarters in company's history. Can you frame what that implies versus $10.2 million you just posted? How much of the $2 million shipped has already shipped? I can confirm the $2 million has all shipped in July. Previously, the fourth quarter was over $12 million, so we are probably about 22 for the back half of the year. It's going to be in excess of $12 million, I guess, would be a range that you could think about, and I can confirm the $2 million of sales that moved into the third quarter did ship in July. Next question is, what was the initial response. We already talked about that one in the. I guess from Jones Zero, how soon will we see it widely distributed throughout the U.S. is the question.

[Scott Harvey, President and CEO at Jones Soda]

We're working on it. Can't get it done soon enough, as I've said. Again, the acceptance has been great. We hear from fans all the time is, "Why can't I get it?" And I think that's a clear indicator. Our sales team is out there aggressively looking for opportunities and outlets to be able to put the products in. As I said, I think it's a huge opportunity for us to get the products out into consumers because I think they're going to love it.

[Scott Harvey, President and CEO at Jones Soda]

As we've seen through some of the velocities through the first distribution, they've been great. Actively working on it. We want it more in the U.S. Canada was a great opportunity for us to get it in and see how well it moved, and we were quite pleased with the results of that. Stay tuned. Team is out there pushing hard to get the products out into the retailers as quickly as possible.

[Brian Meadows, CFO at Jones Soda]

Question about the sell-through of Jones four packs at Walmart.

[Scott Harvey, President and CEO at Jones Soda]

Yeah, doing well. Velocities are great. We've seen a lot higher velocity, move through, than what we had seen with the previous products that were out there. From what we're hearing, they are super happy with what we're being able to achieve. We will continue to do our best with Walmart to push some potential expansion as it becomes available. Right now it's performing above our expectations as far as sell-through within the Walmarts.

[Brian Meadows, CFO at Jones Soda]

Next question is on gross margin. I'll handle this one. Gross margin was 27.5%. What's the run rate savings from the freight RFP, and where do you expect margin to land once it's fully in the P&L?

[Brian Meadows, CFO at Jones Soda]

We expect to be back in the 30s for the second half of 2026. The numbers I highlighted, between 10% and 36% were the reductions we saw on our main trade lanes. We are seeing that came through in June and July, and we'll further expect that to continue through to the balance of the year with the sole caveat that the WTI number stays around $80 a barrel.

[Brian Meadows, CFO at Jones Soda]

The next question: Fallout has now sold out twice. Can that become a recurring annual program? How should we think about collaboration economics, royalty load versus the volume and shelf space it unlocks?

[Scott Harvey, President and CEO at Jones Soda]

Yeah. I think it's sold out more than twice based upon the rotation that we've had out in some of the clubs. We have a partnership agreement that extends through the end of 2028, so of course, it's going to be part of our platform. As I mentioned in the comments, we've been working on our 2027 plan for the last couple of months, and we strategically have some of these on that calendar for next year, so it will still be part of our mainstay. I also believe it's very important for us to have additional collaborations to help support that as well. I think, when you look at the economics of this piece, it's important to have the Fallout. It drives consumers crazy when we put it out on the shelf. The organic recognition through social media is awesome.

[Scott Harvey, President and CEO at Jones Soda]

We have to do something, and the followers do the advertising for us just by doing some of this reposting that's out there. Yes, we will be continuing to focus on Fallout through the balance of our commitment with them. I think everyone will be kind of excited about some of the new things that we have coming out to bring some more things to life that they may see in the series or in the game. I think it's a great opportunity for us, but I need to be able to help support that through some other collaborations as well as we continue on throughout next year as well.

[Brian Meadows, CFO at Jones Soda]

Question here, Scott, about can you speak to Jones' fulfillment plan for e-commerce? That has seemed to be a historic pain point for the company.

[Scott Harvey, President and CEO at Jones Soda]

Yeah. We recently just transitioned, and you probably saw on the website that there was delays in shipments, so we transitioned from one fulfillment house to another fulfillment house, who we have a lot more confidence in being able to do the fulfillment for us. They were responsible for shipping out this last set of Rocket Bottles that we've had, the Fufu Berry that we launched, the Nuka Orange that we launched. Transitions to 3PLs are never easy. There's always obstacles and startup pain points that we've gone through, but I believe that they are more than capable of handling volume that we have. I also think some of the improvements that you see through the website will help the pipes behind the scenes flow information better through them into Shopify, into the 3PL.

[Scott Harvey, President and CEO at Jones Soda]

I think the work that we're doing on the whole D2C platform website will help the process move smoothly through there. I am constantly on our website buying stuff and having it delivered to my house, so I'm pressure testing it as well through our new 3PL. To date, we're pretty pleased with them, what their capabilities are versus where we were six months ago. I believe that they will be able to do what we need them to do, but we have our teams carefully watching them and participating, and in some cases, they're on-site. We send people to their warehouses to be on-site for important deployments to make sure that they're meeting the expectations and actually delivering on the SOWs that we set in place for them.

[Brian Meadows, CFO at Jones Soda]

There's a number of questions about the uplist, so I will generally comment on that to try and address all these questions. The size of an uplist to Nasdaq or NYSE, there's two exchanges that we're considering. It is somewhere in the $10 million-$15 million range to do an uplist. That's the level of capital you need to raise. Timing-wise, it's something we will be focusing on in the back half of the year. We can never guarantee exactly when that process will be completed. There's SEC reviews, there's discussions with NYSE or Nasdaq review. I think the thing is, this year, Scott and I have confidence that we actually have a story that is interesting for investors. I think last year was one of basically fixing the company and getting it back to growth, and now we actually have a growth story.

[Brian Meadows, CFO at Jones Soda]

We think we're confident now that we have a story that we can get potential investors excited about. Now it's just working through the process, as I said, of pick an exchange, work with these listing groups, and working through the process. We do have the S1 updated and filed last week, so it is in with the SEC. Scott, I think that there's still more questions here, but I think we went through a range that answered a lot of those. Is there any other final words you wanted to conclude the call with?

[Scott Harvey, President and CEO at Jones Soda]

No. Again, I just want to thank you for joining us this morning as well. I think we're super excited about what the back half of 2026 has in front of us. We know that 2027, we're diligently working to put our plans in place and really continuing to look at what excites our fans, our consumers. How do we want to bring Jones to life through whether it's a different category or a different product? We're just not going to launch. We need to make sure that what we do makes sense and that we're just not throwing money away because money is so precious to us. I think the work that's been done by Jones, the team over the last 18 months has been pretty incredible. We're not there yet. We're not always satisfied.

[Scott Harvey, President and CEO at Jones Soda]

From Brian and I, it's always about how do we continue to improve, and that's a never-ending job for us. I think what we've been able to do so far has been pretty astounding for us, and considering where we came in and where we are today. Like I said, 2026, we're super excited about what the balance of the year looks like. We'll be even more excited to be able to share some more details as we work through some of the initiatives that we have going on today to be able to continue to position Jones as a beverage company moving forward versus where we have been. Again, we will not chase every bright and shiny box because it doesn't work.

[Scott Harvey, President and CEO at Jones Soda]

We need to stay focused and really deliver on the expectations that we've set for ourselves and more importantly, be able to deliver shareholder value, of which is always on top of mind for Brian and I going forward. We'd like to thank everyone again for taking the time to listen today. Again, we always welcome any questions or one-on-one calls. Again, you could always direct those to James at Hayden IR. It's on our website, and we can address them and/or set up any time to speak offline today. Again, thank you for attending the call today, and we look forward to seeing you all either maybe at some of the conferences that Brian and I are going to be up in the next couple of months or back here on our third quarter results in November. Sherry, thank you, and back to you.

[Operator]

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Participants

Executives

• Scott Harvey, President and CEO
• Brian Meadows, CFO