Zevia PBC Q2 Earnings Call Highlights

Key Points

• Q2 sales increased 1.1% to $45 million, while adjusted EBITDA improved to approximately $0.5 million from $0.2 million a year earlier. Gross margin edged up to 48.9%, although higher aluminum costs are expected to pressure results in the second half.
• Zevia is prioritizing its singles business, estimating an approximately $80 million opportunity if it achieves multipack-level market share. The company plans to begin executing a revised singles go-to-market strategy in early 2027, expanding distribution and improving retail activation.
• The company maintained full-year 2026 guidance of $170 million to $175 million in sales and a $2 million to $4 million adjusted EBITDA loss. Zevia expects continued cost pressure from fuel and aluminum, but anticipates $3 million to $5 million in annualized savings beginning in Q1 2027.

Zevia PBC NYSE: ZVIA reported second-quarter 2026 net sales of $45 million, up 1.1% from the prior-year period, as pricing actions helped offset comparisons affected by prior-year customer load-ins and changes in shipment timing.

The company said adjusted EBITDA was approximately $0.5 million, compared with $0.2 million a year earlier. President and Chief Executive Officer Alexandre Ruberti, who was making his first earnings-call appearance in the role, said the company is operating from a stronger financial position and is developing a strategic plan intended to accelerate growth and improve profitability.

“We believe that Zevia's truly distinct market position presents a tremendous opportunity that we have yet to capture,” Ruberti said. He said the company would outline the plan, including measurable milestones, in the coming months.

Sales, Margins and Expenses

Chief Financial Officer and Principal Accounting Officer Girish Satya said quarterly revenue growth was primarily driven by pricing. Results also reflected the lapping of load-ins to Walgreens and Albertsons during the second quarter of 2025, as well as a shift in sales cadence that the company expects to favor the first and third quarters of 2026.

For the first half of 2026, net sales rose 10.4% to $91.1 million. That result includes the effect of Zevia’s decision to discontinue its tea offering, which began during the second quarter.

Gross margin increased 20 basis points to 48.9%, supported by price realization but partly offset by higher aluminum costs. Satya said elevated aluminum costs are expected to have a greater impact during the second half of the year.

• Selling and marketing expense was $13.1 million, or 29% of sales, compared with $13.4 million, or 30% of sales, a year earlier.
• Selling expense declined to $8.1 million from $8.7 million, reflecting lower warehousing and repackaging costs, partly offset by higher fuel costs.
• Marketing expense rose to $5 million from $4.7 million as Zevia supported product launches, packaging redesigns and its Cardi B partnership.
• General and administrative expense increased to $8.6 million from $8.1 million, primarily due to personnel-related costs and outside services.

Zevia ended the quarter with approximately $28.5 million in cash and cash equivalents, along with an undrawn $20 million revolving credit line.

Singles Platform Takes Priority

Ruberti identified the expansion of Zevia’s singles business as the company’s most immediate commercial opportunity. He said Zevia has about a 10% share in its current business but effectively no share in singles, which he described as a key format for consumer discovery, trial and household penetration.

According to Ruberti, Zevia estimates that matching its multipack share in singles could represent an approximately $80 million opportunity. The company has worked on improving the taste, can format, flavor assortment and pricing of its single-serve products.

“Our business nowadays is based on multi-packs and we don't have singles,” Ruberti said in response to an analyst question. He said the company is evaluating a range of distribution methods, including direct-store-delivery networks, brokers, broadliners and merchandising agencies, with the objective of ensuring national distribution and in-store execution.

The company is targeting the beginning of 2027 to begin executing its revised go-to-market strategy for singles. Ruberti said the effort will require a combination of distribution expansion and improved activation at retail locations.

More broadly, Zevia plans to focus on expanding availability in mass, club, foodservice, value retail and e-commerce channels, while improving merchandising and category management within existing stores.

Brand Campaign and Product Rollout

Zevia launched its “Refreshingly Real” marketing campaign featuring Cardi B. Ruberti said the campaign generated nearly 29.5 billion social campaign video views, more than 1.7 million engagements on Cardi B and Zevia posts, 1.8 billion earned-media impressions and 473 media placements.

The company plans additional campaign activity, including consumer contests, another advertisement in coming weeks and a Cardi B signature product scheduled for launch in early January. Ruberti said the broader objective is to move consumers through the marketing funnel from awareness to consideration and purchase.

Zevia also completed most of the national rollout of new packaging and flavors. Ruberti said the company had reached roughly 90% rollout and that it was too early to assess the full sales impact. He said early readings from the natural channel showed higher velocities, though management expects to need several more months to evaluate results.

Outlook Maintained Despite Cost Pressures

For the third quarter, Zevia expects net sales of $44 million to $46 million, representing approximately 10% growth at the midpoint. The outlook includes increased club distribution, continued digital-channel strength and promotional support for the national packaging refresh, partly offset by the discontinued tea business.

The company expects a third-quarter adjusted EBITDA loss of $3 million to $3.5 million. Zevia anticipates gross margin of about 46%, citing aluminum costs, increased promotions and channel mix, along with higher fuel costs and marketing spending tied to the Cardi B campaign and packaging rollout.

Zevia maintained its full-year 2026 guidance for net sales of $170 million to $175 million, or about 7% growth at the midpoint. The outlook incorporates an estimated 1.5 percentage-point impact from discontinuing tea. The company also reaffirmed its full-year adjusted EBITDA guidance of a loss between $2 million and $4 million.

Satya said the annual profitability outlook continues to include roughly $11 million of pressure from elevated fuel and aluminum-related costs. He added that Zevia expects to realize an additional $3 million to $5 million in cost savings beginning in the first quarter of 2027, primarily affecting cost of goods sold and selling expenses.

About Zevia PBC (NYSE:ZVIA)

Zevia PBC, headquartered in Los Angeles, is a Public Benefit Corporation that produces zero-calorie, naturally sweetened beverages. Founded in 2007, the company went public through a merger with a special purpose acquisition company in March 2021. Zevia's mission centers on offering healthier drink alternatives by using stevia leaf extract and other plant-based ingredients rather than sugar or artificial sweeteners.

The company's product portfolio spans multiple categories, including carbonated sodas, sparkling water, energy drinks, mixers and flavored teas.

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