[Management View]
Zevia reported net sales of $40.8 million in Q3 2025, reflecting a 12% growth driven by expanded Walmart distribution and club channel rotations. Gross margin declined to 45.6% due to aluminum tariffs and packaging refresh costs. The company emphasized its three strategic growth pillars: high-impact brand marketing, accelerated product innovation, and expanded distribution. Management highlighted strong consumer engagement, with household penetration exceeding 5% and double-digit gains in brand consideration and purchase intent.

[Outlook]
Zevia raised its full-year 2025 net sales guidance to $162-$164 million and adjusted EBITDA loss guidance to $5-$5.5 million, reflecting improved performance. Q4 2025 net sales are expected to range between $39-$41 million, with adjusted EBITDA loss anticipated between $250,000-$750,000. The company aims to achieve positive adjusted EBITDA in 2026, supported by productivity initiatives and strategic investments in customer acquisition.

[Financial Performance]
- Net sales: $40.8 million (+12% YoY)
- Gross margin: 45.6% (-350 basis points YoY)
- Selling and marketing expenses: $12.7 million (31% of net sales, up from 33% in Q3 2024)
- Adjusted EBITDA loss: $1.7 million (compared to $1.5 million loss in Q3 2024)
- Cash position: $26 million with an undrawn $20 million credit line

[Q&A Highlights]
Question 1: Can you elaborate on the Walmart Canada expansion and its impact on the raised sales outlook?
Answer: Walmart Canada distribution expanded from fewer than 100 stores to over 400, covering more than half of Walmart locations in Canada. This expansion is not the primary driver of the raised sales outlook but indicates strong brand health and future opportunities in Canada.

Question 2: What is the timeline for rolling out the new packaging across all distribution points?
Answer: The new packaging, which has shown significant increases in purchase intent, is live for limited-time flavors like strawberries and cream. Legacy flavors will transition to the new packaging in early Q1 2026, with a rolling rollout continuing into Q2 2026.

Question 3: What are the drivers of household penetration growth, and how does Zevia compare to the broader Better For You category?
Answer: Household penetration is now above 5%, driven by new consumer acquisition, expanded distribution, and marketing efforts. Zevia targets millennial households with children, leveraging category tailwinds as Better For You products operate at 20% household penetration, leaving significant growth potential.

Question 4: What is the outlook for the energy drinks business in 2026 and beyond?
Answer: Zevia sees long-term potential in energy drinks but remains focused on scaling its soda platform. The energy drink business is healthy in natural channels and e-commerce, with future investments contingent on achieving broader success in soda.

Question 5: Are there any brand awareness statistics to support the marketing momentum?
Answer: While specific awareness statistics were not disclosed, proprietary research shows double-digit gains in brand consideration and purchase intent. Marketing efforts are driving trial and repeat purchases, laying the foundation for expanding awareness.

Question 6: How should we interpret the Q4 revenue guidance given historical seasonality?
Answer: Q4 guidance reflects distribution gains and incremental club channel rotations, offsetting the challenging comp from last year’s Walmart load. This suggests both an improved baseline and incremental growth opportunities.

Question 7: What are the expectations for shelf space expansion in 2026?
Answer: Walmart continues to perform well, with new items driving visibility and trial. Zevia surpassed historical peak shelf space in 2025 and sees opportunities for same-store distribution increases, improved shelf placement, and new channel expansions in club, value, and convenience.

Question 8: What are the key factors influencing profitability in 2026?
Answer: Zevia aims for positive adjusted EBITDA in 2026, supported by $5 million in additional productivity savings and pricing opportunities. Aluminum tariffs remain a headwind, but strategic investments in customer acquisition will continue.

[Sentiment Analysis]
Analysts expressed optimism about Zevia’s growth trajectory, particularly its raised guidance and strategic initiatives. Management maintained a confident tone, emphasizing long-term opportunities in household penetration, distribution gains, and product innovation.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|----------------------------|-----------------|-----------------|------------------|
| Net Sales | $40.8 million | $36.4 million | +12% |
| Gross Margin | 45.6% | 49.1% | -350 basis points|
| Selling & Marketing Exp. | $12.7 million | $12 million | +5.8% |
| Adjusted EBITDA Loss | $1.7 million | $1.5 million | -13.3% |
| Net Loss | $2.8 million | $2.8 million | Unchanged |

[Risks and Concerns]
1. Aluminum tariffs and packaging refresh costs continue to pressure gross margins.
2. Sustained investments in marketing and customer acquisition may limit adjusted EBITDA flow-through in 2026.
3. Dependence on category tailwinds and consumer trends for long-term growth.
4. Execution risks in rolling out new packaging and expanding distribution channels.

[Final Takeaway]
Zevia’s Q3 2025 results demonstrate strong progress across its strategic growth pillars, with raised guidance underscoring confidence in its trajectory. The company is leveraging expanded distribution, innovative product launches, and impactful marketing to drive household penetration and brand momentum. While challenges such as aluminum tariffs and sustained investments remain, Zevia is well-positioned to capitalize on category tailwinds and achieve positive adjusted EBITDA in 2026. Investors should monitor execution on packaging rollout, distribution gains, and velocity improvements as key drivers of future growth.