Zevia Pbc Class A: Positive Earnings Call Amid Challenges

Zevia Pbc Class A ((ZVIA)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Zevia Pbc Class A reflected a generally positive sentiment, highlighting significant achievements in sales growth, strategic marketing, and distribution expansion. Despite these successes, the company remains cautious due to macroeconomic uncertainties and the impact of tariffs, which are expected to exert short-term pressures on earnings in the latter half of the year.

Record-Breaking Sales Growth

Zevia reported a remarkable 10.1% increase in net sales, reaching $44.5 million in Q2 2025. This achievement marks the company’s first profitable quarter as a public entity, with an adjusted EBITDA improvement of $4.6 million, culminating in $0.2 million. This growth underscores the company’s robust sales strategies and market penetration.

Strategic Marketing and Product Innovation

The ‘Get the Fake Outta Here’ campaign was a standout success, delivering record earnings impressions and contributing to double-digit growth. New product offerings, such as Strawberry Lemon Burst and Orange Creamsicle, have emerged as top performers, showcasing Zevia’s commitment to innovation and consumer engagement.

Distribution Milestones

Zevia has surpassed its historical peak distribution levels at retail, with notable performances at major retailers like Walmart and Costco. The company has also increased its visibility in convenience and drug channels, further solidifying its market presence.

Cost Savings and Efficiency Gains

The company achieved $15 million in annualized savings and identified an additional $5 million, expected to be realized in 2026, totaling $20 million. These savings reflect Zevia’s focus on operational efficiency and cost management.

Gross Margin Improvement

Zevia’s gross margin improved by 680 basis points to 48.7%, driven by lower product costs and enhanced inventory management. This improvement highlights the company’s effective cost control measures.

Macro Environment Uncertainty

Despite the positive results, Zevia expressed caution due to the uncertain macroeconomic environment and potential impacts from tariff costs on aluminum. These factors could pose challenges in the coming quarters.

Q3 and Q4 EBITDA Pressure

The company anticipates an adjusted EBITDA loss between $3.4 million and $3.9 million for Q3, including a $500,000 one-time charge related to packaging redesign. This forecast indicates potential short-term financial pressures.

Tariff Impact on Costs

Zevia expects a 200 basis points impact on gross margins due to aluminum tariffs, with material effects anticipated in Q3 and Q4. This development could affect the company’s cost structure and profitability.

Flat Q4 Sales Outlook

The company projects that Q4 sales might be flat or slightly down, influenced by the previous year’s substantial Walmart pipeline fill. This outlook suggests potential challenges in maintaining sales momentum.

Forward-Looking Guidance

Zevia’s forward-looking guidance remains optimistic, with a maintained full-year net sales target between $158 million and $163 million. The company also projects an adjusted EBITDA loss between $7 million and $9 million. Zevia’s strategic focus on marketing, product innovation, and distribution is expected to drive future growth, despite current macroeconomic challenges.

In conclusion, Zevia’s earnings call showcased a positive outlook with significant achievements in sales and strategic initiatives. However, the company remains vigilant about macroeconomic uncertainties and tariff impacts, which could pose challenges in the near term. Investors should watch how these factors influence Zevia’s performance in the coming quarters.