Zevia (ZVIA) Q4 2025 Earnings Call Transcript

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DATE

Wednesday, February 25, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Amy Taylor
• Chief Financial Officer and Principal Accounting Officer — Girish Satya
• Investor Relations — Jean Fontana

TAKEAWAYS

• Net Sales -- $37.9 million, representing a 4% decline, primarily due to comparison with the prior-year Walmart pipeline fill and a shift of Costco sales into January.
• Fourth-Quarter Adjusted EBITDA -- Approximately $50,000, compared to a loss of $3.9 million in the prior-year period, reaching breakeven and outperforming expectations.
• Gross Margin -- 47.7%, down 150 basis points from the previous year's 49.2%, reflecting a channel mix shift to club and higher tariff costs, partially offset by reduced promotional activity.
• Selling and Marketing Expenses -- $11.0 million (29.1% of net sales), a reduction from $16.5 million (41.7% of net sales) the previous year, mainly due to lower warehousing, freight transfer, and holiday campaign spending.
• General and Administrative Expenses -- $7.3 million (19.3% of net sales), up from $6.8 million (17.3% of net sales), driven by higher accrued variable compensation.
• Net Loss -- $1.3 million, a significant improvement from a $6.8 million loss in the prior year.
• Full-Year Net Sales -- $161.3 million, up 4%, primarily driven by higher distribution volumes at Walmart.
• Full-Year Gross Margin -- 48.0%, up from 46.4% the prior year, attributed to improved cost and inventory management.
• Full-Year Net Loss -- $11.1 million, compared to $23.8 million in the previous year.
• Full-Year Adjusted EBITDA Loss -- $4.7 million, a marked improvement from a $15.2 million loss a year ago.
• Cash and Credit Availability -- $25.4 million in cash and cash equivalents, plus a $20.0 million undrawn revolving credit line at quarter-end.
• 2026 Net Sales Guidance -- Projected range of $169.0 million to $173.0 million (6% growth midpoint), reflecting the planned discontinuation of the tea line with an expected 1.0-1.5 percentage point impact on growth.
• 2026 Adjusted EBITDA Guidance -- Estimated range from a $1.0 million loss to $0.5 million profit, incorporating a $5.0 million tariff-related aluminum cost increase and ongoing reinvestment.
• 2026 Gross Margin Outlook -- Expected to be in the high-40% range from Q2 onward, assuming no further aluminum cost escalation.
• Q1 2026 Guidance -- Net sales forecasted at $40.0 million to $42.0 million, with an adjusted EBITDA loss between $1.6 million and $1.9 million, reflecting a mid-40% gross margin, largely due to the national Costco program.
• Product Innovation -- New flavors, including Orange Creamsicle, Fruit Punch, and Peaches and Cream, are being rolled out nationally, and the new fruity variety pack is expanding across retail channels.
• Distribution -- Nationwide Costco front-of-store rotation covers approximately 35%-40% new regions, and Walmart and Albertsons remain key partners for shelf expansion and promotional activity.
• Marketing Investment -- Planned increase in marketing spend for 2026 to 12%-13% of revenue, up from 2025 levels.
• Board Changes -- Appointment of Andy Rubin as Chair, and Suzanne Ginestro joining as director to enhance board capabilities.

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RISKS

• Girish Satya said, "Our guidance also assumes gross margins in the high-40% range starting in Q2, barring further increases in aluminum costs," clearly highlighting exposure to potential additional aluminum tariffs.
• Net sales guidance factors in a planned discontinuation of the tea line, which is expected to reduce growth by 1.0-1.5 percentage points.
• Q1 2026 profitability is constrained by lower gross margins associated with the national Costco program and higher tariff-related costs.
• General and administrative expenses increased due to higher accrued variable compensation, signaling ongoing cost pressures.

SUMMARY

Management stressed that shifting to a national Costco program early in the year drove product visibility into new geographic regions and is expected to catalyze trial across channels. New fruity varieties and updated packaging are scheduled for broad rollouts in spring and summer, supported by digital and retail-focused marketing designed to accelerate user acquisition. Distribution gains at Walmart and Albertsons delivered share gains and improved shelf positioning; key learnings from these retailers are being leveraged in discussions with other national and regional grocers. The company is executing a price increase in Q2, aiming to offset an incremental $5.0 million annual aluminum tariff headwind, while also activating the final phase of a $5.0 million productivity initiative to counter cost inflation. Quarterly sales volumes are anticipated to shift, with higher volumes in the first and third quarters due to major retail programs and marketing calendar adjustments.

• Amy Taylor described the Costco initiative as offering "penetration into regions where we have not had Costco distribution before," with 35%-40% of participating regions considered net new for the brand.
• Satya explained that reduced selling and marketing costs primarily result from lower warehousing, freight transfer, and marketing campaign timing.
• The company did not raise prices last year and expects elasticity from the 2026 price increase to be around 1.1, which is embedded in guidance.
• Walmart’s modern soda set anchors Zevia PBC’s multipack position, with the company maintaining and increasing space and velocity despite competitive pressures.
• E-commerce, including subscriptions and new eight-count offerings, continues to show accelerated growth as a supporting channel.
• DSD-operated markets, such as the Pacific Northwest and Arizona, outperform other geographies in grocery following increased time in market and improved display execution.

INDUSTRY GLOSSARY

• DSD (Direct Store Delivery): A distribution model where products are delivered directly to retail stores by the manufacturer, bypassing central warehouses, to enhance shelf placement and product freshness.
• Modern Soda Set: A dedicated retail shelf space or category focused on zero-sugar, clean-label, better-for-you carbonated soft drinks, often featuring innovative and premium-positioned products.

Full Conference Call Transcript

Operator: Greetings, and welcome to the Zevia PBC fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jean Fontana, Investor Relations. Thank you. You may begin.

Jean Fontana: Thank you, and welcome to Zevia PBC’s fourth quarter and full year 2025 earnings conference call. On today’s call are Amy Taylor, President and Chief Executive Officer, and Girish Satya, Chief Financial Officer and Principal Accounting Officer. By now, everyone should have access to the company’s fourth quarter 2025 earnings press release and investor presentation made available this afternoon. This information is available on the Investor Relations section of Zevia PBC’s website at investors.zevia.com. Before we begin, please note that all financial information presented on today’s call is unaudited. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on management’s current expectations and beliefs concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today’s press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call, we will use some non-GAAP financial measures as we describe business performance.

The SEC filings as well as the earnings press release and presentation slides that accompany today’s comments, and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are all available on our website at investors.zevia.com. I will now turn the call over to Amy Taylor.

Amy Taylor: Thank you, Jean. Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2025 earnings conference call. We are proud of the transformation progress we delivered in 2025. Through a series of high-impact initiatives spanning product innovation, marketing, distribution, and supply chain, we not only significantly improved our financial performance, but also strengthened Zevia PBC’s competitive positioning within the better-for-you soda category. Before I speak to strategy, I will briefly highlight our performance. For 2025, we delivered net sales growth of 4% and improved adjusted EBITDA threefold to -$4.7 million. For the fourth quarter, net sales decreased 4% to $37.9 million as we lapped the pipeline fill to Walmart from last November and December.

Net sales for the quarter were impacted by a shift of our Costco rotation into January. Importantly, this program was a national one with premium in-store positioning reaching beyond our regional footprint and driving trial and awareness in underdeveloped and fast-growing markets. Adjusted EBITDA for the fourth quarter reached breakeven and was ahead of our expectations. Turning to the three strategic pillars that enabled this progress, I will start with amplified marketing. Our improved performance for the year was supported by powerful marketing that clearly differentiated Zevia PBC as the antidote to the artificial, and as a product with no fake ingredients and no fake claims.

Key campaigns showcased Zevia PBC’s use of creative, culturally relevant content and high-profile brand fans to boost brand awareness, reinforce our positioning, and appeal to consumers that are just trying to do a little bit better with healthier choices. For our second growth pillar, product innovation, 2025 was a breakthrough year. We introduced on-trend fruity flavors, such as Strawberry Lemon Burst, and retailer-exclusive Orange Creamsicle, both of which strongly resonated with consumers. We also began to elevate taste for select classic flavors, the impact of which will carry into 2026 in parallel with our package design evolution.

Our marketing and product initiatives helped to propel distribution, our third growth pillar, to historical peak levels in 2025, including a nationwide presence in Walmart, as we are an anchor brand within that retailer’s modern soda set, and at Albertsons, where we increased our shelf space and gained eye-level placement with a vertical brand block within their NextGen beverage set. Through these initiatives, we have strengthened our foundation for growth with brand, product innovation, and distribution working together to capitalize on favorable category and consumer trends that create strong tailwinds. Now in 2026, we are building on this momentum with a focus on expanding reach and driving trial to expand the user base and, ultimately, to accelerate growth.

So first, let us walk through our marketing initiatives. Zevia PBC is resonating with the consumer more than ever as we continue to show up as the antidote to the artificial. We kicked off this year with a playful campaign inviting consumers to join a “ZTOX,” a detox from artificial soda, with one simple swap: choose zero artificial, better-for-you soda instead. This month-long campaign featured influencer partnerships, an immersive activation at world-renowned DJ Diplo’s Run Club, sampling at Life Time Fitness’s Miami Marathon, and a bold out-of-home takeover across Atlanta. Early reads of editorial and social outcomes revealed that the campaign punched above its weight.

The next brand campaign in March will continue to reinforce Zevia PBC’s unique position and personality in a digital campaign also activated at retail. During our next call, I am excited to update you on summer brand campaigns bolstered by new and familiar high-reach brand ambassadors, our most significant investment in reach and cultural relevance to date. More to come on this as this and other initiatives will align with our spring and summer rollout of our dynamic new package design and will be supported by retail-driven, trial-driving programs focused on expanding the user base. Next, let us talk about the portfolio and 2026 product innovation.

While trust and affordability remain core differentiators for Zevia PBC, we are winning where it matters most in the category, which is taste, unlocking a broader consumer base and strengthening long-term brand relevance. We know that new products are outperforming legacy items in velocity, creating a halo effect that boosts legacy items as well. With that distinction, combined with brand and accessible price points, we are in a strong position to expand our consumer base and continue to drive strong repeat rates. Orange Creamsicle was a huge hit as the number one six-pack at Sprouts immediately following its initial launch and is now being rolled out as the hero flavor of 2026.

Fruit Punch and Peaches and Cream, which also saw successes in variety packs and as a limited-time offer respectively, are now rolling out nationally. Finally, after proving to be a hit and the top Zevia PBC SKU at Walmart, the new fruity variety pack can be found across retail starting in spring resets. We are bullish on this robust innovation pipeline overall and specifically as a complement to the legacy soda portfolio, enabling Zevia PBC to super-serve old-school soda fans and engage new, modern soda consumers with a light and fruity palate. This strong portfolio with improved packaging and taste across the board should be a key driver of both new users and increased consumption this year.

Now, building on the successes in our product innovation and in marketing, let us move on to our third growth pillar, distribution. We continue to make meaningful progress through our key distribution channels and step by step in new channels. In club, we are focused on building consumer acquisition through trial, and thus volume. Earlier successes this year include a new Costco front-of-store national rotation that represents a meaningful opportunity to drive trial with new consumers in underdeveloped and fast-growing markets. In the mass channel, we are growing our Canadian Walmart business to just over half of those stores, and our largest single retail opportunity in the U.S. is to win distribution at Walmart’s top competitor.

In grocery, we are leveraging the success story of Albertsons where expanded space and eye-level placement through a vertical brand block have yielded growth and, in recent months, share gains. We believe this performance, plus the new packaging, new items, and improved taste will yield more retailers to follow Walmart and Albertsons’ lead. Several spring sets are still forthcoming. In e-commerce, we continue to see accelerated growth in our business overall and through subscriptions. Plus, the introduction of our smaller eight-count option across flavors in this channel will continue to drive sales. In the medium term, we see meaningful opportunity to drive new distribution across all club operators, value and dollar channels, and in mass.

Long term, as is true for the whole category, convenience and food service remain a big opportunity both for trial and for continued growth. As the only zero-sugar, clean-label offering at an accessible price point, we are uniquely positioned to stand apart from a crowded competitive set in better-for-you soda in each of these key channels. One quick note before handing it over to Girish. We are pleased to announce the appointment of Andy Rubin as Chair of the Zevia PBC board. Andy has made valuable contributions over the past five years, most recently as our Lead Independent Director.

I look forward to further leveraging his strong background, including being the founder of Trove Recommerce, a practice ECG consultant, and a ten-year Walmart veteran where he served as VP of Corporate Strategy and as Chief Sustainability Officer. Paddy Spence will remain on the board, and we are grateful for his ongoing support. Finally, we are pleased to welcome Suzanne Ginestro as a director, as previously announced. She is a seasoned marketing executive with over 25 years of experience in brand building and consumer growth. Her background and track record of success will further strengthen our board capabilities.

In closing, I am energized by what our team has accomplished and even more so for the future as our strategic initiatives bear fruit and accelerate momentum. While we still have a lot of work to do, we are focused on the long term, and we believe we are well positioned to capitalize on the strong better-for-you beverage tailwinds well into the future. With that, I will turn it over to Girish.

Girish Satya: Thank you, Amy. Good afternoon, everyone, and thanks for joining our call today. 2025 marked the year of transformation for Zevia PBC. The strategic initiatives we deployed across the business enabled us to return to growth and vastly improve our financial profile. Beyond the strengthening of our financial position, we have also elevated our competitive positioning, which sets the foundation to drive future growth and profitability. Turning to our results, net sales in the fourth quarter decreased 4% to $37.9 million. The decrease versus the prior year was primarily due to lapping of the expanded distribution at Walmart in Q4 2024 as well as reduction in promotional activity versus the prior year.

Also, as Amy noted, our fourth quarter was impacted by the trade-up of our existing regional Costco rotation to a new national rotation program launched in January. This new program entails front-of-store placement, raising visibility for the brand as our new 30-can variety pack becomes available nationwide. Gross margin was 47.7%, a 150 basis points decline from 49.2% in the fourth quarter of last year, reflecting channel mix associated with the return to the club channel and higher tariff costs, which was offset by lower promotional activity. Selling and marketing expenses were $11.0 million, or 29.1% of net sales in 2025, compared to $16.5 million, or 41.7% of net sales in 2024.

Breaking it down, selling expense was $7.4 million, or 19.5% of net sales in 2025, compared to $10.0 million, or 25.3% of net sales in 2024. The improvement was largely a result of lower warehousing and freight transfer costs as we continue to benefit from our productivity initiatives. Marketing expense was $3.6 million, or 9.6% of net sales in 2025, compared to $6.5 million, or 16.5% of net sales in 2024. The decrease was primarily due to the timing of marketing spend as we lapped significant investment in our holiday campaign last year. We continue to balance brand and performance marketing with the objective of driving more awareness for Zevia PBC.

General and administrative expenses were $7.3 million, or 19.3% of net sales in 2025, compared to $6.8 million, or 17.3% of net sales in 2024. The increase was primarily driven by higher accrued variable compensation expense. As a result of the aforementioned factors, net loss significantly improved to $1.3 million from $6.8 million in the prior year. Adjusted EBITDA was approximately $50,000 compared to an adjusted EBITDA loss of $3.9 million in the prior-year period. Turning to our balance sheet, we ended the quarter with approximately $25.4 million in cash and cash equivalents and have an undrawn revolving credit line of $20.0 million.

Moving to our full year results, for the full year 2025, Zevia PBC achieved net sales of $161.3 million, an increase of 4%. The increase was primarily driven by higher volumes associated with the distribution expansion at Walmart. We expanded gross margins to 48.0% versus 46.4% in 2024 due to better product costing and more effective inventory management. Net loss more than halved to $11.1 million as compared to a net loss of $23.8 million in 2024. Adjusted EBITDA loss vastly improved to $4.7 million for the year compared to an adjusted EBITDA loss of $15.2 million for the full year of 2024.

Now turning to our outlook, in 2026 we plan to build on our momentum, leveraging our growth initiatives to broaden our consumer base through amplified marketing, sharpened product innovation, and expanded distribution presence. We are supporting these initiatives with strategic investments enabled by our improved cost structure and healthy balance sheet. For the full year 2026, we estimate net sales in the range of $169.0 million to $173.0 million, or 6% growth at the midpoint of the range versus 2025. Net sales expectations reflect the planned discontinuation of our tea line, which we expect to impact growth by 1.0 to 1.5 points.

Looking at cadence, I would note that the quarterly net sales volumes are expected to shift from previous years with higher volumes anticipated in the first and third quarters. There are several factors impacting this cadence, which are as follows: the Costco national program launched in the first quarter, which benefits net sales growth while having a dilutive impact on gross margin; the second quarter is expected to be impacted by the planned discontinuation of our offering; the lapping of sell-ins to Walgreens and Albertsons in the second quarter of last year; as well as a shift in marketing and promotional dollars spent from Q2 to Q3. This shift is to better align with our new packaging rollout.

Turning to profitability, we expect to realize the impact of planned price increases beginning in Q2. We are expecting a full-year adjusted EBITDA range from a loss of $1.0 million to positive $0.5 million, which incorporates an incremental $5.0 million in tariff-related aluminum costs beginning in Q2 as well as continued reinvestment in our business. Our guidance also assumes gross margins in the high-40% range starting in Q2, barring further increases in aluminum costs. We also expect to start realizing the last tranche of $5.0 million in savings from our productivity initiative towards the end of Q2. For 2026 Q1, we expect net sales of between $40.0 million to $42.0 million.

This guidance reflects volume gains associated with our national Costco program that began in January. While the Costco program yields lower gross margins, we believe an investment in the club channel will support growth in trial and drive awareness. We expect an adjusted EBITDA loss of between $1.6 million and $1.9 million, reflecting a mid-40% gross margin range. In closing, the progress we have made has positioned us to move confidently into the next phase of our strategic plan. With mid–single-digit household penetration and strong tailwinds in the broader better-for-you soda space, we believe we have ample runway for growth and improved profitability over the long term. I will now turn it over to the operator to begin Q&A. Operator?

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. You may press star two if you would like to remove your question from the queue. One moment please while we poll for questions.

Sarang Vora: Great. Thank you for taking the question. I wanted to start with the Costco rotation program. It is great to see that you are nationally up from regionally before. How does the program work? Can you help us understand: is it nationally, but it is still rotational, or will Zevia PBC be at Costco all through the year? Any color on the Costco program would be helpful. Thank you.

Amy Taylor: Sure. No problem. We are excited about the fact that we were able to kick off nationally at Costco through what is a road that took place at the beginning of the year, stronger visibility for the brand, and, almost most importantly, penetration into regions where we have not had Costco distribution before. We expect, going forward, in a couple of regions—I think Texas and some across the South and the Southwest—there are a number of regions where they have never carried Zevia PBC before. We saw very strong velocities, and we expect to continue in those regions, whether through additional regional rotations or, hopefully, as a new permanent item, which is the case in a few other regions.

The other opportunity is to reengage with Costco based on the success of the program to look at incremental national rotations in the future. So there are a couple of different ways forward, Sarang. We could gain new regions permanently, or we could gain incremental rotations, either regionally or nationally, based on what appears to be very strong performance out of the gates in the January program.

Sarang Vora: That is great. The second question I had was about the tariffs. Can you talk a little bit about exposure to tariff? I know you called it out about $5 million, but how are you mitigating that in some ways? It seems like there is a price increase coming up or trying to offset that. There are also some cost initiatives you have. Walk us through how you are mitigating that tariff exposure and how long it should last in your P&L line. When we started lapping it this year, that would be helpful. Thank you.

Girish Satya: Sure. What we will see in the P&L, of course, is increased exposure to increased aluminum costs, which is reflected in our guide. There are two things that we are doing to mitigate it. One, of course, as you mentioned, is the price increase, which we have communicated, and we will begin to see the impact of it in Q2. Secondly, we have the incremental $5 million, which is the last tranche of the savings from the productivity initiative, which again will also start hitting the P&L in Q2 as well. Those two items—price and incremental costs—are the main factors that we are leveraging to mitigate the increase of the aluminum exposure.

Jim Salera: Hi, Amy. Hi, Girish. Good afternoon. Thanks for taking our questions. I wanted to start off with maybe just a quick housekeeping item. Is the roughly $1 million or so that you came up short of the 4Q top-line guide that you provided in 3Q just by virtue of the Costco timing shifts, or is there anything else in there that we should be aware of?

Girish Satya: It is primarily due to the Costco timing shift. We had planned regional rotations in Q4. We moved those into a broader national rotation in Q1, so the volume shifted from Q4 to Q1.

Jim Salera: Got it. As we think about better visibility, obviously, locations in Costco and some other retailers, when is all of the new packaging going to be in market, and do you have any marketing programs around having the fully implemented new packaging to help drive some visibility and maybe call attention to that?

Amy Taylor: Absolutely. Thanks, Jim. The packaging is starting to show up on shelf now, and it looks amazing. It really pops. It looks delicious. It screams the specific reasons to believe in Zevia PBC. I think that is tremendous support for our positioning in the market, especially given the advantage that we offer versus our competition, especially against which we are on shelves now on a regular basis, given the way that the category has developed. It looks great on shelf. You will see it flow through because we are doing what we call a rolling launch largely into Q2.

I mentioned in prepared remarks that we have a heavily digital campaign, some of which will be showing up at retail in March at a brand level, but more specifically in parallel to the packaging rollout. Our improved taste will be rolling out at the same time across legacy of some of our classic flavors.

We have a spring-summer marketing campaign, which I am going to speak about a little bit more on the next call, which will engage some pretty familiar faces and high-impact, reach personalities that love Zevia PBC, and it is just a great opportunity to drive reach, awareness, trial, and then, given the fantastic new taste and the rate of innovation that we have been driving lately, also repeat. We are bullish on the summer. That will start really hitting the shelves and hitting the market late Q2 and support the business through the back half of the year and going forward.

Jim Salera: Great. If I can sneak one more in real quick, I think you finished with marketing spend for 2025 at about $20 million, maybe a little shy of that. Can you give us a sense for what overall marketing spending looks like in 2026 as we think about the balance between flowing through some of the cost savings versus reinvesting in visibility for the brand?

Girish Satya: Thanks, Jim. We will continue to increase investment in marketing. As a percentage of revenue, it will range between, let us call it, 12% to 13% of revenue in 2026, so a slight increase over 2025 as a percentage of revenue.

Eric Des Lauriers: Great. Thanks for taking my questions. First one for me, another follow-up on Costco. How many of these regions are new, and are any of these regions ones where you are also underpenetrated in other channels, or is it just club, or just Costco, where you have been relatively underpenetrated here? Thanks.

Amy Taylor: Sure, Eric. A little bit of each. The regions that have never carried Zevia PBC before are about 35% to 40% of the regions that we showed up in this national program. That is net new, and that is exciting to us from a trial-driving perspective, especially when you think about the fact that it is a variety pack. Everybody can find their favorite flavor. That trial-driving mechanism often supports growth across channels and brings people into the franchise for the first time. There is a lot of incrementality in the club business.

To answer the second part of your question, yes, a region like Texas where we see accelerated velocities in the national program is exciting to think about how our business could grow across channels. If you think about Texas and go east, we have lower market penetration on the East Coast than we do in the Midwest and across the West Coast. These step changes really help us to expand reach and help to be a catalyst for other channels as well and other specific geographies. We are excited about the Southeast, Texas, and the East Coast in general as benefiting from this national program.

Eric Des Lauriers: That is great to hear. Do any of the flavors in that variety pack contain either any of your new flavors or the new improved formulation?

Amy Taylor: New flavors as of now, yes—new as of 2025. New taste profiles for the classic flavors, not yet. Think about the pack design, the increase in marketing spend seasonally, and the improved taste profile all ramping up during peak beverage season, so late spring.

Eric Des Lauriers: That is great to hear. Last one for me, could you expand a bit on the DSD market—Pacific Northwest and, I believe, Arizona—how the trends there continue? Thank you.

Amy Taylor: We are learning that time in market with a DSD operator yields stronger results, meaning we are really starting to crack through distribution of display in grocery from our DSD partners. We see grocery in our DSD markets outperforming the rest of market. Very new news, we are starting to see some of our singles programs perform better than they have in the past because of what we are able to execute again in grocery, with our DSD partners’ help. We are leveraging some of those insights when we think about how we drive trial and, specifically, how we drive singles success through the spring and summer with the marketing and pack rollout that you and I were just discussing.

Convenience is more of a long-term opportunity. I believe that is true for the category in general. If we think about the fit of the shopper in the convenience environment to the category and its promise, it will just take a little more time. Our DSD partners are able to help us to test and learn in some regional pilots, and we continue to do that with a few success stories that help to learn what exactly sets the brand up for success at these early stages in the channel.

Andrew Strelzik: Good afternoon. Thanks for taking the questions. My first one—I think I caught this right—you made a comment about Albertsons and some of the successes there and kind of insinuated that other retailers may follow suit. Can you elaborate a little on what you were talking about there? Is the implication that there are some potential sales opportunities out there that are not, at this point, included in your guidance because you do not have full visibility to them?

Amy Taylor: Let me start with your second question, then I will go back into the grocery channel dynamics and specifically Albertsons. Our guide does consider, in some part, that we have yet to receive final spring-set communication from several retailers, and this is not atypical. In February, the resets are March, April, or May depending on the retailer. There could be some improvements in set, and, of course, we guide thoughtfully, thinking about what we know and what we do not know, meaning visibility into the channel. The comment on Albertsons is a significant learning for us around assortment, planograms, and innovation.

In Albertsons, in spring of last year, we increased our space by 30% by way of expansion of the category and by way of exciting new flavors. Albertsons took the majority of our flavors and, most importantly, built out a brand block for Zevia PBC, which was vertical, taking our brand to eye level. With that, we saw accelerating growth over the last six months. Over the last six months, we grew faster than the category, meaning we grew share, in our performance over the last six months, and that continues to accelerate in the last couple of four-week reads where we were close to doubling the growth of the rest of the category.

I say that to go back to when the product is properly placed on shelf, when it features all of our innovation, and when we have the right assortment, we have a very strong case study to take to other retailers and continue to expand on it. These big national grocery chains move slowly, but our expectation is that, over time, we are able to move more national and regional grocers in the direction that Walmart and Albertsons are going, which is now—six-plus months after the reset—really bearing fruit.

Andrew Strelzik: Got it. That was very clear. You gave some good color on some of the puts and takes through the year on the sales side and the sales growth side. I was wondering about gross margins through the year—what you can share on that or how we should think about gross margins for the year. It sounds like maybe 1Q is the low point with Costco, and then the pricing coming through in 2Q. Any color on that would be helpful. Thank you.

Girish Satya: Sure, Andrew. As you noted, in Q1 we will see a bit of a downtick from Q4 in terms of gross margin, particularly related to this national rotational program at Costco. Beginning in Q2, you will begin to see the impact not only of the price increase but some of the incremental mitigation factors around mitigating aluminum tariffs. We expect to see both of those starting in Q2. We expect in Q2 and thereafter margins to return back to the upper-40% range.

Eric Serotta: Great, thanks. A quick one for Girish. In terms of the price increase, can you give us some idea of the magnitude we are talking here—low single digits, mid single digits—what you are assuming? Then what are you assuming in terms of the elasticity impact? It seems a little different than in the past when everyone was taking pricing at the same time. Some of the CSD players have moved already, moved late last year. I am wondering your thoughts on elasticity. Then a question for Amy.

Girish Satya: As a reminder, we did not take price last year, and so we are taking price this year beginning in Q2. Elasticity, generally speaking, we have evaluated around 1.1 or so, which is what we have seen, and that is what was baked into our guidance.

Amy Taylor: One of the most important things on the price increase and on the elasticity question is that we have been a fast follower on price, which I think is appropriate for our brand and its size. We do have room on price over the next few years as we continue to build the brand, and we have been, most importantly, successful in projecting the impact of price increases, meaning our elasticity assumptions have been correct. We feel confident in our ability to implement price increases as planned and largely predict their impact on the business. In this case, that could be a very positive one.

Eric Serotta: Great. Amy, we are probably, what, 15 months or so into Walmart implementing the modern soda set—I guess it was late 2024, if I remember correctly. How are you seeing that set evolve in the interim? How are you expecting or seeing it evolve this year heading into and coming out of spring resets? Is the overall space for modern soda increasing, and how is your space within that set trending?

Amy Taylor: It was pretty cool to see the world’s largest retailer be a first mover in calling the set “modern soda,” which I think is very strong positioning. Other solid food retailers slowly are doing so, and they are pleased with the performance of the set, not only in literal performance from a velocity and incrementality perspective, but also in the shopper that it attracts. It is a very attractive shopper. It is a younger shopper. It is generally a higher-income shopper. Speaking to Zevia PBC specifically, we remain an anchor brand in that set. We are the multipack player in the set.

We are the take-home, stock-up brand, and we are at a more accessible price point—significantly so—relative to the rest of the set. We play a unique role. We brought some innovation to the table in July, and we are seeing strong growth from those SKUs, and we are pleased with the mix. We have grown as much from optimizing assortment—right packs, right flavors—as we have from space. Despite tremendous pressure from competition, we have held our space and made that space more productive in the form of a variety pack and bringing innovation to Walmart a little bit early. We are bullish on Walmart even as we lap the pipeline fill, and we continue to grow there.

We have seen strong market share implications within the customer itself given our expansion through last year and our accelerating velocities.

Operator: We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Amy Taylor for closing comments.

Amy Taylor: Thank you. Briefly, I would say that in 2025 we returned to growth, we cut adjusted EBITDA losses in half, we improved our gross margins even in the midst of a challenging macro, and we gained distribution. We are proud of the foundation that we have set, but, almost more importantly, we have in our pipeline powerful packaging changes, an accelerating pace of strong innovation, and improved taste across much of our portfolio. All of this is supported by a sharper brand which is resonating with the consumer. Our position as a clean-label, clear liquid, zero-sugar, affordable option that also tastes great—and increasingly tastes the best among better-for-you sodas—is more relevant than ever.

The fundamental changes and increased investments that we are making in the business set us up for the long term. Thanks for joining us today, and we look forward to speaking to you again next quarter.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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