Earnings Call Transcript - LSF Q4 2025

Operator, Operator

Ladies and gentlemen, thank you for joining us and welcome to Laird Superfood, Inc. Fourth Quarter 2025 Financial Results. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Trevor Rousseau, Head of Investor Relations. Trevor, please go ahead.

Trevor Rousseau, Head of Investor Relations

Thank you and good afternoon. Welcome to Laird Superfood, Inc.'s Fourth Quarter and Full Year 2025 Earnings Conference Call and Webcast. On today's call are Jason Vieth, Laird Superfood, Inc.'s President and Chief Executive Officer, and Anya Hamill, our Chief Financial Officer. By now, everyone should have access to the company's earnings release, which was filed today after market close. It is available on the Investor Relations section of Laird Superfood, Inc.'s website at investors.lairdsuperfood.com. Before we begin, please note that during this call, management may make forward-looking statements within the context of federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those described. Please refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. I will now turn the call over to Jason Vieth.

Jason Vieth, President and Chief Executive Officer

Good afternoon, everyone, and thank you for joining us today. I am Jason Vieth, CEO of Laird Superfood, Inc. And I am joined by our CFO, Anya Hamill. We appreciate you taking the time as we review our fourth quarter and full year 2025 results, which we released earlier today. Fiscal 2025 was a pivotal and transformative year for Laird Superfood, Inc. We delivered record net sales of $49.9 million, up 15% versus the prior year and in line with our revised guidance. In the fourth quarter alone, net sales rose 15% to $13.3 million. This growth was broad-based and especially strong in our wholesale channel, which surged more than 40% in both Q4 and for the full year. That momentum came from meaningful distribution expansion paired with continued strong velocities in grocery and club outlets. Retail consumption data for the latest quad week ending 02/22/2026 confirms the health of that wholesale acceleration. Across measured natural and MULO channels, coffee posted the strongest full-year performance of any Laird Superfood, Inc. product group, +45% dollar growth on +18% unit growth over the last 52 weeks. Shelf-stable creamers delivered +15% dollar growth for the year, maintaining the largest share of our portfolio at 28%. I am also excited to report a very successful relaunch of our refrigerated creamers during late Q4 into early Q1, which included reformulation to what we believe is the cleanest, best-tasting liquid creamer product in the market. In addition, we repositioned our creamer to an extended shelf life refrigerated product packed in a post-consumer recycled plastic bottle. We believe that these changes to a cleaner formula and an already recycled bottle improve our positioning with both our retailers and our consumers. And after a challenging 2025 for this product, we are already seeing strong momentum in the latest four weeks, up 7% in the natural channel versus the same period last year. I want to be clear that these results are no accident. They are direct proof that our strategy to win in coffee solutions, which includes coffee, creamers, and lattes, is working. Consumers are responding to our complete ecosystem of functional, better-for-you coffee and coffee companions. And that is translating into outsized velocity and distribution gains in our core categories. E-commerce remained resilient at roughly half of total sales, and softness in our direct-to-consumer platform was partially offset by strong continued growth on Amazon.com, further reinforcing the power of our coffee solutions portfolio with the everyday convenience shopper. While we appreciate the core set of consumers that come to our DTC site to explore and purchase our Laird Superfood, Inc. products, we harbor no illusion that Amazon will continue to win online volume in the future. For this reason, we will continue to leverage Amazon as the growth engine for our e-commerce sales. I also want to give a heartfelt acknowledgment to the entire Laird Superfood, Inc. team for the outstanding job they did of managing through the chaos of sharp commodity inflation, new tariff pressures, and ongoing supply chain volatility. Throughout 2025, they proactively secured strategic inventory ahead of tariff increases, built safety stock to protect service levels and avoid out-of-stocks, and maintained tight operational discipline across procurement, logistics, and cost control. That level of foresight and agility under pressure is exactly what allowed us to deliver top-line growth while keeping the business running smoothly, and I could not be more proud of how this team showed up every day. Now onto the other big news that we have shared over the last couple of months. Just two weeks ago, on March 12, we closed the acquisition of Navitas Organics, funded by the $50 million investment that we completed with Nexus Capital. This transaction is perfectly on strategy and represents a major step in our vision of building a scaled superfood platform. Navitas brings to Laird Superfood, Inc. a premium, purpose-driven brand with more than 20 years of history, $45.3 million in 2025 net sales, and a 31.8% gross margin. It adds complementary products, stronger reach in conventional grocery and club channels, new customers, and greater geographic diversity. Together, Laird Superfood, Inc. and Navitas instantly become a larger, more diversified platform with enhanced scale, cross-selling opportunities, and supply chain efficiencies we expect will drive both revenue growth and profit expansion in the years to come. The financing structure itself underscores our confidence in this path. Nexus invested $50 million upfront through the purchase of Series A preferred stock. Importantly, the investment agreement also gives us the option to call an additional $60 million from Nexus anytime within the next 270 days after closing, or up to 360 days if we are actively in discussions on another strategic transaction. These proceeds are earmarked for an acquisition or other growth initiative, with any remainder available for general corporate purposes. This financial structure gives us tremendous flexibility to move on additional opportunities should they arise. Of course, this investment did result in meaningful dilution to our common equity. On an as-converted basis, Nexus' stake represents approximately 56.2% of the company today. We are very transparent about that dilution because it is being exchanged for something that we believe is far more valuable: the immediate addition of a profit-accretive business that we expect will strengthen our overall earnings power and cash flow generation going forward. In short, we expect to be trading some ownership percentage today for a much larger, higher-quality earnings stream tomorrow. We are genuinely excited about the potential for additional acquisitions as we build out the leading superfood business in the country. With the capital access provided by Nexus, and the integration playbook we now have, we see a clear runway to continue consolidating within the superfood and functional food space. Our goal is to keep building scale, broaden our product portfolio, deepen our retailer partnerships, and ultimately create a category leader that delivers sustainable, profitable growth for years to come. Looking ahead, our priorities remain clear: drive continued wholesale momentum, protect and expand gross margins through synergies with Navitas, and execute a seamless integration while staying opportunistic on further M&A. With our strengthened balance sheet, expanded platform, and talented combined team, I have never been more optimistic about Laird Superfood, Inc.'s future. Before I turn it over to Anya for the detailed financial review, I want to thank every single Laird Superfood, Inc. teammate, our retail partners, our consumers, and now our new Navitas Organics colleagues. 2025 proved we can grow through turbulence, and 2026 is going to be the year that we show what a true scaled superfood platform can achieve. Anya, over to you. I will now turn the call over to Anya Hamill for the financial results.

Anya Hamill, Chief Financial Officer

Thank you, Jason, and good afternoon, everyone. I will now provide additional detail on our fourth quarter and full fiscal year 2025 financial results. As Jason highlighted, we closed the year with record net sales of $49.9 million, which was up 15% year over year, and Q4 net sales of $13.3 million, also up 15% versus prior year. I will build on those headlines with the underlying financial details. Our wholesale channel was the primary growth driver, increasing 44% year over year to $7.0 million in the fourth quarter, representing 52% of total Q4 net sales. For the full year, wholesale grew 41% to $24.9 million, representing 50% of total net sales. This channel mix shift is a direct reflection of our strategy to transition Laird Superfood, Inc. to a wholesale-led business, and the numbers confirm we are executing against that plan. E-commerce contributed $6.4 million, or 48% of Q4 net sales, reflecting a 6% decline year over year; softness in our direct-to-consumer platform was partially offset by continued growth on Amazon.com. For the full year, e-commerce contributed $25.0 million, or 50% of net sales, down 3% versus 2024. As Jason noted, we are focused on Amazon as the growth engine within e-commerce, and our DTC channel continues to benefit from a highly loyal repeat customer base. Gross margin in the fourth quarter was 34.1%, compared to 38.6% in the corresponding prior-year period. This contraction was driven primarily by increased product cost from inflationary commodity prices and the residual impact of tariffs that have now largely been canceled for our raw materials, as well as the settlement recoveries recognized in fiscal year 2024 that did not reoccur in 2025. For the full fiscal year, gross margin was 37.9%, compared to 40.9% in 2024. This year-over-year decline was driven by the same dynamics as in Q4: commodity and tariff pressures alongside the non-recurrence of prior-year settlement benefits. Despite these headwinds, we delivered full-year gross margins in the upper 30% range, consistent with our stated expectations. Our supply chain team continues to drive efficiency through direct partnerships with key raw material suppliers and co-packing partners, and we remain confident in our ability to sustain gross margins at levels competitive with best-in-class CPG companies. Total operating expenses for fiscal year 2025 were $22.3 million, compared to $19.9 million in the prior year, reflecting planned investments in sales and marketing to support our top-line growth, partially offset by continued discipline in general and administrative costs. Net loss for the fourth quarter was $1.8 million, or $0.16 per diluted share, compared to net loss of $0.4 million, or $0.04 per diluted share, in the prior-year period. This year-over-year increase in loss was driven primarily by $0.9 million in professional fees incurred in connection with the Navitas acquisition, as well as higher commodity- and tariff-related procurement costs. For the full fiscal year 2025, net loss was $3.3 million, or $0.31 per diluted share, compared to $1.8 million, or $0.18 per diluted share, in 2024, a year-over-year increase of $1.5 million. Let me be clear about what drove that: the $0.9 million in Navitas acquisition-related fees and $0.7 million in Pikibar's intangible assets impairment charge. Together, those account for $1.6 million, essentially the entirety of the year-over-year change in net loss. Excluding these two discrete nonrecurring items, our core business net loss was essentially flat year over year, even as we absorbed significant commodity inflation and tariff headwinds. That is a result we are proud of, and it reflects the underlying earnings progress of our business. I also want to highlight our adjusted EBITDA performance, which I believe is an important measure of our underlying business progress. For the full fiscal year 2025, we delivered positive adjusted EBITDA of $0.3 million, which is a significant improvement from a $0.7 million loss in 2024 and consistent with our commitment to achieve at least a breakeven adjusted EBITDA for the full year. This represents a $1.0 million year-over-year positive swing and reflects the operating leverage that we are beginning to generate as our top line scales. Now turning to our balance sheet. We ended fiscal year 2025 with $5.3 million in cash and no debt. Accounts receivable increased to $3.9 million from $1.8 million at year-end 2024, reflecting the timing of large wholesale shipments at year-end 2025, which were subsequently collected in 2026. Inventory ended the year at $7.8 million, down from its peak of approximately $11.0 million in 2025, consistent with our strategy to draw down the forward purchases we made earlier in the year in order to mitigate the impact of tariff-related cost increases. Cash used in operating activities was $2.8 million for fiscal year 2025, compared to $0.9 million provided by operations in 2024. The year-over-year change was primarily driven by working capital dynamics, specifically the inventory build in the first half of the year and the timing of year-end wholesale receivables. As those receivables have since been converted to cash, and inventory levels continue to normalize, we expect operating cash flow to improve throughout 2026. Now on to 2026 outlook. While we are not providing detailed formal guidance for fiscal year 2026 at this time, I do want to share our directional expectations for the combined business. As a starting point and for context, Navitas generated net sales of $45.3 million and gross profit of $14.4 million, reflecting a gross margin of approximately 31.8% for fiscal year 2025, and reported net income of approximately $1.6 million for that period. These results are on a historical stand-alone basis and were not included in Laird Superfood, Inc.'s consolidated 2025 financial statements. Combined with Laird Superfood, Inc.'s $49.9 million in 2025 net sales, we are building from a meaningful combined revenue base. Looking ahead, we expect net sales for the combined business to grow by at least high single digits in 2026, and we expect adjusted EBITDA to increase, driven by top-line growth and the realization of integration synergies across procurement, supply chain, and operations. We will provide specific full-year 2026 guidance in connection with our first quarter 2026 earnings release, and we look forward to sharing more details at that time. I will now turn the discussion back over to Jason for any closing remarks.

Jason Vieth, President and Chief Executive Officer

Thank you, Anya. In closing, fiscal 2025 was a year that tested our resilience and proved our conviction. We delivered record revenue, strengthened our wholesale momentum, successfully relaunched our refrigerated creamers, and, most importantly, took a transformative step forward with the acquisition of Navitas Organics and our partnership with Nexus Capital. We are no longer just a promising coffee and creamer brand. We are now a scaled, diversified superfood platform with greater reach, enhanced capabilities, and a clear runway for accelerated growth and margin expansion. The foundation we have built, combined with the talent and dedication of our combined teams, positions us exceptionally well for what is ahead. To our shareholders, thank you for your continued belief in our vision. To our retail partners, your support and partnership have been instrumental. To our consumers, your loyalty and enthusiasm for better-for-you functional products inspire us every day. And to every member of the Laird Superfood, Inc. and Navitas teams, thank you for your hard work, creativity, and unwavering commitment through a year of significant change. We enter 2026 with tremendous momentum and optimism. This is just the beginning of what we believe will be a multiyear journey to build the leading superfood company in North America. Thank you again for joining us today. We look forward to updating you on our progress when we report first quarter 2026 results. Operator, we will now open for questions.

Operator, Operator

We will now begin the question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Nicholas Sherwood of Maxim Group LLC. Your line is open. Please go ahead.

Nicholas Sherwood, Analyst, Maxim Group LLC

My first question is how much crossover in retail locations exists between Laird Superfood, Inc. products and the Navitas products? And has there been a substantial improvement in average items carried?

Jason Vieth, President and Chief Executive Officer

Hey, Nicholas. This is Jason. I thought the first part of your question was unclear — what was the last part?

Nicholas Sherwood, Analyst, Maxim Group LLC

The last part was, has there been an improvement in average items carried with the combined portfolio?

Jason Vieth, President and Chief Executive Officer

Got it. I need to mention the portfolio a little bit so it is clear where it is. In the case of the biggest—think about this business as a pretty similarly sized business to Laird Superfood, Inc. Navitas has more exposure to the wholesale channel than we do and does not have as much of an online business as we do. There is a significant amount of crossover when you consider retailers similar to Laird Superfood, Inc. They are predominantly in the natural channel. Navitas grew up through the natural channel, with the largest accounts being Whole Foods. So very similar to the Laird Superfood, Inc. portfolio that is now committed to this transaction. In terms of average assortment, we will be working on both of these brands. We are dividing both brands, so I want to be really clear on that. This is a planned deal forward where we will be managing multiple brands under the ticker symbol, but we will have a house of brands. Navitas is equally important, equally sized, with a great portfolio of products that compete in different categories, but also in very similar temperature states — shelf-stable bag or pouch products that are very much like other superfoods. So there is not really a consolidation of items in these states. It is actually an expansion of items as you consider both brands, but there is quite a lot of overlap, and we are working through that now with the combined sales organization, which will allow us to go to market in a more impactful way. All of those retailers that I mentioned will also help us in additional outreach. We are going to approach retailers and then determine where we belong. We indicated that as being the largest go-forward opportunity for us. Now we can go in with two exceptional brands and really play a much more important role to those retailers as well. So we are really excited about the assortment opportunities this creates, being able to leverage one brand for the other. Those relationships are super important in being able to utilize them across the two brands. We expect to see some really nice distribution years ahead.

Nicholas Sherwood, Analyst, Maxim Group LLC

Okay. Thank you for that detail. And then, switching gears, what have commodity prices looked like in the last month? Are oil prices higher? Are some of your suppliers having to raise their prices due to increased shipping costs and the like?

Jason Vieth, President and Chief Executive Officer

It is a great question. We are not seeing a lot of impact from small cost increases on the margin thus far. We are largely in contracts that we entered the year with, where we have strong pricing buys that we made. As we look at those relative to what is going on, we have very little product that is impacted by fuel- and distribution-related costs, and that has not shown up in our cost structure at this point. So we are cautiously optimistic that the routes that we run — which are largely Asia and South America, and with some sourcing from West Africa — will allow us to largely avoid the most acute inflation pressures affecting other routes.

Nicholas Sherwood, Analyst, Maxim Group LLC

Okay. And then my last question is, what sort of efficiencies can we see with the consolidation of Laird Superfood, Inc. and Navitas’ logistics? Is there going to be warehouse consolidation, more freight cost savings? Can you talk about that?

Jason Vieth, President and Chief Executive Officer

It is a great question, and one that we obviously spent time on in diligence, so we will have a lot more to say as we go forward. Both businesses currently operate with a model that uses co-packers and third-party distributors for nearly all manufacturing and logistics. There will be opportunities to combine those arrangements. We are working through the supply chain to identify not only cost but capability opportunities. You have to optimize cost across the broad portfolio, leveraging the scale that we have. As we become a larger business, that grows the opportunity for various suppliers to our business as well. We have some great partners, and because we have those partners, we are working through both sides of that ledger to do business more efficiently in the future. We certainly expect to see opportunity for cost savings and program consolidation.

Nicholas Sherwood, Analyst, Maxim Group LLC

Awesome. Thank you for all that detail. I will return to the queue.

Jason Vieth, President and Chief Executive Officer

My pleasure. Thank you.

Operator, Operator

If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. Your next question comes from the line of George Kelly of Roth Capital Partners. Your line is open. Please go ahead.

George Kelly, Analyst, Roth Capital Partners

Hey, everyone. Thanks for taking my questions. Maybe to start, I was hoping you could break down a little bit your gross—just the directional guidance you provided of high single-digit growth. I was hoping you could give us a little more just on expectations around each business, if possible. And are there certain product categories at each business that maybe you are going to deprioritize, and that is also factored into your guide? Just any context around that would be helpful. Did that go through?

Operator, Operator

Please hold while we correct for technical difficulties. Ladies and gentlemen, thank you for holding. The call will begin again shortly.

Jason Vieth, President and Chief Executive Officer

Hey, George. Are you still there?

George Kelly, Analyst, Roth Capital Partners

I am. Yeah. Jason, I can repeat the question if that would be helpful.

Jason Vieth, President and Chief Executive Officer

Yeah, thanks, George. We had a technical issue on our side. If you do not mind repeating that, that would be great.

George Kelly, Analyst, Roth Capital Partners

Not at all. Happy to. So I guess the question was if you could give a little more detail on your revenue guide for the year, the high single-digit growth. And I guess what I am trying to understand is does that account for the partial—it just looks like a deceleration from what both businesses have been doing, and so just trying to understand the dynamics. Maybe if you could give a business-level growth expectation, or does it not account for the partial-year contribution of Navitas, or maybe there is a deprioritization of certain product categories at each business. Just any more context would be great around the high single-digit growth guide.

Jason Vieth, President and Chief Executive Officer

That is right. Thanks, George, for asking about that. We want to make sure we hit this number. You hit it on the head with the portfolio evaluation that needs to take place to make sure that we are in all the right products. Across the business, we have some opportunity as we put the two businesses together to prioritize from a profitability perspective the right SKUs and make those the focus categories that we look to grow. We are in the midst of that now. There could be a little bit of deceleration for that reason as we go through this year. The target list is still being identified. We still have some work to do as we consolidate the two portfolios, and so, as a result, we are calling out high single-digit growth as a number that we feel confident we can achieve as we push the two businesses forward together as one portfolio.

George Kelly, Analyst, Roth Capital Partners

Okay. And then I guess a follow-up to that. Through that process, do you imagine that gross margin—gross margin was kind of fluid, I guess, with a lot of tariff complications in 2025 with the core business. What are kind of your gross margin expectations with tariffs going away and then the deprioritization? I would imagine those are lower-margin categories. Can you get the core business back in the high thirties? And should there be an uplift at Navitas as well, or how should we think about gross margin in 2026?

Jason Vieth, President and Chief Executive Officer

I will kick that off, George, and then I will let Anya jump in as well. You are exactly right. The margins on the Navitas business have not historically been as strong as Laird Superfood, Inc.'s margins over the last several years. We see opportunity by combining these businesses and working through the portfolio to highlight and grow SKUs that have higher margins. We see other opportunities as well to improve gross margin as we combine the two businesses, including consolidating footprints and sourcing improvements. Our expectation is to get back into the upper-30 percent range as we go forward. It just takes a couple of quarters to work through procurement contracts that were entered into by the individual businesses so we can get to better volumes and better pricing on the combined business. We will head back toward the upper thirties; it just needs time to let the integration and digestion process take place.

George Kelly, Analyst, Roth Capital Partners

Okay. And that is on a consolidated basis, you think you can get back there?

Anya Hamill, Chief Financial Officer

George, this is Anya. I would add to what Jason said: once we complete and internalize the acquisition fully, then on a run-rate basis, by the end of 2026, with the help from synergies—which will partially come from supply chain—we can get back to the high thirties on gross margins where Laird Superfood, Inc.'s core business has been.

George Kelly, Analyst, Roth Capital Partners

Okay. That is great. And then last one for me is just on some of Laird Superfood, Inc.'s innovation items. You mentioned the liquid creamer—you are pleased with the launch—and I know there was the coffee product, the instant coffee product. Curious if you could just talk high level about the performance of each and maybe the distribution plan or medium-term expectations. The liquid product—do you think you have the right product now to take it more broadly? That is all I had. Thank you.

Jason Vieth, President and Chief Executive Officer

Of course. We are really excited about the liquid relaunch. As you know, we have been through a few iterations on that liquid product. We are now in the best package that we have ever had, and I would say most preferred by consumers and retailers. It is a plastic bottle with post-consumer recycled content, which is important to consumers and especially to buyers in the natural channel. Inside that, we have the cleanest formula we have ever had. We have moved away from long shelf-life aseptic processing and developed a formula that is incredibly clean with no stabilizers and no fiber impact to hold it together. Every ingredient is one that consumers recognize. This is a great product that we are putting in front of retailers, and we expect to see significant distribution gains over the next years. It is not a large part of the portfolio today, but it addresses a massive market full of products that are not very healthy, and we see real opportunity there. Beyond that, we launched the protein coffee product that you mentioned. It had a nice launch with a natural channel reseller that we granted exclusivity to, and we are still working through the data while starting to take it out to additional retailers, so you should see expansion in the coming quarters. It hits the protein trend with 10 grams per serving and tastes unlike anything else in the market. On the Navitas side, we've had success with a Trail Mix product that went into club and is expanding online, and the Bites products are performing well across multiple SKUs. There is a lot of white space in conventional grocery (MULO) for both brands, and with a sales team that is now twice as large, we expect considerable opportunity to expand distribution across all these products.

George Kelly, Analyst, Roth Capital Partners

Thank you.

Operator, Operator

There are no further questions at this time. I will now turn the call back to Jason Vieth for closing remarks.

Jason Vieth, President and Chief Executive Officer

Thank you, Operator. Sorry we are having some technical difficulties on our side today. Thanks for staying with us, and thanks to all of you for joining us again today. We are extremely proud of everything that our team has achieved in 2025. We delivered strong results through focused execution and relentless innovation. As we look ahead, we are genuinely excited about the transformative opportunities that lie in the combined future with Navitas. We appreciate your continued support and interest in the journey, and we look forward to updating you on progress throughout the year ahead. Thank you, and wishing you all a great day.

Operator, Operator

This concludes today's call. Thank you for attending. You may now disconnect.