Freshpet (FRPT) investor relations material

Executive summary

• Net sales grew 13.1% year-over-year to $297.6 million in Q1 2026, driven by volume gains across multiple channels and supported by manufacturing scale, broad product lineup, and omnichannel distribution.

• Net income reached $48.5 million, reversing a prior year loss, primarily due to a $62.0 million gain on the sale of an equity investment and higher sales.

• Adjusted EBITDA increased to $37.9 million, up $2.4 million year-over-year, with margin at 12.7%.

• Household penetration and MVP/ultra-heavy user growth outpaced overall household growth, reinforcing market leadership in fresh pet food.

• Continued to gain market share in the fresh pet food category, leveraging new technologies and operational effectiveness.

Financial highlights

• Q1 net sales were $297.6 million, up 13.1% year-over-year, primarily volume-driven.

• Adjusted gross margin improved to 46.9% from 45.7% year-over-year.

• Net income was $48.5 million, a $61.2 million increase from the prior year, driven by the sale of an equity investment and higher sales.

• Free cash flow was $12.7 million, a $34.4 million increase year-over-year.

• Cash and cash equivalents increased to $381.4 million, mainly from the equity investment sale.

Outlook and guidance

• Raised 2026 net sales growth guidance to 8%-11% (from 7%-10%).

• Adjusted EBITDA guidance remains at $205-$215 million, with sequential improvement expected.

• Capital expenditures for 2026 projected at ~$150 million, focused on plant expansion and operational efficiency.

• Anticipates being free cash flow positive in 2026, with flexibility to increase capex if technology rollout accelerates.

• 2027 targets: net sales growth above category, at least 48% adjusted gross margin, and 20%-22% adjusted EBITDA margin.