Key Highlights

● Net sales rose sharply and the net loss narrowed

● Full-year sales outlook was raised

● Fuel and aluminum cost estimates eased

● Growth Equity Investment added to a debt-free balance sheet

Zevia PBC (NYSE:ZVIA), a smaller name among packaged beverage consumer stocks, reported third-quarter results, showing net sales well above the prior-year period, a slightly wider gross Margin and a smaller net loss. The maker of naturally sweetened, zero-sugar drinks also raised its full-year outlook and pointed to a growth equity investment agreed in October as the funding behind a faster push into new products and distribution.

The company's release and filed with the US Securities and Exchange Commission, laid out a period in which Volume and pricing both worked in its favor. Volume rose at a double-digit pace, with a national rotation in the club channel and strength in E-commerce doing most of the lifting, and pricing actions taken earlier added to the increase.

The result also compared favorably with what management had told investors to expect. On the second-quarter call in August, Chief Financial Officer Girish Satya guided third-quarter net sales to a range that the actual figure cleared, and guided to an adjusted EBITDA loss noticeably deeper than the one the company ultimately reported. Chief Executive Alexandre Ruberti called the outcome better-than-expected in the release, adding that the company now had the resources and momentum to accelerate growth.

Where the Sales Came From

Satya told analysts on the Earnings Call that stronger-than-planned consumer pull on the club rotation and continued strength in digital channels explained the upside. He also said promotional spending came in lower than expected, with some promotional dollars held back. That detail matters because the August outlook had assumed deeper promotions during the quarter.

Ruberti singled out Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT).com among the online performers. He said a limited-time product sold out quickly on Walmart.com, and described early signs that refreshed packaging and new fruitier flavors were resonating with shoppers. In the food channel, he cited an increase in dollar velocity as evidence that shoppers were accepting recent price moves.

Club Business has been a source of swings for the company. Satya said on the call that a club reset had caused fluctuations over several quarters and that he expects the channel to contribute more consistently going forward. A similar expectation was voiced in August, when he said club was likely to become steadier over time.

Margin, Costs and the Aluminum Question

Gross margin improved modestly from the prior-year quarter. The release credited pricing, and the absence of an obsolete-inventory write-down that had weighed on the year-earlier period and was tied to a package redesign. Higher aluminum costs worked in the opposite direction, as management had signaled in August, when Satya warned of a bigger aluminum impact in the second half.

The cost picture nonetheless turned out milder than feared. Zevia now assumes smaller incremental fuel and aluminum costs for the full year than it estimated previously. Satya said on the call that fuel in particular came in below initial expectations for the quarter.

Operating expenses told a story of deliberate spending. Selling costs edged higher on freight and fuel, partly offset by Warehousing savings. Marketing rose more sharply as the company paid for brand awareness, and Satya linked that increase to the Cardi B campaign. General and administrative costs rose in dollars on personnel and variable compensation, partly offset by lower professional fees, yet fell as a share of net sales. Those moves left the adjusted EBITDA loss narrower than a year earlier, and the net loss and loss per share smaller as well.

The Raised Outlook, Read Closely

Zevia lifted its full-year net sales outlook above the range it held in August, and moved its adjusted EBITDA expectation from a clear loss to somewhere between breakeven and a small loss. Satya said the updated net sales figure already absorbs a drag from a discontinued product. In August he had identified that discontinuation as the company's tea line.

The fourth-quarter guidance is noticeably quieter. Satya described modest growth at the midpoint, with an adjusted EBITDA loss and gross margin roughly flat from the prior-year period. He called the period seasonally weak and said the guidance allows for possible shifts in retailer shipment and inventory timing.

The company did not provide a reconciliation of its adjusted EBITDA outlook to the nearest standard accounting measure, citing variable reconciling items, which is a point readers comparing guidance with reported results may wish to keep in mind.

Year-to-Date Picture and the Balance Sheet

Over the year to date, net sales and Gross Profit both increased from the same stretch of the prior year, and the net loss narrowed. Adjusted EBITDA swung from a loss to a small profit. Operating Cash Flow also turned positive, against cash used during the comparable period.

The Balance Sheet is a central part of the company's argument. Zevia ended the quarter with more cash than at the end of last year, no outstanding Debt and an undrawn revolving Credit facility. Inventories fell from the year-end level. Satya said on the call that cash stood substantially higher once the GP Investments transaction closed.

Cost discipline has run alongside the growth effort. Satya said in August that the company had already removed a substantial amount of cost, and on the latest call he reaffirmed further savings expected to begin early next year, which he said would be reinvested in the reset of the business.

What GP Investments Brings

The release says that in October the company signed a definitive agreement with a fund managed by GP Investments Ltd. to issue convertible preferred stock in exchange for growth equity. It does not set out pricing, conversion terms or governance rights in the results document, so the release alone does not show how the arrangement could affect existing holders over time.

Ruberti told analysts the deal brings Capital as well as board-level strategic and operational expertise. Satya said in the release that the funding gives the company more flexibility to invest in innovation, distribution and brand building. On the call, management said the company had completed the investment, whereas the release dated the same day describes a definitive agreement signed in October.

Singles Become the Priority

Ruberti, who held his first earnings call as chief executive in August after serving on the board, has framed singles as his principal commercial opportunity. On that call he said Zevia holds a modest share of its overall category, about double that within modern soda multipacks, and none at all in singles. He said plainly at the time that the business is built around multipacks and has no singles offering. He presented single cans as the main vehicle for discovery and trial, and pointed to improved taste, a regular-size can and a revised price-value equation as reasons the timing now works.

The latest call moved that idea closer to execution. Ruberti described planned expansion into additional grocery doors in the US and Canada and greater visibility in natural channels, backed by merchandising and promotions. Responding to an analyst, he said the company has historically sold multipacks, that next year is about proving singles, and that data shows better share where singles are on the shelf.

Retail Plans for the Coming Year

Management outlined specific placements. Ruberti said Target will run a national limited-edition offering with end-cap Placement beginning in February, and that Sam's Club will run a rotation beginning in March. He also mentioned another Costco (NASDAQ:COST) rotation and a Partnership expanding into food channels.

Behind those placements sits what the company calls a hybrid go-to-market model. Ruberti said this involves a deeper internal team, more Training and merchandising support for its West Coast direct-store-delivery network, third-party merchandising agencies outside that network, and continued expansion in e-commerce and food service. He described the added spending as extra investment next year but did not size it.

The company says its drinks are sold across a broad base of retail locations in the US and Canada, spanning grocery, drug, club, mass, natural, convenience and e-commerce outlets. Its products are described as Non-GMO Project Verified, gluten-free and vegan, positioning that underpins the wellness-oriented audience Ruberti has said the brand wants to reach.

Brand Spending Meets a Younger Audience

The Cardi B campaign is the most visible element of the brand effort. Ruberti reported a large volume of impressions, growth in net new social followers and a wave of email signups, along with a gain in Brand Awareness among younger adults. He cautioned that it was too soon to quantify any effect on retail velocity, so the sales link remains unproven by the company's own account. A flavor collaboration with the performer is scheduled to launch in January.

Asked how marketing will evolve further down the funnel, Ruberti said the next phase is meant to convert awareness into trial through new product launches, digital investment and creators and influencers. He gave no spending level for the longer term. The August call had set the broader direction, with the target audience shifting toward younger, digitally engaged families and marketing judged more strictly on return and Acquisition efficiency.

Innovation Beyond Traditional Soda

Perhaps the largest strategic signal concerned products outside soda. Ruberti said innovation will be consumer-led, built around taste, functionality and occasion, and that the company plans a small group of new products in the second half of next year, digital-first, with a fuller rollout the year after. He stressed these would not be flavor extensions, cited functional and wellness beverages as areas of interest, and said products failing internal tests would not launch.

That ambition carries a cost. Satya said innovation is likely to dilute gross margin in the short run because of marketing and launch support, while more premium product families could add to margin over time. Ruberti said growth next year will come mainly from the core, and described the period ahead as one of harvesting the current portfolio while testing new ideas. He also spoke of the potential to expand the business substantially over time, a statement of ambition rather than a forecast with a date attached.

Pricing Without a Further Move

Pricing has been an important support this year, and the company has tried to apply it carefully. Satya told analysts in August that Zevia took a price increase preemptively, and said another move during the year was unlikely because consumers were seeking value. The third-quarter call offered the first read on how that decision landed. Satya said a higher average selling price reflected those actions, while Ruberti's food-channel velocity comment suggested shoppers had not walked away.

Packaging is the other visible change on the shelf. In August, Ruberti said the national rollout of the refreshed design was nearly complete, and that early velocities in the natural channel looked higher, although he considered it too early to judge. The latest comments were similarly hedged, describing early signs rather than a measured result. The package change also explains part of the year-on-year margin comparison, since the earlier redesign produced the inventory write-down that the company did not repeat this time.

From Foundation Years to a Test of Execution

Ruberti closed the latest call by placing the results in a longer sequence. He described the preceding couple of years as a period of building foundations, the current year as setting up growth, and next year as a time to harvest the existing portfolio while testing new ideas. That framing follows a Leadership change this year, with Ruberti thanking outgoing leader Amy Taylor on his first call and saying he spent his early weeks listening to staff, customers, suppliers and investors.

The adjusted figures are worth reading alongside the reported ones. Adjusted net loss excludes restructuring and certain litigation costs, and the gap between adjusted and reported loss was small in the quarter but wider over the year to date, when restructuring and litigation items were larger. Non-cash equity-based compensation was little changed from the prior-year quarter.

Open Questions After the Report at Zevia PBC

Several items remain unresolved on the company's own telling. Management has not sized the extra investment planned for next year or a longer-term marketing budget, and it declined to give figures for the Target and Sam's Club programs relative to singles. Whether the awareness gains translate into repeat purchase at the shelf has yet to be shown, and the release's forward-looking cost assumptions depend on fuel and aluminum.

For now the reported numbers show a company with rising sales, a smaller loss and more financial room than a year ago, heading into a seasonally softer quarter with a plan that asks for more spending before the returns can be measured.