Barfresh signals $30M–$35M 2026 revenue guidance following Arps Dairy acquisition

Earnings Call Insights: Barfresh Food Group (BRFH) Q3 2025

MANAGEMENT VIEW

* Riccardo Delle Coste, Founder, Chairman, President & CEO, opened the call by stating, "the third quarter marked a transformational period for Barfresh as we delivered our highest quarterly revenue in the company history, positive adjusted EBITDA and completed a strategic acquisition that fundamentally enhances our business model and long-term growth trajectory." He emphasized the completion of the Arps Dairy acquisition, which provides Barfresh with its own manufacturing capabilities and is expected to drive top line growth.
* Delle Coste reported that the Defiance, Ohio, manufacturing facility is "nearing completion and expected to be fully operational in 2026" and that production has already started at the existing facility with immediate benefits to supply chain control and operational efficiency.
* He highlighted that revenue for the third quarter was $4.2 million, a 16% year-over-year growth, citing improved production consistency and expanded distribution, especially in the education channel with the Pop & Go 100% Juice Freeze Pops gaining traction.
* Delle Coste shared, "We achieved this even though we faced additional manufacturing challenges and start-up issues for our Juice Freeze Pops at one of our co-packers. The manufacturing capacity issues that constrained our first half performance are expected to be fully resolved by the end of the fourth quarter."
* He described positive results from the 2025-2026 school year bidding process and noted, "we remain at only approximately 5% market penetration in the education channel overall, which continues to represent substantial runway for growth."
* Delle Coste announced, "we achieved positive adjusted EBITDA in the third quarter, a major milestone that demonstrates the operational momentum we're building and validates our path to profitability."
* Fiscal year 2025 revenue guidance was reiterated at $14.5 million to $15.5 million and preliminary fiscal year 2026 revenue guidance was set at $30 million to $35 million, reflecting the contribution from Arps Dairy and continued market penetration.
* Lisa Roger, CFO, stated, "Revenue for the third quarter of 2025 increased to $4.2 million, representing our highest quarterly revenue in company history and 16% year-over-year growth."
* Roger added, "Gross margin for the third quarter of 2025 improved to 37% compared to 31% in the first half of 2025."
* Roger explained that net loss for the third quarter improved to $290,000 compared to $513,000 in the third quarter of 2024, with adjusted EBITDA for the third quarter a gain of approximately $153,000, a substantial improvement from the prior year period loss of approximately $124,000.

OUTLOOK

* Fiscal year 2025 revenue guidance remains at $14.5 million to $15.5 million, and preliminary fiscal year 2026 revenue guidance is $30 million to $35 million, as reiterated by management.
* Delle Coste said, "guidance we've reiterated today of $14.5 million to $15.5 million for fiscal year 2025 and $30 million to $35 million for fiscal year 2026 reflects the transformational nature of our strategic initiatives and our confidence in executing our growth plan."
* Management expects the Arps Dairy acquisition to be accretive to earnings in fiscal year 2026 and forecasts positive adjusted EBITDA in fiscal year 2026.

FINANCIAL RESULTS

* Third quarter revenue was $4.2 million, a record high for the company and a 16% increase year-over-year.
* Gross margin for the quarter was 37%, up from 31% in the first half of 2025 and returning to the 38% level achieved in the third quarter of 2024.
* Net loss improved to $290,000 from $513,000 in the same period last year.
* Adjusted EBITDA recorded a gain of $153,000, compared to a loss of $124,000 in the prior year period.
* Selling, marketing, and distribution expenses were $941,000 or 22% of revenue, compared to $990,000 or 27% of revenue in the third quarter of 2024.
* G&A expenses were $844,000, with $214,000 attributed to acquisition-related expenses for Arps Dairy.
* As of September 30, 2025, cash and accounts receivable were approximately $4.4 million, and inventory was approximately $1.1 million.

Q&A

* Nicholas Sherwood, Maxim Group LLC, asked about rebuilding trust and reintroducing products to schools after prior supply issues. Delle Coste responded, "we've been staying in close contact with our customers and really communicating where things are at ... we've just gone into our own manufacturing facilities and just building the relationships really to make them aware that we have got product coming down the pipe."
* Sherwood asked if the Q4 to Q1 transition was a pilot trial or a full reentry for sales to schools. Delle Coste replied, "when we go back to the schools and they put us back on the menu, the sales go back immediately. We don't need to retrial the product."
* Sherwood inquired about CapEx plans for retrofitting manufacturing facilities. Delle Coste cited a $2.3 million government grant to support construction and equipment needs and explained, "The plan is to move into the new facility out of the old facility. So a lot of the equipment would be going over. And if we need some new pieces to be upgraded as we move into the new facility, we'll address those at the time, and we may look at how we finance those."

SENTIMENT ANALYSIS

* Analysts focused their questions on customer retention, sales ramp-up timing, and capital expenditures, reflecting a neutral to slightly positive tone, with no confrontational or skeptical language present.
* Management maintained a consistently confident tone during prepared remarks and the Q&A, emphasizing operational improvements and strategic advantages: "We have not only delivered record financial performance and achieved positive adjusted EBITDA, but we have also positioned the company for unprecedented growth through our strategic acquisition of Arps Dairy."
* Compared to the previous quarter, the sentiment from analysts and management shifted from addressing operational challenges and supply constraints to a tone of recovery and forward-looking confidence.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter featured record revenue and the company's first positive adjusted EBITDA, compared to Q2's revenue and EBITDA losses.
* Strategic focus shifted from resolving manufacturing bottlenecks and building inventory to leveraging the Arps Dairy acquisition for integrated manufacturing and long-term growth.
* Guidance was raised from $12.5 million–$14 million in Q2 to $14.5 million–$15.5 million for 2025, and new preliminary guidance for 2026 of $30 million–$35 million was introduced.
* Analysts' questions transitioned from immediate supply chain issues and customer menu reentry to operational execution and capital planning for new facilities.
* Management's confidence increased, with a shift from problem-solving language to highlighting transformational milestones and future growth.

RISKS AND CONCERNS

* Management acknowledged near-term margin dynamics as Barfresh transitions production to the new facility, with start-up and implementation costs expected to temporarily impact margins.
* The integration of Arps Dairy’s milk processing business, which has a different margin profile, may affect reported margins but is positioned as providing stable cash flow and diversification.
* Capacity issues for Juice Freeze Pops at a co-packer persisted during the quarter but are expected to be resolved by year-end.
* The company continues to address customer reintroductions after prior supply constraints, with many expected to return in Q4 and Q1.

FINAL TAKEAWAY

Barfresh Food Group’s third quarter of 2025 marked a turning point with record revenue, a return to positive adjusted EBITDA, and a strategic acquisition that secures in-house manufacturing capacity. Management reiterated and raised revenue guidance for 2025 and provided a strong preliminary outlook for 2026, supported by expanded production, improved operational efficiency, and growing market penetration in the education sector. The integration of Arps Dairy is expected to drive both top line growth and profitability in the coming year, positioning Barfresh for accelerated expansion and value creation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/brfh/earnings/transcripts]

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