- Consolidated net revenue was $11.4 million in Q1 2025, a 38% increase from Q1 2024
- Flow brand net revenue was $6.2 million in Q1 2025, a 5% decrease from Q1 2024
- Gross margin1 was 21% in Q1 2025, compared to (15)% in Q1 2024
- Adjusted EBITDA2 loss was $2.6 million in Q1 2025, compared to an Adjusted EBITDA2 loss of $9.7 million in Q1 2024
TORONTO--(BUSINESS WIRE)--Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) (“Flow” or the “Company”) today announced its financial results for the fiscal quarter ended January 31, 2025 (“Q1 2025”). All currency amounts are stated in Canadian dollars unless otherwise noted.
Management Commentary
“Flow continues to make strides against its strategic growth priorities and achieving its financial goals with a $7.1 million improvement in Adjusted EBITDA2 compared with the prior year. In Q1 2025, a 216% increase in co-pack revenue drove our 38% increase in net revenue, while Flow brand net revenue continued to close the gap on prior year results which included unprofitable contracts that have since been exited. Gross margin of 21% is a significant improvement from last year, but remains well below our potential as we absorb the cost of full capacity at the Aurora production facility while we worked through our challenges scaling production in the period. Our operating expenses have stabilized and we believe we have created the foundation for continued improvements in profitability, particularly in the second half of fiscal 2025,” said Nicholas Reichenbach, Founder and Chief Executive Officer of Flow.
Trent MacDonald, Chief Financial Officer and EVP of Operations, added, “In Q1 2025, Flow continued to focus on scaling towards full capacity utilization at the Aurora production facility, and this resulted in unfulfilled demand for Flow brand product and gross margin below our potential. We are making operational improvements day-by-day and see a path to sequential improvements in profitability over the course of fiscal 2025 reflecting our focus on profitable channels, a strong base of co-pack agreements and a much leaner operating structure.”
Financial Results for Q1 2025
Flow brand net revenue was $6.2 million in Q1 2025, a 5% decrease from $6.6 million in Q1 2024. Flow brand net revenue decreased due to the exit of commercial partnerships with retail and food service partners to meet the Company’s profitability targets and temporary disruptions to production leading to unfulfilled demand for Flow brand products.
Consolidated net revenue was $11.4 million in Q1 2025, a 38% increase from $8.3 million in Q1 2024. Offsetting the decrease in Flow brand net revenue, co-pack revenue increased 216% in Q1 2025, which is attributable to recently signed co-pack contracts and higher volumes under existing contracts.
Gross margin1 was 21% in Q1 2025, as compared to (15)% in Q1 2024. The improvement in gross margin1 reflects the consolidation of production to the Aurora production facility, improved utilization at the Aurora production facility, contribution from co-pack revenue, and a focus on higher margin channels for the Flow brand.
Flow reported an EBITDA2 loss of $4.6 million in Q1 2025, as compared to an EBITDA1 loss of $10.9 million in Q1 2024. The improvement in EBITDA2 loss relative to Q1 2024 reflects the factors impacting gross margin1 improvement, a 70% decrease in sales and marketing expense attributable to a one-time marketing rebate, and a 50% decrease in general and administrative expenses with the substantive completion of the Company’s operational transformation. Salaries and benefits increased 15% as compared to the prior year due to added personnel in the U.S. sales function.
Flow reported an Adjusted EBITDA2 loss of $2.6 million in Q1 2025, as compared to a loss of $9.7 million in Q1 2024. The Adjusted EBITDA2 loss is attributable to the same factors that impact EBITDA2 loss, removing stock-based compensation and restructuring charges.