Zevia PBC (ZVIA) delivered its cleanest quarter in some time. The company posted a third-quarter loss of $0.03 per share, beating the consensus estimate of -$0.05 by 40.0%. The loss improved 25.0% from a year ago. Revenue rose 18.4% to $48.34 million, topping the $44.9 million consensus by 7.7% and clearing management's own $44-46 million outlook by a wide margin. Management also raised full-year sales and adjusted EBITDA guidance and announced a $20 million growth equity investment from GP Investments. The central tension is that the momentum is real but uneven. Third-quarter growth leaned heavily on a national club rotation, the fourth-quarter outlook implies only about 2% growth, and the stock entered the report near the bottom of its post-August range.
The quality of the beat holds up better than most small-cap consumer turnarounds, though it deserves some scrutiny. Volume rose 14.4%, with roughly four points of growth coming from pricing. That mix suggests price increases are sticking, a point reinforced by a 4% rise in food-channel dollar velocity. Gross margin improved 80 basis points year over year to 46.4%. Part of that gain, however, came from lapping a $0.8 million obsolete-inventory write-down tied to last year's package redesign.
The adjusted EBITDA loss narrowed to $0.9 million from $1.7 million, far better than the -$3.0 million to -$3.5 million management had guided. The GAAP net loss improved to $2.2 million from $2.8 million. The balance sheet trend is arguably more encouraging than the income statement. Nine-month operating cash flow swung to a $5.5 million inflow from a $4.2 million outflow a year earlier, and cash rose to $29.5 million with no debt.
The sequential picture is less tidy. Revenue growth swung from 21% in Q1 to just 1.1% in Q2 and back to 18.4% in Q3, so the trajectory remains choppy and highly dependent on club placements and promotional timing. Gross margin slipped from 48.9% in Q2 to 46.4% on aluminum costs. Marketing also jumped to 14.8% of sales from 11.1% in Q2. Management made clear that elevated brand and launch spending will continue, which pushes meaningful margin expansion further out.
Guidance moved in the right direction across the board. Full-year sales are now expected at $177-179 million, up from $170-175 million, implying roughly 10% growth versus about 7% previously. The adjusted EBITDA range rose to breakeven to a $0.4 million loss from a $2-4 million loss, helped by a smaller fuel and aluminum headwind of about $8.5 million versus $11 million. Even so, Earnings Whispers characterizes the outlook as in line. That fits with a fourth-quarter range of $37.5-39.5 million that implies only modest growth and flags a possible retailer inventory-timing impact. In other words, much of the raise reflects the Q3 outperformance rather than a sharper exit rate.
The forward story is where the tone changed most. The new CEO moved from a Q2 listening tour to a funded growth agenda. Pro forma cash of about $50 million plus an undrawn $20 million revolver supports a push into functional and wellness beverages, with two to three non-soda products launching digitally in the second half of 2027. Management, which spoke of aspiring to triple the business over time, expects those products to be gross-margin accretive. Nearer-term catalysts include:
- a Target limited-edition offer in 900-plus stores starting in February;
- a Sam's Club rotation and another Costco rotation;
- a Cardi B signature flavor in January;
- food-service entry through Adopt Foods.
Bears still have legitimate ammunition. The convertible preferred brings dilution, and 2027 singles placements are not fully confirmed. Expansion into new categories under new leadership carries execution risk, and 2027 growth will still depend mostly on the core soda line.
Investor sentiment improved meaningfully, moving from slightly negative (-0.09) to modestly positive (+0.20). The price action tells a harsher story. As of the day before the report, shares were at $1.17, down 27.8% from the $1.62 open after the August report. They sat 17.7% below the 200-day moving average and just 5.4% above the inter-earnings low of $1.11 set on November 2. Earnings Whispers trend signals remain mostly negative, with price, sequential growth and AVWAP readings all pointing lower. The market had been pricing in skepticism that this report directly challenged.
The bottom line is that Zevia gave investors a materially better quarter, a higher outlook and the capital to pursue a broader strategy. Still, the underlying growth path remains lumpy and margin expansion is being deferred in favor of investment. The report strengthens the turnaround narrative, but sustaining it will require proof that new distribution wins and product launches can replace one-time rotation lifts.