BRFH

Image source: The Motley Fool. Friday, Aug. 14, 2026 at 4:30 p.m. ET Founder and Chief Executive Officer - Riccardo Delle Coste Chief Financial Officer - Lisa Roger Operator: Good afternoon, everyone, and thank you for participating on today's second quarter 2026 Earnings Conference Call and webcast for Barfresh Food Group. Joining us today is Barfresh Food Group's Founder and CEO, Riccardo Delle Coste; and Barfresh Food Group's CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions. The discussion today will include forward-looking statements. Except for historical information herein, matters set forth on this call are forward-looking within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company's commercial progress, success of its strategic relationships, and projection of future financial performance. These forward-looking statements are identified by the use of the words such as grow, expand, anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential, forecast and project, continue, could, may, predict and will and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements other than the statements of historical fact that address activities, events or developments that the company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments, and other factors that the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of the company. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, investors are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date they are made. The content of this call should be considered in conjunction with the company's recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K and the quarterly report on 10-Q, current reports on Form 8-K, including any warning, risk factors and cautionary statements contained therein. Furthermore, the company expressly disclaims any current intention to update publicly any forward-looking statements after this call, whether as a result of new information, future events, and changes in assumptions or otherwise. In order to aid in understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including EBITDA, adjusted EBITDA, which are reconciled in tables in the business update release to the most comparable GAAP measures. The reconciling items are nonoperational or noncash costs, including stock compensation and other nonrecurring costs such as those associated with acquisition-related expenses. Management believes that EBITDA and adjusted EBITDA provide useful information to the investor because they are directly reflective of the performance of the company. Now I'd like to turn the call over to CEO of Barfresh Food Group, Mr. Riccardo Delle Coste. Please go ahead, sir. Riccardo Delle Coste: Good afternoon, everyone, and thank you for joining us for our second quarter 2026 earnings call. I want to start with the big picture of where we stand. We are in the middle of transforming Barfresh from a company that depended entirely on third-party co-manufacturers into one that controls its own production. And that work touches 3 parts of the business this quarter: our commercial momentum in the education channel, the ramp of our existing Arps Dairy facility and the construction of our larger facility in Defiance, Ohio. All 3 moved forward in the second quarter, though not all of them moved as quickly as we had hoped. I will walk through each one, and then Lisa will take you through the numbers in detail. On the commercial side, this year is about stabilizing the business, bringing control of production in-house, earning customers' trust back, winning back the customers we had lost due to supply interruptions, and setting up for a great 2027. Revenue in our frozen beverage and food segment, consisting primarily of legacy Barfresh products, increased 9%, driven largely by contributions from Arps Dairy. Combined with the raw and processed milk segment, which added $2.9 million of revenue this quarter, the acquisition successfully delivered top line growth and allowed us to reengage with customers to rebuild the legacy Barfresh business. We look forward to seeing the results of these rebuilding efforts materialize in the second half of 2026. Where we fell short was on the production side. This quarter's results landed below where we expected them to be. The ramp at our existing Arps Dairy facility took longer than we had modeled, and the extra costs that came with that slower ramp pulled down both our gross margin and adjusted EBITDA more than we planned for when we gave guidance back in May. Given where we are at, at the halfway point of the year, we have taken a more conservative view of how quickly we will reach normalized production, and that is reflected in the revised full year guidance Lisa will walk through in a moment. None of that changes how we think about the size of the opportunity in front of us once our manufacturing platform is fully up and running. That has not moved. Let me provide some additional detail behind that shortfall and what we are doing about it, starting with why we made the acquisition in the first place. The Arps acquisition was a key strategic move because we had become reliant on co-packers, and the broader shortage in cultured dairy manufacturing left us exposed. Some of our co-packers didn't renew their agreements, and others simply couldn't supply the quantities we needed. The Arps acquisition was necessary to ensure continuity of supply in an already challenged supply chain, and that is exactly what it has delivered. We've been able to make our products and maintain our sales to our customers, which was our key objective for the year to stabilize supply. That said, this has come at a higher cost than we initially anticipated due to the condition of the old Arps facility's infrastructure and equipment. Once we started running the volumes we needed, we tested the limits of some of that infrastructure and equipment, and we were forced to make the repairs necessary to run our products reliably. That has taken more work and expense than we anticipated to get the facility operating at our required volume with our products. Those higher costs are what you're seeing show up in our margin and operating costs this quarter. I'd also add some more color on the plant condition itself because it explains a lot of what happened this quarter. The facility was older and the equipment and infrastructure needed more repair and attention than we had anticipated. Much of that only became apparent once we started producing our own products and once the ice cream volume began to increase. At that point, the plant could not reliably run both Barfresh products and the ice cream business at the same time without one affecting our ability to deliver the other. As a result, the ice cream business was moved, and we are able to focus the plant's capacity and our improvement efforts on Barfresh products and on building the higher volume capability we'll need for both product lines going forward. We expect to bring the ice cream business back once the rest of the production is fully stabilized, and we're consistently hitting the volumes and efficiencies we expect. While this had a real impact on both our top line and bottom line this quarter, we see it as temporary and necessary in order to stay focused on our core branded products. The good news is we've made significant improvement in production throughput at the old facility, which is allowing us to service our customers, and we expect continued improvement through the back half of the year and right up through our move into the new facility. Our team is working through equipment installation, training, and process refinements and finishing construction at the larger 44,000-square-foot facility in Defiance, Ohio, is central to that effort. We are working towards partial commissioning of the core products by the end of 2026, followed by the balance of products shortly after, and we expect it to meaningfully improve our throughput, efficiency, and profitability once it is online. It remains our top operational priority. On the new facility specifically, we continue to work through the plans for completing construction and installation. We have a $2.4 million grant we've been approved for, which we need to spend before the end of the year, and we're on track to do that. We had planned to use the proceeds from the convertible note to pay off the mortgage on the property, and we've done that. We now own the property and building free and clear. As we've always said, we still plan to obtain a new mortgage and additional equipment financing to complete the project. Costs on the project have increased more than we initially anticipated, and this remains a moving target. We may need to adjust our approach to make the economics work. That piece isn't finalized yet, and we're actively working through it. We expect margin to improve in the back half of the year as throughput increases at the old facility. And once the new facility is up and running, we expect significantly greater margin improvement, along with increased capacity for both existing and new products. Overall, we see this acquisition as a very important strategic shift for the business. It ensured we could keep supplying our customers, which we have successfully done, and it allowed us to remove the majority of our co-packers. Once construction on the new facility is complete, this will put us in control of our own production, set us up for profitability, and give us many options for profitable growth. That covers the operational side. On the commercial side, the education channel is where we are putting our energy, and it remains our greatest near-term opportunity. We kept adding to our customer base this quarter. Several of our recent school wins began serving our portfolio during the '25-'26 school year, with implementation expected across all their locations for the '26-'27 school year. We expect to announce several additional new educational channel wins in the coming weeks and months as more of this year's bids close ahead of the new school year. Our broker network continues to communicate our manufacturing progress and the supply reliability we are building. And that message continues to resonate as we go back to customers we've lost and gain new customers ahead of the new school year. With that overview, I'll now turn it over to Lisa to walk us through the numbers. Lisa Roger: Thank you, Riccardo. Let me walk you through our second quarter 2026 financial results in detail. Revenue for the second quarter of 2026 was $4.7 million compared to $1.6 million in the second quarter of 2025, representing 190% year-over-year growth. Arps Dairy contributed $3.2 million to revenue, including $2.9 million in raw and processed milk sales, with revenue in our frozen beverage and food segment consisting primarily of legacy Barfresh products increased 9%. Gross loss for the second quarter of 2026 was $150,000 or negative 3.2% of revenue, compared to gross profit of $506,000, or 31.1% of revenue in the second quarter of 2025. The decline was driven by start-up and implementation costs and lower-than-anticipated productivity at our existing processing facility as it continues to ramp towards full-scale operations. Selling, marketing and distribution expense for the second quarter of 2026 was $561,000 or 12% of revenue compared to $634,000 or 39% of revenue in the second quarter of 2025. The year-over-year improvement was driven by lower personnel costs as we increasingly leverage our broker network, reduced equipment maintenance costs resulting from a higher mix of single-serve products and the inclusion of raw and processed milk sales, which carry minimal distribution overhead. G&A expenses for the second quarter of 2026 were $794,000 compared to $673,000 in the same period last year, primarily reflecting higher personnel, recruiting and other administrative costs associated with the Arps Dairy business. Net loss for the second quarter of 2026 was $1.9 million compared to a net loss of $880,000 in the second quarter of 2025. Adjusted EBITDA for the second quarter was a loss of approximately $1.2 million compared to a loss of approximately $600,000 in the prior year period. A reconciliation of net loss to adjusted EBITDA is provided in our earnings release. Turning to our balance sheet. As of June 30, 2026, we had approximately $1.4 million of cash and accounts receivable and approximately $2.2 million of inventory on our balance sheet. In March 2026, we secured a $7.5 million senior convertible note financing. The proceeds were used to pay off the existing mortgage on our manufacturing facility in Defiance, Ohio, as well as other obligations. In addition, we were previously approved for a $2.4 million grant to purchase and install specialized equipment necessary for full-scale production operations that must be utilized in 2026. Based on our first half results and the slower-than-anticipated ramp in production efficiency at our existing facility, we are revising our full year 2026 guidance. Due to the removal of the ice cream mix production and slower growth originating from the last school year supply constraints, we expect fiscal year 2026 revenue of $23 million to $26 million, representing 62% to 83% growth compared to fiscal year 2025. We now expect fiscal year 2026 adjusted EBITDA of negative $1 million to $2 million and expect to be adjusted EBITDA negative $0.5 million to breakeven in the back half of this year. I want to give you some additional color on the change in our fiscal year 2026 adjusted EBITDA guidance. About $1.8 million relates to higher processing spend at Arps Dairy, approximately $0.8 million due to the loss of Arps Dairy ice cream mix business due to production issues caused by equipment and infrastructure constraints. Another $0.8 million relates to material cost increases, approximately $0.6 million attributable to a delayed revenue recovery for legacy Barfresh product lines and another $0.6 million related to other synergies not yet realized, primarily around inbound and storage freight and cold storage costs. We do expect revenue to improve sequentially in the third and fourth quarters of 2026 as new school district wins ramp for the 2026-'27 school year and as production efficiency at our existing facility continues to improve. Now I will turn the call back to Riccardo for closing remarks. Riccardo Delle Coste: Thank you, Lisa. Before we turn to questions, let me close with a few thoughts. First, our education channel continued to rebuild in the second quarter, and we expect a strong back half of the year as new school district wins and returning customers ramp into 2026, '27 school year. Second, our results this quarter came in below our expectations, driven by a slower-than-planned productivity ramp at our existing Arps Dairy facility. We are addressing these inefficiencies, and we have already seen improvements, and we expect continued sequential improvement as we move through the year. Third, completing construction of our 44,000 square foot facility in Defiance, Ohio remains our top operational priority. We believe this facility will represent a meaningful step change in our production economics once it is commissioned. And fourth, our confidence in the long-term opportunity in front of us once our integrated manufacturing platform is fully online is unchanged. Once the new plant is operational, we will have an exceptional platform to grow our sales in both existing products in our existing and new channels as well as new products in our existing and new channels. Right now, we remain focused on serving our core education customers reliably as we rebuild towards the growth we know this business is capable of. And with that, I'd like to open up the line for questions. Operator? Operator: Our first question comes from the line of Anthony Vendetti with Maxim Group. Anthony Vendetti: So Riccardo, just I'm trying to understand. So what exactly was the issue that caused you to have to move the ice cream production out of that facility? And then is that -- I know you said things are going to improve in the back half, but is that issue completely fixed or is in the process of being fixed? Riccardo Delle Coste: It's a bit of a mixed bag. So they're all interrelated. As we started making production at the new -- at the old facility, and we started to increase that production as we weaned off more from the co-packers, what became apparent was that the infrastructure and the equipment needed more attention than we first thought. And as a result of that, it really limited our ability to produce the equipment -- to produce, sorry, the products as needed. So moving out of the ice cream part, especially in the busiest time of the year through the summer was necessary. It's also allowed us the opportunity to focus on the smoothie products, and we've made significant improvements in being able to do that with our own products and increase the throughput. Every week continues to be getting better as the different parts of the old facility are improved or serviced or replaced. So we have made a significant improvement. What you're seeing in the Q2 results, which is on the back of obviously seasonally lower sales. And at the same time, it was early on in the building efforts of the production. So there's a lot more costs going in during that period. We've made a lot of improvements along the way, and we continue to make improvements in the efficiency and the yields that we're getting in the current production facility. So -- and we expect it to only improve as we continue through the balance of the year based on all the improvements in the infrastructure and the equipment that have already been made. So we've already -- we've done a lot of that already now. Anthony Vendetti: So when the initial due diligence of that facility, was it just not thorough enough? Or what -- so obviously, like you said... Riccardo Delle Coste: Yes, it was thorough. The challenge that we had was with our specific products, we weren't able to test it under maximum capacity, so to speak, with our actual production. So yes, the equipment was there. Yes, the equipment was investigated, but it wasn't until the load started being put on the facility in its entirety and then the ice cream business at the same time that it was -- these other gaps became more apparent. Anthony Vendetti: So in terms of the school contracts that you have signed up, the fact that you were able to move out the ice cream, I don't know how quickly you were able to do that. But were you able to fulfill all the school contracts for your Twist & Go product in the... Riccardo Delle Coste: Absolutely. Yes. Absolutely. And even more than that, we've been building inventory during the summer period and with the weekly throughput, and we've got sufficient production capacity to meet those needs. And that's really why we needed to make the investment in setting -- in improving the infrastructure and the equipment at the old facility so that we were able to do that, and that's exactly what we've done. So our ability to deliver product against our customers and our contracts for the education channel, we've got that organized and we feel very good about that, and we're already producing product to be able to do that. Anthony Vendetti: So included in your EBITDA loss guidance, is the cost associated with getting the production facility running at a clip that it will be able to eventually take and sufficiently be able to take back the ice cream production at some point. Is there any additional CapEx that you think is needed to ensure that, that happens either faster or less likely to be a manufacturing/production issue in the future? Riccardo Delle Coste: I mean there may be some smaller items, but we feel like we're at the tail end of that now with the current facility. Our focus is now moving to the new facility. Anthony Vendetti: Okay. And then just in terms of the Twist & Go product or even the Dairy, but more the Twist & Go, there has to be a certain amount of protein in there, and it comes obviously from the yogurt kind of mix that's in that Twist & Go product. But in terms of input costs to produce that product, what are you seeing in terms of inflation for those products? Have those input costs risen? Or are they somewhat stable? Riccardo Delle Coste: Yes. So they have risen. They have -- we have, again, a bit of a mixed bag. We've seen some that have risen and we've seen some that have -- we've got some savings on. But we're constantly looking at ways of mitigating any cost increases and reformulations where possible as well in kind of making the product more efficient and getting some ingredient cost savings. As Lisa kind of mentioned, we have a target per case cost, right? And the 2 components that she listed was $1.8 million in cost difference for the upbringing of the Arps facility was obviously the largest difference from our guidance and then another $800,000 on the ice cream business. So you look at those 2 numbers alone, they're obviously the 2 single biggest contributors. So as we get to our expected per case rate on the manufacturing front, which is purely a function of equipment and processing speeds and reliability, that's going to be an easy pickup once those targets are met. And similarly, with just bringing the ice cream business back, if that ends up being what we do, it's again another pretty significant contribution or explanation for that part. Lisa Roger: Right. Yes. You'd asked about the material cost. That's another $800,000, and we're looking at that from the context of the potential reformulations or other cost savings opportunities. Riccardo Delle Coste: Those 3 pillars alone are very significant and well within our control in terms of being able to improve. Anthony Vendetti: Okay. Because overall, I know the Dairy business is much lower gross margin than your Twist & Go product, correct? Riccardo Delle Coste: Correct. Yes. And that's why we're really focusing on our Barfresh products. Operator: Our next question comes from the line of William Gregozeski with Greenridge Global. William Gregozeski: Riccardo, on the -- you just mentioned that the -- I guess, school sales were -- everybody is getting the product that they're wanting. But the Barfresh sales are first half to first half a year ago are only up marginally. Why are we not seeing more demand with all the school signings? Riccardo Delle Coste: Well, 2 things. We obviously had supply constraints, right, which is the whole reason why we did the acquisition in the first place. So we knew going into this year that we had some customers that had the product and had to take us off the menus because we couldn't supply them. So this year was really all about getting manufacturing up and running, communicating to the customers. And that damage was already done last year, so to speak. But going into the new school year, we are getting new customers, and we are getting customers back, but we're not seeing that until the next school year, which is starting to happen now. So the first half of the year is still a continuation of the previous school year for many of the school districts, right? William Gregozeski: Right. But do you then have the capacity in place today to supply what the existing schools, the lost schools and the new schools for this upcoming school year? Riccardo Delle Coste: Correct. Yes. Based on what we are projecting, yes, we do. Lisa Roger: Yes. We continue to have support from... Riccardo Delle Coste: Again, that comes back to... Lisa Roger: So we continue to have support from co-manufacturers as well. So it's not 100% reliant on Arps, which is good because we've needed some time to ramp and get to efficient production capacity. William Gregozeski: Yes. Okay. So you're still using third-party manufacturing for some of that? Lisa Roger: Yes. Yes. Our 10-Q has kind of a breakdown of what we did internally and what was done with co-mans. Riccardo Delle Coste: And again, that comes back to the reason for really focusing on the Barfresh products. William Gregozeski: Yes. Yes. Okay. And then for -- I don't know if you can because it's not broken out in the guidance, but what should we be looking for the split between the 2 Barfresh and Arps lines for the second half of the year? I mean is it -- is a lot of that going to be Barfresh? Lisa Roger: Yes. Any of the growth is Barfresh because the Arps is just going to be kind of steady milk-producing components. So yes, what you see in the fluid milk segment is pretty stable throughout. We're not planning on growing that piece. William Gregozeski: Okay. And then on the -- you had mentioned about financing issues and everything. Do you think there's a chance you guys are going to have to go back to the market to raise money? Riccardo Delle Coste: We're not planning to. We own the property free and clear. So the plan is to get a mortgage on the property, which is part of the plan and other equipment financing options available is what will be -- that's our plan right now. Operator: There are no further questions. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. 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Download the Complete Report Here Key Takeaways: Strong topline growth and continued education-channel rebuilding were offset by slower-than-expected manufacturing efficiency at the existing Arps facility. BRFH reported 2Q26 revenue of $4.7 million, up 190% y/y from $1.6 million but down 16% sequentially from $5.6 million in 1Q26 and approximately 9.5% below the low end of $5.2 million guidance. Arps Dairy contributed $3.2 million, including $2.9 million from raw and processed milk, while frozen beverage and food revenue, consisting primarily of legacy Barfresh products, increased 9% y/y to approximately $1.8 million. Consolidated growth remained heavily acquisition-driven, with milk representing roughly 62% of quarterly revenue and core Barfresh recovery not yet fully reflected in reported results. Arps continues to provide supply continuity, while new district wins and returning education customers are expected to contribute more meaningfully with the 2026-27 school year. The principal 2Q pressure point was therefore production, where a slower and more costly manufacturing ramp weighed on gross margin and adjusted EBITDA recovery. Profitability remained pressured by manufacturing inefficiencies, but improving throughput and a more favorable product mix support sequential recovery in 2H26. Gross margin declined to negative 3.2% in 2Q26 from 31.1% in 2Q25 and approximately 18% in 1Q26, while adjusted EBITDA fell to a $1.2 million loss from a $600,000 loss a year ago. The pressure reflected startup costs, equipment limitations and lower than planned productivity at the existing Arps facility, with the impact extending into legacy Barfresh production. Management indicated that repairs and process improvements are improving throughput and yields, while a greater mix of higher margin education products should provide additional support as the 2026-27 school year ramps. Together, these factors support management’s expectation for adjusted EBITDA to improve to a $0.5 million loss to breakeven in 2H26. Arps has restored supply continuity for BRFH, but scaling owned production has required more investment and operational work than initially anticipated. As more Barfresh volume shifted in-house, operating the facility at the required production levels highlighted additional equipment and infrastructure needs that had not been apparent before the acquisition. BRFH therefore moved ice cream production out to prioritize its core smoothie portfolio, while repairs, equipment servicing and process refinements have since improved throughput and yields. Management indicated that a significant portion of the corrective work has already been completed and that remaining requirements at the existing facility should be relatively modest, with focus increasingly shifting to Defiance. Guidance revision quantifies the impact of the slower manufacturing ramp and makes operational efficiency an important 2H26 focus. 2026 revenue guidance was reduced to $23 to $26 million from $28 to $32 million, while adjusted EBITDA guidance was reduced to a loss of $1 million to $2 million from positive $3.2 to $3.8 million. At the respective midpoints, this represents a $5.5 million reduction in expected revenue and an approximately $5.0 million reset in adjusted EBITDA. Management attributed most of the EBITDA revision to ~$1.8 million of higher Arps processing costs, $0.8 million from the loss of the ice cream mix business and $0.8 million of higher material costs, with another $1.2 million tied to delayed legacy Barfresh revenue recovery and unrealized freight and storage synergies. Street’s 2026 revenue estimate of $22.9 million (source: TIKR) sits just below management’s $23 to $26 million guide, suggesting expectations are already relatively conservative; delivery within the range could support upward estimate revisions. Management’s breakdown of the guidance revision indicates that the downgrade is primarily tied to manufacturing efficiency, integration timing and delayed cost savings, making cost per case, throughput and gross margin recovery important operating markers through 2H26. The revised outlook still supports meaningful sequential improvement in 2H26, while education growth and manufacturing progress provide the foundation for continued growth into 2027. With 1H26 revenue of $10.3 million, management’s 2026 guidance implies $12.7 to $15.7 million of revenue in 2H26, with sequential improvement expected in both 3Q26 and 4Q26 as new school districts and returning customers ramp. Management also expects 2H26 adjusted EBITDA to improve to a loss of $0.5 million to breakeven from a $1.46 million loss in 1H26, supported by higher throughput, better cost absorption and a more favorable mix of core Barfresh products. Looking into 2027, Street estimates call for revenue of $29.2 million and adjusted EBITDA of negative $2 million (source: TIKR), implying ~28% revenue growth versus 2026 estimates and a modest improvement in adjusted EBITDA from negative $2.4 million. The revenue growth and modest EBITDA improvement reflect expectations for broader education rollouts, continued customer recovery and gradual improvement in manufacturing economics, while the lower margin Arps milk business remains relatively stable. Education channel momentum continues to build, with new district wins and customer reactivations supporting a stronger 2H26 setup. Several recently won districts began serving BRFH products during the 2025-26 school year and are expected to expand across all locations in the 2026-27 school year, while additional education wins are expected as remaining bids close. BRFH is also reengaging customers that removed products from menus following prior supply disruptions. The timing of these wins helps explain why frozen beverage and food revenue increased 9% y/y in 2Q26, as much of the first half still reflected purchasing decisions made during the prior school year. Management expects incremental 2H26 growth to be driven primarily by higher margin Barfresh products, while the Arps milk business remains relatively stable, supporting a more favorable revenue mix as school-year orders ramp. BRFH’s broker-led commercial model continues to support customer recovery while keeping costs well controlled. Selling, marketing and distribution expense declined 12% y/y to $561,000 in 2Q26 from $634,000, with sales and marketing expense down 28% to $256,000 as the company increasingly relied on brokers to communicate improved supply reliability and rebuild relationships with school districts. Single-serve products are also reducing equipment maintenance requirements in the education channel, providing operating leverage as volume scales. Storage and outbound freight expense increased to $305,000 from $276,000, reflecting the delivery requirements of processed milk, but the broader commercial cost structure remains relatively lean. This should support better operating leverage as higher margin Barfresh volume becomes a larger share of the mix, provided manufacturing efficiency continues to improve. The 44,000-square-foot Defiance facility remains the central strategic catalyst for BRFH’s transition to normalized production economics. BRFH is targeting partial commissioning of core products by year-end 2026, with remaining products expected to follow shortly thereafter. The facility is designed to provide greater throughput, improved production flexibility and more efficient unit economics than the existing plant, directly addressing the equipment reliability and processing constraints that affected 2Q26 results. The company also has a $2.4 million government grant available for qualifying equipment purchases. While the existing Arps facility has already improved supply continuity and reduced reliance on third-party manufacturers, successful commissioning of Defiance should be the more important driver of margin normalization and capacity expansion heading into 2027. The transition will also require careful production sequencing, with the existing facility lease running through September 30 and partial commissioning at Defiance targeted by year-end. Operating expense discipline provided some offset to manufacturing pressure, although higher G&A and financing costs weighed on overall profitability. Selling, marketing and distribution expense declined 12% y/y to $561,000 from $634,000 and was down from approximately $697,000 in 1Q26, reflecting greater use of the broker network and lower equipment-related costs. G&A increased 18% y/y to $794,000 from $673,000, primarily due to higher personnel, recruiting and administrative costs associated with Arps Dairy, while total operating expenses remained broadly flat y/y at $1.37 million. Net loss widened to $1.86 million from $880,000 y/y, with interest expense increasing to $344,000 from $12,000 as acquisition and facility financing became a larger part of the cost structure. Working capital is being positioned for the new school year, with inventory supporting production readiness as education volumes ramp. Inventory increased approximately 30% from year-end 2025 to $2.16 million, driven by raw materials and packaging rising to $1.17 million from $684,000, while finished goods remained broadly stable at approximately $1.0 million. This mix suggests the build is primarily supporting higher production rather than reflecting an accumulation of unsold finished product. Management also indicated that inventory has continued to build through the summer and that current internal capacity, supplemented by co-manufacturers, is sufficient to support existing, returning and newly won school business. Given the supply interruptions experienced last year, maintaining this production buffer should help BRFH convert improving education demand into more consistent revenue. Liquidity remains supported by receivables financing and planned funding sources as the manufacturing build progresses. BRFH ended June with $324,000 of cash and $1.09 million of trade receivables, while operating cash use increased to $3.05 million in 1H26 from $1.58 million a year ago as the company absorbed integration costs, built inventory and reduced trade payables. Receivables facilities provide an additional liquidity buffer, with approximately $3.58 million of borrowing availability at quarter end, subject to eligible collateral. Converting the back-to-school inventory build into sales and receivables, while securing planned financing for Defiance, remains an important balance-sheet consideration through the remainder of 2026. The March convertible financing provides BRFH with funding flexibility, although interest cost and potential dilution remain considerations. BRFH raised $7.5 million through senior convertible notes and used a portion of the proceeds to repay the existing mortgage, leaving the Defiance property unencumbered and available to support planned property-backed financing. The notes carry a 10% coupon during the first 12 months and are convertible at $2.90 per share, while investors also received approximately 2.35 million warrants exercisable at $3.20. Interest expense increased to $344,000 in 2Q26 from $12,000 a year ago, reflecting the higher financing burden. Management does not currently plan an equity raise and continues to prioritize mortgage and equipment financing; successful execution of that plan would help limit incremental dilution as BRFH completes the Defiance build. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. Stock has reacted negatively to the latest earnings print, but our analysis suggests BRFH’s current valuation increasingly discounts the near-term operating pressure reflected in the guidance reset, while the medium to long-term opportunity from education growth and vertical integration remains intact. At $1.30 per share and an approximately $21 million market capitalization, BRFH trades at 0.93x 2026E P/Sales. The selloff reflects the slower manufacturing ramp and reduced 2026 outlook, while the longer-term education opportunity and strategic rationale for vertical integration remain intact. Importantly, the Street estimate sits slightly below the low end of management’s $23 to $26 million 2026 revenue guidance, suggesting current expectations are already relatively conservative. Delivery within the guidance range, particularly toward the upper end, could support upward estimate revisions and strengthen confidence in the medium to long-term growth and margin recovery trajectory. A return toward BRFH’s historical valuation range highlights meaningful rerating potential as execution improves. The stock has de-rated and currently trades well below its three-year peak of 4.5x NTM P/Sales. Applying a 3.0x P/Sales multiple, approximately one-third below the historical peak, to the $22.9 million 2026E Street revenue implies an illustrative market capitalization of approximately $68 million, or roughly $4.2 per share, while 2027E Street revenue of $29.2 million provides additional forward growth support. However, the path to rerating remains contingent on execution across key operating milestones, including education revenue growth through the 2026-27 school year, gross margin recovery, improved efficiency at the Arps facility, progress toward the 2H26 adjusted EBITDA target, and successful commissioning of the Defiance facility. Relative valuation has also become compelling, with BRFH trading at a greater than 40% discount to peers. BRFH’s 0.93x 2026E P/Sales multiple compares with a peer average of 1.58x, representing an approximately 41% discount. Applying the peer average to the $22.9 million 2026E Street revenue estimate sourced from TIKR implies an illustrative equity value of approximately $36 million, or roughly $2.2 per share. This framework assumes only convergence toward the peer average, with further rerating potential if BRFH delivers within management’s revenue guidance, demonstrates sequential margin improvement, and executes on the Defiance transition, supporting the medium to long-term growth and margin recovery thesis. Read Exec Edge’s Initiation on Barfresh Food Group Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Barfresh Reports Topline Growth & Continued Education Recovery – Quarterly Update Report appeared first on ExecEdge.

This article first appeared on GuruFocus. Revenue: $4.7 million in Q2 2026, up 190% year-over-year from $1.6 million. Segment Revenue (Arps Dairy): Contributed $3.2 million, including $2.9 million in raw and processed milk sales. Segment Revenue (Frozen Beverage & Food): Increased 9%, driven largely by contributions from Arps Dairy. Gross Margin: Gross loss of $150,000, or negative 3.2% of revenue, compared to a gross profit of $506,000 (31.1% of revenue) in Q2 2025. Selling, Marketing & Distribution Expense: $561,000, or 12% of revenue, down from $634,000 (39% of revenue) in Q2 2025. G&A Expense: $794,000, up from $673,000 in Q2 2025. Net Loss: $1.9 million, compared to a net loss of $880,000 in Q2 2025. Adjusted EBITDA: Loss of approximately $1.2 million, compared to a loss of approximately $600,000 in the prior year period. Cash & Accounts Receivable: Approximately $1.4 million as of June 30, 2026. Inventory: Approximately $2.2 million on the balance sheet. FY 2026 Revenue Guidance: Revised to $23 million to $26 million, representing 62% to 83% growth compared to fiscal year 2025. FY 2026 Adjusted EBITDA Guidance: Revised to a loss of $1 million to $2 million, with an expectation of negative $0.5 million to break even in the back half of the year. Warning! GuruFocus has detected 7 Warning Signs with BRFH. Is BRFH fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 190% year-over-year to $4.7 million in Q2 2026, driven by the Arps Dairy acquisition. The Arps Dairy acquisition successfully ensured supply continuity, allowing Barfresh Food Group Inc (NASDAQ:BRFH) to maintain sales to customers and reduce reliance on co-packers. The education channel continues to rebuild, with new school district wins and returning customers expected to ramp up for the 2026-2027 school year. The company has made significant improvements in production throughput at the existing facility and expects continued improvement through the back half of the year. Barfresh Food Group Inc (NASDAQ:BRFH) now owns its Defiance, Ohio property and building free and clear after using convertible note proceeds to pay off the mortgage. Gross margin turned negative at -3.2% of revenue in Q2 2026, down from +31.1% in the prior year, due to startup costs and lower-than-anticipated productivity. The ramp at the existing Arps Dairy facility took longer than modeled, leading to higher costs and a downward revision of full-year 2026 adjusted EBITDA guidance to a loss of $1 million to $2 million. The company had to move the ice cream business out of the facility due to equipment and infrastructure constraints, resulting in a loss of approximately $0.8 million in revenue. Costs for the new Defiance, Ohio facility have increased more than initially anticipated, and the company may need to adjust its approach to make the economics work. Legacy Barfresh product revenue only increased 9% in the quarter, with growth hampered by supply constraints from the previous school year and a delayed revenue recovery. Q: What exactly was the issue that caused you to have to move the ice cream production out of the facility, and is that issue completely fixed or is it in the process of being fixed?A: Riccardo Coste (CEO): As we increased production at the old facility and weaned off co-packers, it became apparent that the infrastructure and equipment needed more attention than first thought, limiting our ability to produce products as needed. Moving out the ice cream business, especially during the busy summer period, was necessary to focus on smoothie products. We have made significant improvements in throughput, and it continues to get better each week as different parts of the old facility are improved, serviced, or replaced. We expect continued improvement through the balance of the year. Q: Was the initial due diligence on that facility not thorough enough?A: Riccardo Coste (CEO): The due diligence was thorough, but the challenge was that we weren't able to test our specific product under maximum capacity with our actual production. The equipment was investigated, but it wasn't until the full load was put on the facility, along with the ice cream business simultaneously, that these other gaps became more apparent. Q: Were you able to fulfill all the school contracts for your Twist and Go product despite moving out the ice cream production?A: Riccardo Coste (CEO): Absolutely. We've been building inventory during the summer period with weekly throughput and have sufficient production capacity to meet those needs. That's exactly why we needed to make the investment in improving the infrastructure and equipment at the old facility. Our ability to deliver products against our contracts for the education channel is organized, and we feel very good about that. Q: Is there any additional CapEx needed to ensure the production facility can eventually take back the ice cream production?A: Riccardo Coste (CEO): There may be some smaller items, but we feel like we're at the tail end of that now with the current facility. Our focus is now moving to the new facility. Q: In terms of input costs to produce the Twist and Go product, what are you seeing in terms of inflation? Have those input costs risen or are they somewhat stable?A: Riccardo Coste (CEO): They have risen. It's a bit of a mixed bagwe've seen some that have risen and some where we've got savings. We're constantly looking at ways to mitigate cost increases, including reformulations where possible to make the product more efficient and get ingredient cost savings. Q: The Barfresh sales are first half to first half a year ago only up marginally. Why are we not seeing more demand with all the school signings?A: Riccardo Coste (CEO): We had supply constraints, which is the whole reason we did the acquisition. We knew going into this year that some customers had to take us off menus because we couldn't supply them. This year was about getting manufacturing up and running and communicating to customers. Going into the new school year, we are getting new customers and getting customers back, but we're not seeing that until the next school year, which is starting to happen now. The first half of the year is still a continuation of the previous school year for many school districts. Q: Do you have the capacity in place today to supply what the existing schools, the lost schools, and the new schools need for this upcoming school year?A: Riccardo Coste (CEO): Yes, based on what we're projecting, we do. Lisa Roger (CFO): We continue to have different co-manufacturers as well, so it's not 100% reliant on ARPS, which is good because we've needed time to ramp and get to efficient production capacity. Q: What should we be looking for in the split between the two segments (Barfresh and ARPS) for the second half of the year?A: Lisa Roger (CFO): Any of the growth is Barfresh because ARPS is just going to be kind of steady milk producing components. What you see in the fluid milk segment is pretty stable throughout. We're not planning on growing that piece. Q: Do you think there's a chance you guys are going to have to go back to the market to raise money?A: Riccardo Coste (CEO): We're not planning to. We own the property free and clear. The plan is to get a mortgage on the property, which is part of the plan, along with other equipment financing options available. That's our plan right now. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. The company is undergoing a fundamental transformation from a co-manufacturer dependent model to controlling its own production to mitigate cultured dairy supply chain shortages. Performance fell short of expectations due to a slower-than-planned productivity ramp at the acquired Arps Dairy facility, which faced infrastructure and equipment limitations. Management strategically exited the ice cream mix business temporarily to prioritize capacity and improvement efforts for core Barfresh branded products. Higher operational costs were driven by necessary repairs and maintenance to stabilize the aging Arps facility's infrastructure under increased production loads. Revenue growth of 190% was primarily driven by the Arps Dairy acquisition, which provided the necessary scale to re-engage customers lost during previous supply interruptions. The education channel remains the primary strategic focus, with management working to earn back customer trust ahead of the 2026-2027 school year implementation. Strategic positioning involves utilizing the Arps facility as a bridge to the new 44,000-square-foot Defiance, Ohio plant, which is expected to normalize production economics. Revised full-year 2026 revenue guidance of $23 million to $26 million reflects a more conservative view of production ramps and the removal of ice cream mix revenue. Management expects to reach adjusted EBITDA breakeven to negative $0.5 million in the second half of 2026 as throughput efficiencies improve, though they have revised the full-year 2026 adjusted EBITDA guidance to a loss of $1 million to $2 million. Partial commissioning of core products at the new Defiance facility is targeted for the end of 2026, which is expected to drive a meaningful step-change in margins. The company plans to utilize a $2.4 million equipment grant before the end of 2026 and seek new mortgage and equipment financing to complete the Defiance project. Future margin expansion is dependent on three pillars: reaching target per-case manufacturing rates, potential product reformulations, and the eventual return of the ice cream business. The Arps facility required $1.8 million in higher-than-planned processing spend to address equipment reliability and infrastructure gaps. Construction costs for the new Defiance facility have increased beyond initial estimates, requiring management to potentially adjust their economic approach. The company successfully paid off the existing mortgage on the Defiance property using convertible note proceeds and now owns the asset free and clear. A $0.8 million headwind was identified due to material cost increases, which management aims to mitigate through ingredient cost savings and reformulations. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that the aging infrastructure could not handle the combined load of Barfresh products and ice cream during peak summer demand. Moving the ice cream business allowed the team to focus exclusively on improving throughput and yields for core smoothie products. The company intends to bring the ice cream business back once production is fully stabilized and efficiencies are met. Management confirmed they have sufficient capacity to fulfill all school contracts for the Twist & Go product line. Reliability is being maintained through a combination of improved internal production and continued support from select third-party co-manufacturers. Inventory has been built up during the summer to ensure implementation across new and returning school districts. Management stated they are not currently planning to return to the market for a capital raise. The strategy focuses on leveraging the now debt-free Defiance property to obtain a new mortgage and traditional equipment financing.

Second Quarter Revenue Increased 190% Year-Over-Year to $4.7 million, Driven by Contribution from Arps Dairy Acquisition Company Expects to Achieve Adjusted EBITDA Breakeven in Second Half of 2026 Company Revises Full Year 2026 Guidance to Reflect Slower-than-Anticipated Ramp in Production Efficiency at Existing Facility; Remains Focused on Completing Construction of New Defiance, Ohio Facility LOS ANGELES, Aug. 14, 2026 (GLOBE NEWSWIRE) -- Barfresh Food Group Inc. (the “Company” or “Barfresh”) (Nasdaq: BRFH), a provider of frozen, ready-to-blend and ready-to-drink beverages, today reported financial results for the second quarter June 30, 2026. Management Comments Riccardo Delle Coste, the Company’s Chief Executive Officer, stated, “Our education channel continued to rebuild in the second quarter, as former customers returned and we added new school district wins across the country. That said, while our revenue increased driven by the Arps Dairy acquisition our overall results came in below our expectations for the quarter. Productivity at our existing Arps Dairy facility ramped more slowly than we had planned, driven by the condition of the current facilities infrastructure and equipment that needed more investment than planned to bring it into a more operable condition for the volume of product we needed. The resulting startup and inefficiency costs weighed on gross margin and Adjusted EBITDA more than we anticipated when we issued guidance in May.” “We are addressing these inefficiencies directly and completing construction of our new 44,000-square-foot facility in Defiance, Ohio remains a top operational priority, as we believe it will meaningfully improve our production economics once commissioned. Given where we stand at the midpoint of the year, we are revising our full year 2026 guidance to reflect a more conservative view of the timeline to normalized production. We expect to achieve Adjusted EBITDA of negative $0.5 million to breakeven in the second half of 2026 as production efficiencies improve and new school district wins ramp for the 2026-27 school year. Our confidence in the underlying opportunity, once our integrated manufacturing platform is fully online, is unchanged.” Second Quarter of 2026 Financial Results Revenue for the second quarter of 2026 increased 190% year-over-year to $4.7 million, compared to $1.6 million in the second quarter of 2025 driven by the Arps Dairy Acquisition. Gross loss was $150,000, or -3.2% of revenue, in the second quarter of 2026, compared to gross profit of $506,000, or 31.1% of revenue, in the second quarter of 2025. The decline was driven by startup and implementation costs and lower-than-anticipated productivity at the Company's existing processing facility as it continues to ramp toward full-scale operations. Selling, marketing and distribution for the second quarter of 2026 was $561,000 or 12% of revenue, compared to $634,000 or 39% of revenue in the second quarter of 2025. The year-over-year decrease reflects lower personnel costs as the Company increasingly leverages its broker network, lower equipment maintenance costs as single serve products, which require no customer equipment, represent a greater share of the portfolio mix, and the inclusion of raw and processed milk sales, which carry minimal distribution overhead. G&A expenses for the second quarter of 2026 were $794,000, compared to $673,000 in the second quarter of 2025, primarily reflecting higher personnel, recruiting and other administrative costs associated with the Arps Dairy business. Net loss for the second quarter of 2026 was $1.9 million as compared to a loss of $880,000 in the second quarter of 2025. Adjusted EBITDA was a loss of $1.2M for the second quarter of 2026, compared to a loss of $600,000 in the second quarter of 2025. A reconciliation of net loss to Adjusted EBITDA is provided below. Non-GAAP Financial Measures The above information is presented in conformity with accounting principles generally accepted in the United States. In order to aid in the understanding of the Company’s business performance, the Company has also presented below certain non-GAAP measures, including EBITDA and Adjusted EBITDA, which are reconciled in the table below to comparable GAAP measures. Management believes that Adjusted EBITDA provides useful information to the investor because it is directly reflective of the performance of the Company. The exclusion of certain items including stock compensation and other non-recurring costs such as business acquisition expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of the Company’s core business performance. Adjusted EBITDA is not recognized measurements under GAAP and should not be considered as an alternative to loss from operations, net loss or any other performance measure derived in accordance with GAAP. (1)  Arps Dairy was acquired on October 3, 2025. The Company incurred acquisition and integration expenses during 2026 in association with the transaction. Balance Sheet As of June 30, 2026, the Company had approximately $1.4 million of cash and accounts receivable, and approximately $2.2 million of inventory on its balance sheet. In March 2026, the Company secured a $7.5 million senior convertible note financing. The proceeds were used to pay off the existing mortgage on the Company's manufacturing facility in Defiance, Ohio, as well as other obligations positioning Barfresh to control its manufacturing destiny with significantly expanded production capacity. In addition, the Company was recently approved for a $2.4 million government grant to purchase and install specialized equipment necessary for full-scale production operations. Outlook for Full Year 2026 Based on first half results and the slower-than-anticipated ramp of production efficiency at the Company’s existing facility, the Company is revising its full year 2026 guidance. The Company now expects fiscal year 2026 revenue of $23 million to $26 million, representing 62% to 83% growth compared to fiscal year 2025. The Company now expects fiscal year 2026 Adjusted EBITDA of negative $1.0 to 2.0 million. The Company expects revenue to improve sequentially in the third and fourth quarters of 2026 as new school district wins ramp for the 2026-27 school year and as production efficiency at the existing facility continues to improve. Conference Call The conference call to discuss these results is scheduled for today, on Friday, August 14, 2026 at 1:30 pm Pacific Time (4:30 pm Eastern Time). Listeners can dial (877) 407-4018 in North America, and international listeners can dial (201) 689-8471. A telephonic playback will be available approximately two hours after the call concludes and will be available through Friday, August 28, 2026. Listeners in North America can dial (844) 512-2921, and international listeners can dial (412) 317-6671. Passcode is 13761350. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto the Company’s website at www.barfresh.com in the Investors-Presentations section. About Barfresh Food Group Barfresh Food Group Inc. (Nasdaq: BRFH) is a developer, manufacturer and distributor of ready-to-blend and ready-to-drink beverages, including smoothies, shakes and frappes, primarily for the education market, foodservice industry and restaurant chains, delivered as fully prepared individual portions or single serving and bulk formats for on-site preparation. For more information, please visit www.barfresh.com. Forward Looking Statements Except for historical information herein, matters set forth in this press release are forward-looking, including statements about the Company’s commercial progress, success of its strategic relationship(s), and projections of future financial performance. These forward-looking statements are identified by the use of words such as “grow”, “expand”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast” and “project”, “continue,” “could,” “may,” “predict,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the Company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this release should be considered in conjunction with the Company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein. Furthermore, the Company expressly disclaims any current intention to update publicly any forward-looking statements after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Investor RelationsJohn [email protected] Deirdre [email protected]

Keurig Dr Pepper, Inc (KDP) came out with quarterly earnings of $0.57 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.64%. A quarter ago, it was expected that this company would post earnings of $0.37 per share when it actually produced earnings of $0.39, delivering a surprise of +5.41%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Keurig Dr Pepper, which belongs to the Zacks Beverages - Soft drinks industry, posted revenues of $7.31 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.88%. This compares to year-ago revenues of $4.16 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Keurig Dr Pepper shares have added about 9.8% since the beginning of the year versus the S&P 500's gain of 12.8%. While Keurig Dr Pepper has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Keurig Dr Pepper was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.65 on $7.39 billion in revenues for the coming quarter and $2.29 on $26.19 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Beverages - Soft drinks is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Barfresh Food Group Inc. (BRFH), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 14. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +16.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Barfresh Food Group Inc.'s revenues are expected to be $5.36 million, up 228.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Keurig Dr Pepper, Inc (KDP) : Free Stock Analysis Report Barfresh Food Group Inc. (BRFH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, May 14, 2026 at 4:30 p.m. ET Chief Executive Officer — Riccardo Delle Coste Chief Financial Officer — Lisa Roger Riccardo Delle Coste; and Barfresh Food Group's CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions. The discussion today will include forward-looking statements. Except for historical information herein, matters set forth on this call are forward-looking within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company's commercial progress, success of its strategic relationships and projections of future financial performance. These forward-looking statements are identified by the use of words such as grow, expand, anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential, forecast and project, continue, could, may, predict and will and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements other than the statements of historical fact that address activities, events or developments that the company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors that the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond control of the company. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those indicated by such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of date they are made. The contents of this call should be considered in conjunction with the company's recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K and the quarterly reports on Form 10-Q and current reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein. Furthermore, the company expressly disclaims any current intention to update publicly any forward-looking statements after this call, whether as a result of new information, future events, changes in assumptions or otherwise. In order to aid in understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted gross profit, EBITDA, adjusted EBITDA, which are reconciled in the tables and business update release to the most comparable GAAP measures and certain calculations based on its results, including gross margin and adjusted gross margin. The reconciling items are nonoperational or noncash costs, including stock compensation and other nonrecurring costs, such as those associated with the product withdrawal, the related dispute, certain manufacturing relocation costs and acquisition-related expenses. Management believes that the adjusted gross profit, EBITDA and adjusted EBITDA provide useful information to the investors, because they are directly reflective of the performance of the company. Now with that, I will turn the call over to the CEO of Barfresh Food Group, Mr. Riccardo Delle Coste. Please, sir, go ahead. Riccardo Delle Coste: Good afternoon, everyone, and thank you for joining us for our fourth quarter and full year 2025 earnings call. I'm very excited to report that 2025 has been a transformational year for Barfresh. One that has fundamentally repositioned our company for sustainable growth and profitability. The fourth quarter capped off an exciting year, in which we achieved record revenue of $14.2 million, completed a strategic acquisition that gives us control of our own manufacturing capabilities and secured financing that positions us to unlock over $200 million in revenue capacity. Before I discuss our quarterly and full year results, let me provide context on the strategic milestones that have reshaped our business model. In early October, we completed the acquisition of Arps Dairy, which has fundamentally changed how we operate. This acquisition brought us an operational 15,000 square foot processing facility where we immediately commenced production, along with a 44,000 square foot state-of-the-art manufacturing facility in Defiance, Ohio. We're already realizing immediate benefits from enhanced supply chain control and operational efficiency with approximately 90% of our revenue mix now manufactured in-house, giving us the ability to deliver orders that we previously would not have been able to deliver without the acquisition. After years of being constrained by third-party manufacturers, which created operational challenges, revenue limitations and increased operating costs, we now have control over the majority of our production. Our updated time line for the remaining construction and equipment installation at our larger facility is extended to the fourth quarter of 2026 due to the timing of financing. In March of 2026, we secured a $7.5 million senior convertible note financing that delivers transformative benefits. These proceeds enable us to pay off the existing mortgage on the larger Defiance facility, meaning we now own our manufacturing plant, free and clear. The financing also accelerates construction completion, enabling us to move into the enhanced facility before the end of 2026. Additionally, as previously announced, we would approve for a $2.4 million government grant to install specialized equipment necessary for full-scale production operations. For the fourth quarter of 2025, we achieved record revenue of $5.4 million, representing a 94% year-over-year revenue growth. For the full year of 2025, we achieved record revenue of $14.2 million, representing a 33% year-over-year growth. The fourth quarter and full year revenue growth was driven by the inclusion of the newly acquired Arps Dairy. Growth in our base business for 2025 was limited by the supply constraints of our co-manufacturing model underscoring the strategic necessity of acquiring Arps Dairy. With the limited manufacturing supply we have been focused on maintaining results and working on recovering lost customers, but now as we move into 2026 with enhanced capacity coming online, we are also focused on acquiring new ones. We've seen strong uptake across our existing Twist & Go portfolio and our Pop & Go 100% juice freeze pops have gained meaningful traction with several large school districts. I'm particularly excited to highlight a significant win we announced recently that demonstrates our continued momentum and competitive strength in the education channel. We successfully secured a 7-year bid award, with the largest school district in Nevada, representing the fifth-largest school district in the entire United States. This district serves over 300,000 students across the region, making it one of the most substantial wins in the K-12 channel. This win is especially meaningful for several reasons. First, it validates our ability to compete successfully for and secure placements, with the largest school districts in the country. And second, with our enhanced manufacturing capabilities through the Arps Dairy acquisition and our expanded product lineup, we are well positioned to support this district's needs reliably and consistently. This represents a major milestone in our expansion within the K-12 education channel and strengthens our position as we continue pursuing similar large-scale opportunities nationwide. Despite wins like this fifth largest district in the nation, we remain at only approximately 5% market penetration in the education channel overall, which represents substantial runway for growth. And we have tremendous growth opportunities within the districts we currently serve. A key priority throughout the fourth quarter and into fiscal 2026 has been protecting our base business and rebuilding relationships with customers who are impacted by the supply constraints we experienced earlier in the year. We successfully brought back customers who had temporarily removed our products due to our earlier supply shortfalls with many reintroductions occurring in the fourth quarter. Our approach has been straightforward and relationship-focused. We've stayed in close contact with these school districts through our broader broker network and our own sales team, communicating transparently about our manufacturing progress and our transition to owned facilities. Because these customers are already familiar with our products and have seen the positive response from students, the reintroduction process is more streamlined. This focused effort to win back displaced customers while simultaneously pursuing new district opportunities, positions us well for sustained growth as we're both recovering lost ground and expanding our market presence. The manufacturing capacity issues that constrained our first half performance were mostly resolved by year-end with the acquisition of Arps Dairy's processing plant and the contribution from our smoothie bottle co-manufacturing partners, which provided additional production capacity, giving both existing and prospective customers confidence in our ability to deliver reliably. The combination of record fiscal 2025 revenue, successful school district penetration, including major wins like the fifth largest school district in the nation, and our expanding manufacturing capabilities positions us well as we execute on our fiscal 2026 plan. We've built significant operational momentum, and with our owned facility, providing enhanced control and capacity, we're ready to capitalize on the substantial market opportunities ahead. With that overview of our strategic progress and market momentum I'll now turn it over to Lisa to walk through the detailed financial results for the fourth quarter and full year. Lisa Roger: Thank you, Riccardo. Let me walk you through our fourth quarter and full year financial results in detail. Revenue for the fourth quarter of 2025 increased to $5.4 million, representing our highest quarterly revenue in company history. Revenue for the full year of 2025 was a record $14.2 million compared to $10.7 million in the same period of 2024. This growth was driven by our Arps Dairy acquisition, which contributed $2.9 million. Gross margin in the fourth quarter of 2025 was 3% compared to 26% for the fourth quarter of 2024. Adjusted gross margin for the fourth quarter of 2025 was 4%, compared to 30% in the prior year period. Adjusted gross margin for the full year of 2025 was 22% compared to 37% for the full year of 2024. The decrease in gross margin resulted from transitioning Barfresh production to the company's new facility to capture long-term operational efficiencies and scale benefits, which involves typical startup and implementation costs that temporarily impacted margins. Additionally, we continued Arps Dairy's existing milk processing business, which operates at different margin profiles than our core business and can experience commodity pricing fluctuations that may impact revenue, but provide stable milk supply and support production and diversification. These are strategic investments in our long-term growth and opportunities. We expect incremental margin recovery to occur throughout the year and accelerating in the second half of 2026 when the equipment enhancements are completed and the new facility is commissioned. Net loss for the fourth quarter of 2025 improved to $763,000 compared to a net loss of $852,000 in the fourth quarter of 2024. Net loss for the full year of 2025 was $2.7 million compared to a net loss of $2.8 million in the prior year period. Selling, marketing and distribution expenses were $783,000 compared to $872,000 in the fourth quarter of 2024. Selling, marketing and distribution expenses for the full year of 2025 were $3.2 million compared to $3.1 million in the same period of 2024. G&A expenses for the fourth quarter of 2025 were $922,000 compared to $607,000 in the same period last year. G&A expenses for the full year of 2025 were $3.2 million compared to $3 million in the same period of 2024. Adjusted EBITDA for the fourth quarter was a loss of approximately $1.1 million compared to a loss of approximately $563,000 in the prior year period. For the full year of 2025, our adjusted EBITDA was a loss of approximately $2.1 million compared to a loss of $1.3 million in the same period of 2024. We expect to achieve positive adjusted EBITDA in fiscal year 2026 as we realize the full benefits of our integrated manufacturing model and complete our facility optimization. Turning to our balance sheet. As of December 31, 2025, we had approximately $2.3 million of cash and accounts receivable and approximately $1.7 million of inventory on our balance sheet. In March 2026, we secured a subscriptions for a $7.5 million senior convertible note financing. The proceeds were used to pay off the existing mortgage on our manufacturing facility in Defiance, Ohio, as well as other obligations and will accelerate construction completion, which will position the company to control its manufacturing destiny with significantly expanded production capacity. In addition, as previously announced, we were recently approved for a $2.4 million government grant to purchase and install specialized equipment necessary for full-scale production operations. The financing structure gives us significant financial flexibility. The ability to pay in either cash or registered stock preserves cash for operational needs during the construction phase and owning the facility free and clear, positions us to access additional capital through mortgage and equipment financing as may be required for any remaining investments. Now I will turn the call back to Riccardo for closing remarks. Riccardo Delle Coste: Thank you, Lisa. As I reflect on 2025, this year represents an inflection point for Barfresh. We delivered record revenue of $14.2 million and fundamentally repositioned this company for unprecedented growth. The strategic decision we made this year acquiring Arps Dairy and securing the financing to facilitate the completion of construction on our new state-of-the-art facility mean we are no longer constrained by third-party manufacturers or limited production capabilities. We now control our own destiny. Looking ahead, we have multiple powerful drivers of growth working in our favor. First, our own manufacturing capabilities through Arps Dairy give us direct control over production, enhanced operational efficiency and the flexibility to innovate and scale new products more rapidly. Second, once our facility expansion is complete, we will have capacity to support over $200 million in annual revenues, a significant leap in our production capabilities. The new equipment and optimized facility layout will create greater operational efficiencies, increase profit margins and provide the scalability to support aggressive growth plans. Third, we're still in the early innings of penetrating our core education channel with massive runway ahead of us. Our recent school district wins demonstrate that we're gaining traction and rebuilding momentum. Fourth, Beyond our core product lines, the expanded facility opens significant opportunities for manufacturing, both for new products owned by Barfresh and co-manufacturing for third parties, creating additional revenue streams that leverage our state-of-the-art capabilities. Now turning to our fiscal 2026 outlook. As we advance our initiatives for the year, we are making thoughtful progress on the integration and optimization of our 44,000 square foot facility. While the implementation is taking slightly longer than initially anticipated, the new equipment and optimized facility layout will create greater operational efficiencies, increase profit margins and provide the scalability to support our growth plans once fully operational. Given our updated facility and equipment time line, we are adjusting our fiscal 2026 revenue guidance to a range of $28 million to $32 million, and our adjusted EBITDA guidance to a range of $3.2 million to $3.8 million. While this represents a more conservative ramp-up schedule than our initial projections, it still reflects substantial year-over-year growth of 97% to 125% on revenue from both the full year inclusion of Arps Dairy's revenue and growth of legacy Barfresh products. We remain confident in the transformational nature of the platform we are building and believe fiscal 2026 will represent a pivotal year that demonstrates the power and scalability of our integrated model. For the first quarter of fiscal 2026, we expect revenue in the range of $5 million to $5.2 million and to be adjusted EBITDA breakeven, which is also impacted by our updated equipment time line. As we progress through the year and complete our facility enhancements, we expect year-over-year quarterly improvement in both revenue and profitability. We are building a scalable, profitable business model that positions us to capitalize on significant market opportunities while delivering sustainable long-term value creation for our shareholders. The integrated manufacturing model we're building will enable us to pursue opportunities with improved economics and operational control that simply weren't possible before. The operational momentum we demonstrated in 2025, combined with owning our own manufacturing facility and dramatically expanding our capacity positions Barfresh for what we expect to be exceptional growth beyond fiscal year 2026. We look forward to updating you on our progress as we move through 2026 and demonstrate the full potential of what we've built. And with that, I would like to open up the line for questions. Operator? Operator: [Operator Instructions] And our first question comes from the line of Thomas McGovern with Maxim Group. Thomas McGovern: First one, just as we're gaining additional clarity on the supply chain ramp here and the initiatives that are underway to kind of stabilize everything after some of the shakiness we've seen in the past. I'm just curious how the conversations have gone with -- in terms of reengaging the school districts that you might have lost due to some supply chain disruptions in the past. Just maybe unpack that for me. And then my second question relates specifically to your guidance, right? If we look at that, we're clearly expecting some growth in the back half of the year. Maybe walk me through what you're expecting in terms of timing? And then kind of what some of the underlying assumptions for that full year guidance is, is that based on essentially just your base business, including conversations that have kind of come to fruition? Or does that assume that certain relationships or contracts that are up in the air will be signed as we're entering maybe the new school year for '26, '27? Riccardo Delle Coste: Yes, sure. Thomas, so the customers that we're talking with and have been constantly engaged with love the product. we're really just now focused on keeping that communication up. We're reaching out to customers that have taken off the product due to no supply. We're going through the bidding process again. A lot of the customers are just waiting for us to have product come back into distribution in certain markets or their bid to come back around with their distribution partners. The fortunate part is that we're in the bidding cycle again now. So we're having added again to customers, and we're getting new ones as well. So we're in a very fortunate position that we've got some great customers that love our product, and they want to keep using it and the kids love the product. And as we're now getting product back out into the market in different parts of the country, we're just staying in close contact with them and working towards whatever obstacles they may have from a timing perspective in their own establishments. Does that make sense? Thomas McGovern: Yes, absolutely. And then just kind of maybe walk me through some of the underlying assumptions for the revenue -- the implied revenue growth in the back half or quarters 2 through 4? Riccardo Delle Coste: Yes. So the implied revenue obviously includes both the Barfresh business and the Arps business going forward. We would typically have a more severe drop off with Barfresh products in the second quarter, for example. With the Arps business, we actually have the addition of the ice cream mix, which is quiet in the winter months. So it's actually quite counter seasonal to the rest of our business. And then in the -- so in the second quarter, we'll have a higher than expected for our products revenue. And then in Q3, you'll have the addition of still of the ice cream mix-type products together with the Barfresh products as well, which is our biggest -- typically our biggest quarter. So the growth is coming by the combination of the 2 businesses, based on the base business that we have as well as some foresight with some of the new accounts and bids that we're winning. Thomas McGovern: Understood. And then just one more question for me. I mean, especially as you guys are kind of diversifying your seasonality, if you will, or with your product portfolio, you should expect some counterweight there, which is great. Just also curious, I know it's not as large of a component of revenue now, but as we look at channels outside of education, in the past, we've talked about foodservice and military as potential growth channels for you guys. Is there any updates on that front? And can you talk maybe a little bit about strategy and how innovation or new product launches might play a role in expanding your presence in those channels? Riccardo Delle Coste: Yes. I mean there are so many opportunities in terms of different channels for us to focus on. I mean, we've got a huge market that we're only in a 4% to 5% market penetration of in the education channel. And we haven't even been able to keep up with supply up until now in that channel alone. So we do feel that there's an enormous amount of opportunities in other channels, whether it's food service, whether it's even retail, petrol and convenience, we just haven't had the supply to get there. So we have been in this -- protect our base business mode for the last couple of years. Now that we have the manufacturing capacity, and we're in control of that we're now going to be getting back into aggressive sales mode. And that aggressive sales mode is going to be exploring the various channels out there and how we can best exploit these opportunities. Operator: [Operator Instructions] And our next question comes from [indiscernible]. Unknown Analyst: Congratulations, Riccardo and Lisa, on the record Q4 and this acquisition. I think, it has definitely changed the story where last year, the company was supply constrained. But I think at this juncture, the company -- the business just controls its own destiny. So it's really a great move. I have 2 questions. One is in terms of the production capacity, I think it was mentioned on the press release that with this new enhancements to the facility done, where it will -- basically, you'll have a capacity to support about $200 million in revenue at some point. Can you share on what's the production capacity that you have at the moment? And how does it scale? When do you get to that point? That's number one. And then number 2 is in terms of the guidance, 28% to 32%, very strong guidance. And as you mentioned, that includes the base business and the Arps business. From the base business side, does the guidance include the business that you already have signed up? And is there an upside to as you go in the school season and sign more school districts? Riccardo Delle Coste: Yes. So let me start with the first question on the capacity, and we'll circle back to the second one. The existing facility is an older facility. We're operating in there, and we're able to service to get what we need, and that will see us through up until we get to the new facility. It's not ideal, but it's working, and we're able to get product out that had we not done the acquisition, we would not have been able to supply customers. That's how important this acquisition actually was for us. When we get into the new facility, which will be later this year, the infrastructure will all be there. The base infrastructure for the processing will also be there. So it's really going to be a matter of as we ramp up and want to do more things, whether it's more products, we'll have additional capacity on our existing lines, plus room to install new lines. So we're going to have a lot more flexibility in how we grow the business, and where those revenues come from. That's why this is such an important acquisition for us because not only is it going to be instrumental in growing our base business and our base product portfolio, but it's also going to give us an enormous amount of opportunities in the future. As we look at the revenue in the base business, we're looking at 2026 as a stabilizing year for the business. And that includes the customers that we have both in the Barfresh business and the Arps business, a little bit of growth in terms of being able to acquire and get back to some of these customers that we've lost and really setting us up for a very exciting 2027, especially once the new facility is done, and we get a really significant jump in efficiencies to the bottom line. Unknown Analyst: Got it. Got it. And then one more on the recent signing of this Nevada large school district. I mean, for a 7-year deal, I mean, that's also I think it's -- from an outside, I mean, it just looks like -- I mean, the business, and you have so much confidence to supply the product to sign such a long-term deal. And in the past, I mean, Barfresh has been able to sign similar kind of deals like with Los Angeles School District at some point, but I think you guys were supply constrained. Anything you can share on what the pipeline really looks like? I mean, does this just changes where you are not really just going after like smaller school districts, is not where you just intend to go after larger school districts and you have the confidence to be able to? Riccardo Delle Coste: We will. We will. We really are focused on just making sure that we get out of the old facility into the new facility. So that we start talking to those larger accounts and really starting to build that pipeline and being able to go after the business aggressively. And that's just something that we couldn't do before because we couldn't supply. Unknown Analyst: Okay. And on that facility upgrade, what is the time line? I think you said end of 2026. Riccardo Delle Coste: It will be before the end of the year. Operator: [Operator Instructions] All right. And it looks like there are no further questions at this time. So with that, I would like to thank everyone for their participation, and this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful rest of your day. Before you buy stock in Barfresh Food Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Barfresh Food Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,852!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,317,207!* Now, it’s worth noting Stock Advisor’s total average return is 984% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 27, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Barfresh (BRFH) Q4 2025 Earnings Call Transcript was originally published by The Motley Fool

Download the Complete Report Here Key Takeaways: Top-line beat was driven by stronger-than-expected contribution from Arps Dairy’s milk processing operations, supporting continued revenue scale-up. BRFH’s 1Q26 revenue increased 92% y/y to $5.6 million from $2.9 million in 1Q25, exceeding management’s $5.0-$5.2 million guidance range. The upside was driven by stronger-than-anticipated contribution from Arps Dairy’s raw and processed milk business, which expanded the consolidated revenue base but carries a lower margin profile than BRFH’s core frozen beverage and food products. Profitability reflected the transitional nature of the model shift, with gross margin pressure partly offset by opex discipline and a narrower adjusted EBITDA loss. Gross margin declined to 18% in 1Q26 from 31% in 1Q25, driven by Arps Dairy’s lower-margin milk processing contribution and startup costs associated with producing in the newly acquired processing facility. Adjusted EBITDA improved to a loss of $238,000 from a loss of $506,000 y/y, but came in below prior breakeven expectations because revenue mix was more heavily weighted toward lower-margin milk processing than anticipated and production volumes through the acquired facility were lower than planned. Net loss improved to $661,000 from $761,000 y/y, indicating that revenue scale and cost discipline are beginning to narrow losses, though not yet enough to fully offset integration costs and facility ramp inefficiencies. Arps Dairy remains the central strategic initiative as it gives BRFH production control, improves customer credibility, and creates the manufacturing base needed to support a larger institutional platform. The Arps processing facility supported ~50% of BRFH’s frozen beverage and food volume in 1Q26, while the company continued to use co-manufacturers for some product during the transition. We view this as a staged internalization process rather than a completed transition, with current inefficiencies tied to equipment ramp-up, installation timing, training, and lower-than-planned production volumes through the owned facility. The strategic benefit is that owned production gives BRFH greater control over availability, timing, and execution, reducing reliance on third-party co-manufacturers while strengthening its ability to pursue larger school districts and foodservice accounts that require dependable supply at scale. The larger 44,000-square-foot Defiance facility remains on track for commissioning before year-end 2026 and should provide the step-change in throughput, flexibility, and unit economics needed for the next phase of growth. BRFH continues to procure and install equipment and personnel at the larger Ohio facility, supported by a $2.4 million government grant for specialized equipment and the $7.5 million senior convertible note financing completed in March 2026. The financing allowed BRFH to pay off the existing mortgage on the facility and own it free and clear, while management expects to evaluate mortgage and equipment financing against the unencumbered facility to support growth objectives and potentially repay a portion of the convertible note. Customer recovery and large-district momentum reinforce demand visibility in the core education channel, where supply reliability is often as important as product adoption. Education remains BRFH’s primary focus and greatest near-term opportunity, with tangible progress rebuilding customer relationships and adding new school district wins during 1Q26. The broker network and direct sales team have been communicating manufacturing progress and improved supply reliability to districts, and that message appears to be gaining traction. The 7-year award with the fifth largest school district in the U.S. remains a key validation point, demonstrating that BRFH can compete for large-scale procurement contracts where compliance, operational simplicity, and dependable fulfillment are central decision criteria. More importantly for the current quarter, bid season remains active and the company is progressing on customer reactivation as prior supply constraints ease. BRFH’s 2026 priorities remain centered on completing the manufacturing transition, rebuilding education demand, and expanding the long-term revenue base. The immediate focus is commissioning the new manufacturing facility before year-end 2026, which should improve production efficiency, capacity, and supply reliability. In parallel, the company is rebuilding and expanding its education customer base following prior supply disruptions, while beginning to evaluate adjacent opportunities in foodservice, convenience, and other channels as capacity increases. Longer term, the expanded facility could also support co-manufacturing revenue once operations are stabilized, adding a potential incremental growth stream beyond BRFH’s core branded education business. 2026 remains a transition year, with revenue growth and EBITDA conversion weighted to the back half. Management introduced 2Q26 revenue guidance of $5.2-$5.6 million, representing more than 200% growth versus the prior-year period, and expects an adjusted EBITDA loss of $0.3-$0.2 million as the company continues progressing through manufacturing transition and facility optimization. At the midpoint, 2Q26 revenue of $5.4 million would be roughly in line with 1Q26 revenue of $5.6 million, but the y/y comparison remains strong because 2Q25 was seasonally weak for the legacy Barfresh business. The company reiterated 2026 revenue guidance of $28-$32 million, representing 97%-125% growth versus 2025, and adjusted EBITDA guidance of $3.2-$3.8 million, implying profitability should improve meaningfully in 2H26 as school-year demand, production efficiency, and product mix improve. Illustrative 2027 outlook highlights significant operating leverage potential, driven by new customer opportunities. Based on illustrative figures presented in BRFH’s investor presentation (not to be interpreted as formal guidance), management outlined a potential pathway to ~$70 million in revenue by 2027 (vs. ~$28-32 million base in 2026), driven by $40 million+ incremental contribution from new customer opportunities under discussion. This potential is contingent on conversion of current discussions and incremental capital deployment to support capacity expansion. Working capital remains thesis-relevant because seasonal school demand requires inventory readiness and dependable service levels. As of March 31, 2026, BRFH had approximately $4.1 million of cash and accounts receivable and approximately $1.8 million of inventory, modestly above the ~$1.7 million level at year-end 2025. The inventory build appears constructive if it supports back-to-school readiness and customer reactivation, though cash conversion should be monitored as production transitions and demand ramps through 2H26. Our analysis suggests BRFH remains undervalued relative to its growth profile, manufacturing transition, and potential EBITDA inflection. The following analysis is illustrative in nature and does not constitute a price target or investment recommendation. We assess valuation using a combination of absolute, time-series, and relative peer-based approaches to frame potential re-rating as revenue growth, gross margin recovery, and profitability improve. BRFH currently trades at a discount to both its historical trading range and relevant peers, despite a step-change in revenue growth and a guided profitability inflection. Based on management guidance, BRFH is positioned to deliver approximately 111% revenue growth in 2026E at the midpoint of the guidance range, alongside adjusted EBITDA of approximately $3.5 million. This outlook is supported by improved supply reliability, reactivation of education accounts, facility optimization, and incremental daypart expansion, dynamics that do not appear fully reflected in the current multiple. At present, BRFH trades at 1.32x 2026E P/Sales, representing a meaningful discount to its one-year mean of 2.25x and well below its one-year peak multiple of 3.92x. We believe re-rating potential will increasingly depend on execution against measurable operational milestones, including sustained revenue growth through the school-year ramp, continued gross margin recovery from the 18% level reported in 1Q26, improved production efficiency as transition costs normalize, and achievement of positive adjusted EBITDA during 2026. Demonstrated supply reliability, successful customer re-engagement in education, commissioning of the 44,000-square-foot Defiance facility, and progress toward higher utilization of the vertically integrated manufacturing platform could support valuation convergence toward peer and historical benchmarks. Download the Complete Report Here Read Exec Edge’s Initiation on Barfresh Food Group Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected]