Laird Superfood, Inc. (LSF) Earnings Call Transcript & Summary

Thanks, and good afternoon everyone. I'd like to welcome all of you to the earnings conference call and webcast for Laird Superfood's second quarter of 2026. Joining us today are Jason Vieth, who serves as Laird Superfood's President and Chief Executive Officer, along with Anya Hamill, our Chief Financial Officer. At this point, you should all be able to access our earnings release, which we filed earlier today following the close of the market; you can find it in the Investor Relations portion of our site, lairdsuperfood.com. Before we get started, I want to remind everyone that management might make forward-looking statements on this call as defined under federal securities laws. Such statements reflect management's present expectations and carry risks and uncertainties that may lead actual results to differ materially from what has been described. For a thorough discussion of these risks and uncertainties, please see today's press release as well as our other filings with the SEC. With that said, I'll hand things over to Jason.

Hello, everyone, and thanks for being here this afternoon. I'm Jason Vieth, and I serve as President and CEO of Laird Superfood. Joining me is Anya Hamill, our Chief Financial Officer. Following the market's close, we put out our Q2 numbers and submitted the 10-Q, and you can find both on our investor relations website now. The second quarter marked yet another period of major change for us. On April 21st, we finalized our purchase of Terrasoul Superfoods, and just as significantly, we finished folding Navitas entirely into our operations, our team structure, and our ERP platform — that effort is complete. Laird Superfood now includes this team within its operations. The merged company already runs on one platform, with common workflows and clear ownership, which lets us go to market as a single entity in front of buyers, distribution partners, brokers, and everyone else we work with. With Navitas brought to this stage, we're ready to bring Terrasoul through the same careful integration playbook. Building this platform was always about making something stronger than any one brand could manage alone. Functional coffee and creamer expertise, dependable organic superfoods, plus ingredient production and marketplace strength that we own end to end — all of it is now housed together. When you put these two deals side by side, what we get is more scale, wider reach in distribution, better leverage when sourcing, and plenty of ways to grow across retail, club, e-commerce, and food service. They mark our first moves in a deliberate roll-up play within superfoods and positive nutrition. We've said all along that this is only the start. Our plan is to keep bringing together top-quality brands whose missions line up with us and that match the close-to-the-earth, minimally processed profile shoppers want more and more — and to do that carefully in the years ahead as we build the platform into a genuine leader in the category. You can already see early synergies from the combination showing up in our results. For the quarter, adjusted EBITDA reached $3 million, which is a substantial improvement over the $0.1 million figure we posted during the same period last year. That result incorporates the impact of the businesses we acquired as well as the expense and operational synergies now starting to reach the bottom line. Gains are being realized in supply chain, shared overhead, and marketing effectiveness, and we anticipate these advantages will grow as we progress through the second half of the year. Getting the systems and organizational integration done that fast meant those savings started showing up sooner than we'd anticipated, and that matters as a proof point for how we plan to go after future opportunities; over on the commercial side, some of our biggest categories are trending in an encouraging direction. Cacao products keep performing very well, and our coffee business is also building solid momentum in key retail channels. During the second quarter, we launched five coffee and creamer SKUs into more than 1,000 Walmart stores nationwide. This big step-up sets us up to grow sequentially once the reset is entirely carried out during Q3; on top of that, we broadened what we offer at Target, and real momentum is being built on Amazon as well as additional online marketplaces; such gains stem from innovation that is sharply focused, a supply chain that is stronger, and partnerships that go deeper with the biggest retailers nationwide. The platform's greater scale is already transforming the character of those discussions. We can now present a wider and more attractive product range, which we expect will allow us to gain added shelf space and receive stronger backing from our customers down the road. Net sales during the quarter came to $41.3 million, a 244% increase over the same period a year earlier, mostly because of the businesses we acquired being added in. Gross margin was squeezed by the mix from the lower margin acquired business plus certain commodity positions that remain and that we keep exiting as we sell through inventory bought last year. Those pressures are being handled with care, and our attention stays on cost and supply chain synergies that should help margins widen eventually. We closed the quarter holding $23.2 million in cash with no debt, providing a sturdy base as we keep integrating and putting money into future growth. Taking the first half as a whole, net sales reached $55.2 million along with $1.8 million of adjusted EBITDA. At this point in the integration, the platform is delivering just as we had hoped. What gives us the most encouragement isn't merely the top-line jump, but rather that operational and commercial gains from combining these businesses are already appearing in our adjusted profitability. I'm happy to share as well that the full-year guidance we provided last quarter is being reaffirmed. Net sales between $138 million and $148 million, with adjusted EBITDA between $8 million and $12 million. That forecast accounts for a complete year of the combined platform, together with the synergies we're capturing now and anticipate speeding up. As integration goals are reached and our outlook for the second half comes into focus, we'll keep you posted. We're enthusiastic about the potential we see across retail and online marketplaces for each of our three brands. Now that new leaders for sales and marketing are in place, we'll determine the best opportunities to expand each one. To that end, we're building a robust innovation framework and rethinking our marketing methods to drive growth in product awareness and trial. We'll discuss these topics further on future calls. Some integration tasks and associated expenses remain in the near term, but the longer-term outlook is becoming more defined. We've put together a superfood company that is scaled and diversified, with capabilities that complement one another, better economics, and several routes to growth that lasts. Navitas has now been fully integrated. We're starting to see those synergies come through in adjusted EBITDA, and the commercial momentum—especially across areas such as cacao and coffee—along with a bigger retail footprint, makes us feel confident about what's ahead. Thanks to the capital and strategic backing from our partners at Nexus, we're still in a strong position to keep carrying out our roll-up strategy and to keep building what we think can turn into the top platform in this space. I'll hand things over to Anya at this point so she can walk through the numbers in more depth, and after that we'll take your questions.

Thanks, Jason, and good afternoon to all of you. Like Jason pointed out, the second quarter marked a transformative period for our company. I'll take you through the factors behind our Q2 performance, and then I'll discuss how we view the outlook for the entire year across the combined business of all three brands. For the second quarter of 2026, net sales reached $41.3 million, which is a 244% rise from $12 million during the same quarter in 2025. This sales growth came mainly from what the Navitas and Terrasoul acquisitions added, plus organic expansion of distribution within our wholesale channel. Wholesale stood as our biggest channel in this quarter, expanding by more than 2.5x compared with the prior year to hit $21.3 million and accounting for 51% of overall net sales, fueled by bringing in Navitas and Terrasoul. Sales through e-commerce rose by over 2x versus the previous year to $20.0 million and comprised 49% of overall net sales, powered by the inclusion of Navitas and Terrasoul sales, along with gains on amazon.com, partly offset by weakness in our direct-to-consumer segment. During the first half of the year, net sales totaled $55.2 million, marking a 134% increase from $23.6 million in the equivalent period a year earlier, with wholesale making up 52% of overall net sales and the e-commerce channel making up 48%. Gross profit for the second quarter came to $12.5 million with a gross margin of 30.3% of net sales, versus $4.8 million or 39.9% of net sales in the same period last year, which is a decrease of 9.6 percentage points. This margin squeeze resulted mainly from the inclusion of the recent acquisitions, plus some ongoing effects from an unfavorable mix of channels and products and rising costs for commodities. Looking at the year-to-date figures, gross profit stood at $17.2 million or 31.1% of net sales, compared with $9.7 million or 40.9% of net sales in the same period a year ago, driven by the same factors as in the second quarter. Operating expenses totaled $14.4 million in Q2 2026, versus $5.2 million in the same period last year, which is a 178% jump, mostly caused by expenses from merging the three companies, plus one-time costs for acquisition and integration. Sales and marketing costs climbed 139% to $7.1 million, which mirrors the business's greater size after the acquisitions, variable selling expenses from higher sales volumes, increased personnel costs as we expand the team to back the wider organization, and greater marketing spending across both online and retail channels. General and administrative costs rose 229% to $7.3 million. This rise stemmed almost completely from $3.5 million in costs for business combination and integration and $1.1 million in amortization expenses tied to intangible assets recognized in the Navitas and Terrasoul acquisitions. Both categories of expenses are either one-time or non-cash in nature, linked specifically to the deals and integration efforts. Net loss for the second quarter of 2026 was $1.8 million or $0.25 per basic and diluted share, versus a net loss of $0.4 million, or $0.03 per share in the same period last year. The bigger net loss came mostly from expenses tied to buying and folding in Navitas and Terrasoul, which I walked through earlier. For adjusted EBITDA, we posted $3.0 million during the second quarter of 2026, versus $0.1 million in the same period a year ago. Our rationale for treating adjusted EBITDA as a better gauge of underlying operating performance is that it leaves out things that aren't reflective of the business's ongoing cash economics. To break that down: $1.1 million in non-cash depreciation and amortization, $0.3 million in non-cash stock-based compensation, plus $3.5 million in business combination and integration costs that relate directly to closing and integrating the Navitas and Terrasoul acquisitions. Once you take those out, the gain in adjusted EBITDA came mainly from adding Navitas and Terrasoul along with early synergy realization, partly offset by inflationary commodity costs and higher marketing and selling expenses; looking at a year-to-date basis, net loss came to $0.1 million, or $0.10 per basic and diluted share, against a net loss of $0.5 million, or $0.05 per share, in the prior year period. That betterment stemmed from a discrete non-recurring income tax benefit tied to releasing a deferred tax valuation allowance acquired through the Navitas transaction, plus the contribution of Navitas and Terrasoul, partly offset by acquisition and integration costs and inflationary commodity cost. On a year-to-date basis, adjusted EBITDA reached $1.8 million, versus $0.5 million in the prior year period. As we bring the Navitas and Terrasoul businesses together and start to capture procurement and operational synergies, we anticipate adjusted EBITDA will improve meaningfully over the rest of the year. Moving now to our balance sheet. At June 30th, 2026, cash equivalents and restricted cash totaled $23.2 million, up against $5.3 million at December 31st, 2025, and $10.5 million at the close of last quarter. That rise largely came from proceeds of the Series A Preferred Stock issuance, partly offset by the consideration paid for the Navitas and Terrasoul acquisitions. We still carry no outstanding debt. Shifting now to the 2026 financial outlook. We are reaffirming the full year 2026 guidance we gave last quarter; for fiscal year 2026, we still expect consolidated net sales in the range of $138 million-$148 million, reflecting a full year of Laird Superfood and the post-acquisition contributions of Navitas and Terrasoul; we expect adjusted EBITDA to land in the range of $8 million-$12 million for fiscal 2026; this reaffirmed guidance reflects our continued confidence in the growth trends across the business and the pace of synergy capture achieved to date; we will provide updated guidance as integration milestones are achieved and visibility into the full year outlook improves; with that, I'll hand the call back to Jason for closing remarks, and then we will open it up for questions.

Thanks, and good to get my questions in. Let me begin with the outlook. When you think about the second half of the year, could you take us through the way we ought to frame gross margins? My recollection is that on the prior call you referenced a range in the low to mid-30s for the back half. I'd like to know whether that remains the right way to look at it. Then, regarding the range you've given for revenue guidance, it would help to understand what kinds of outcomes sit behind the bottom end as opposed to the top end. Which factors would be responsible for that? Thanks so much.

Hello, Eric. Anya here. I appreciate the question. Let me begin with margin, I suppose. You're probably aware that the audit of the Terrasoul business, which we acquired during Q2, has now been completed. That company had never been audited under GAAP standards before, and we now have greater visibility into how GAAP financial statements appear for that business. Because of this, it's a business with lower margins. Their model of operation is indeed different. Even so, when it comes to gross margin, it sits below the average portfolio at Laird's. Going forward, I'd say the low 30s is the right range for gross margin at our company. The other portion of your question concerns revenue guidance. On net sales, we are reaffirming the range we provided, which is $138 million-$148 million for fiscal 2026 for the ownership period, and that carries an implication of some acceleration occurring in the back half compared with the first half. As our visibility into how these businesses integrate improves, we will update that guidance this week as we progress through the back half of the year. That said, speaking personally, I would be disappointed if it didn't land closer to the middle of the range or the higher end.

Okay, that's useful. Now regarding the wins with Walmart and Target, congratulations. What portion of this hit Q2 as opposed to Q3? From what you said, it seems like most of the Walmart win probably lands in Q3. How should we think about the revenue cadence from these wins moving forward, and is there a clear route to ongoing door expansion, or just how should we consider expansion opportunities past these excellent initiatives?

Yes, absolutely.

Thank you.

Thank you, Eric. I'll begin by covering what this means for the quarters, and after that Jason can speak to how we move ahead toward expansion. Bringing Laird into Walmart is something we're quite thrilled about, and about that win as well. Q2 barely feels any effect from it. Almost the whole thing — really, the entire effect — lands in the back half, so Q3 and Q4. In Q2, hardly anything at all. Not material.

Okay, that's useful. Many thanks.

Hi, everybody. I appreciate you taking my questions. I've got a couple for you. To start, regarding your guidance for the year, if we broke it down across each business, what level of organic growth do you anticipate? Just a range would be fine. I believe in the prior quarter, it was roughly 10% for each business. I'm just curious whether that's still true.

Hi, George. I'll begin here, and then Jason may chime in and contribute; we don't actually break it out by brand. We view our business, particularly as we attempt to bring them together and integrate them, as truly operating one superfood platform with a portfolio of products and brands. I think our revenue guidance reflects accelerating net sales in the Q3, in particular in Q4. Then into next year as we combine those businesses. We don't really examine it by brand. We truly manage it as an integrated platform.