Zevia (ZVIA) Q3 2026 earnings review
Zevia soda volume rebounds, but new funding dilutes shareholders
Zevia's soda volume rebounded in warehouse clubs and online, while lower fuel bills shrank its operating loss. Net sales grew 18% as case volume rose 14% and shoppers accepted higher prices without extra discounting. Chief executive Alexandre Ruberti raised the full-year outlook and secured $20 million in preferred stock financing, though the fourth-quarter plan points to just 2% sales growth.
| Net sales | $48.3M +18.4% from a year ago |
|---|---|
| Case volume | +14.4% -3.7% last quarter |
| Ebitda loss, excluding one-offs | -$0.89M outlook: -$3.5M to -$3.0M |
| Full-year sales outlook | Raised $5.5M middle of the range: 10.4% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because shoppers bought more cases at higher prices and fuel inflation eased, removing the threat of a fourth-quarter sales drop. Zevia also locked in early 2027 store tests at Target and Sam's Club alongside its first grocery push for single cans. One caution: marketing jumped to 15% of sales for the Cardi B campaign with no proof yet of faster store turnover, and the new preferred stock adds a 6% annual dividend paid in shares.
The question now is whether Zevia can turn celebrity online buzz and temporary club rotations into steady grocery shelf space. Either the first-quarter single-can rollout and store tests build repeat buying, or growth slows again once the warehouse club rotation ends. First-quarter store conversions and disclosed household buying rates will settle it.
🐂 Bull Case
Case Volume Rebounded Alongside Higher Prices
Last quarter, Zevia grew sales only because it raised prices while the number of cases it sold fell 3.7%. Management ruled out further price hikes for the year, which left growth dependent on shipping more cases.
In the third quarter, case volume rebounded 14.4% from a year ago while higher prices added another 4.0 percentage points to sales growth. Finance chief Girish Satya said "we actually saw stronger sell-through on the rotation than we had planned" in warehouse club stores, alongside higher sales on Amazon and Walmart.com. Because shoppers accepted the price increases, the company also held back planned promotional discounts.
What to watch: case volume growth in the fourth quarter, when seasonal demand is lowest. A positive volume reading without heavy discounting would prove the rebound goes beyond a single warehouse club rotation.
Lower Fuel Costs Lift the Full-Year Plan
Three months ago, Zevia faced $11 million in extra aluminum tariff and fuel costs for the year, and its unchanged annual outlook pointed to a fourth-quarter sales drop of about 4% by our math.
Fuel costs in the third quarter came in $900,000 below management's forecast, and warehousing savings helped cut selling expenses (freight and storage costs) by 2.4 percentage points of sales to 16.5%. Satya lowered the full-year fuel and aluminum cost estimate to $8.5 million and raised the annual sales outlook by $5.5 million at the middle of the range. However, the fourth-quarter forecast still calls for just 1.7% growth because of "the potential impact of retailer adjustments to the timing of shipments and inventory levels".
What to watch: fourth-quarter net sales against the $37.5 million to $39.5 million target. Finishing at or above the range would show that retailer inventory shifts did not stall shipments.
New Store Tests and Single-Can Plans Advance
Chief executive Alexandre Ruberti has named in-store visibility and single-can sales as Zevia's biggest opportunities, because selling individual cold cans lets shoppers try the soda without buying a multi-pack.
This quarter, Ruberti detailed the first store commitments for 2027. Zevia will launch a limited-time offer with end-of-aisle displays in more than 900 Target stores in February, run an 80-store rotation at Sam's Club in March, and use distributor Dot Foods to enter food-service outlets. The company will also start rolling out single cans in grocery stores during the first quarter and hired outside merchandising agencies to manage store shelves outside its West Coast delivery network.
What to watch: how many of the 900 Target and 80 Sam's Club test locations convert into permanent shelf space next spring. Winning permanent aisles would reduce Zevia's reliance on temporary club rotations.
🐻 Bear Case
Cardi B Campaign Lacks Store Sales Proof
Zevia is spending heavily on celebrity promotions to attract younger drinkers. Marketing expenses (advertising and brand promotions) rose 2.7 percentage points of net sales from a year ago to 14.8%, or $7.2 million, driven by a campaign with musician Cardi B.
Ruberti highlighted 1.8 billion media impressions, 70,000 email sign-ups, and a five-point rise in brand awareness among 18-to-34-year-olds. Yet he noted that "While it is too soon to quantify conversion and retail velocities", retailers have responded well. For a fourth straight quarter, the company gave no figure for household penetration — the share of US homes buying Zevia — which makes it impossible to verify whether online attention is turning into store purchases.
What to watch: sales velocity and repeat buying from the Cardi B flavor launch in January 2027. If marketing stays near 15% of sales without disclosed gains in household penetration, the campaign is buying attention rather than customers.
Preferred Stock and Grants Dilute Shareholders
Zevia has funded employee pay and brand endorsements with stock grants, and it has now added a dilutive financing deal despite holding $29.5 million in cash and no debt at quarter-end.
On October 22, Zevia agreed to issue $20 million of convertible preferred stock (shares that convert into common stock at a 20% premium to the recent average price) to GP Investments. The preferred shares pay a 6% annual dividend in additional stock rather than cash, compounding future dilution. Meanwhile, diluted common shares already rose 7.1% from a year ago to 72.1 million on ongoing stock compensation of $1.0 million in the quarter.
What to watch: the exact number of underlying common shares issued in the GP Investments closing schedule in the third-quarter filing. That figure will set the baseline for how much existing shareholders are diluted each year by the 6% stock dividend.
Underlying Gross Margin Fell on Aluminum Costs
Zevia reported that gross margin (the share of sales left after the cost of making the drinks) rose 0.8 percentage points from a year ago to 46.4%, helped by higher prices.
However, last year's third quarter included an $800,000 write-down for obsolete packaging inventory. Excluding that one-time charge from the comparison year, prior-year gross margin was 47.5% and this quarter's gross margin actually fell 1.1 percentage points by our math, as higher aluminum costs outweighed price increases. Management also expects fourth-quarter gross margin to stay roughly flat with last year's 47.7%, down from 48.9% in the second quarter.
What to watch: gross margin in the first quarter of 2027, when $3 million to $5 million in planned production and selling savings begin. A reading back above 48% would show the cost cuts are offsetting aluminum tariffs.
👓 Other Themes
Reset Targets New Drinks by Late 2027
Using the $20 million from GP Investments and $3 million to $5 million in 2027 cost savings, Ruberti said "we have the potential to triple the size of our business over time" by entering functional and wellness drinks outside traditional soda. Two or three new products will "launch in second half of 2027 in a digital sphere first, and then a full rollout will be in 2028", while 2027 relies on core soda.
💲 Other KPIs
Cash on hand rose from $28.5 million last quarter and $25.4 million at year-end, with zero debt and an untouched $20 million credit line. Including the $20 million GP Investments financing that closed after the quarter ended, total cash reaches nearly $50 million by our math.
Inventories (unsold cans and raw materials) fell 25.8% from $20.4 million at the end of 2025 as warehouse club rotations cleared stock. That working-capital release generated $4.9 million of free cash flow over the first nine months, including $1.4 million in the third quarter by our math, reversing last year's cash burn.
Overhead costs — staff pay and outside professional fees — rose $0.6 million from a year ago on higher employee bonus accruals, but fell as a share of net sales by 1.7 percentage points to 17.1%, down from 19.7% in the first quarter and 19.0% in the second quarter.
🔮 Guidance
Raised. The middle of the range moved up $5.5 million to $178 million, or 10.4% growth for the year. Excluding the discontinued tea line, full-year sales growth would be about 12.4% by our math. Across four quarters of outlooks for 2026, Zevia has moved the middle of the range by +$1.5 million, $0, and now +$5.5 million.
Raised against the $36.4 million previously implied by the full-year outlook. The plan calls for 1.7% growth from a year ago at the middle of the range, slowing from 18.4% in the third quarter on seasonal patterns and retailer inventory timing. Zevia has beaten its quarterly sales midpoint five straight times by an average of 6.8%; if the pattern holds, fourth-quarter sales would reach $41.1 million by our math.
Raised. The middle of the range improved by $2.8 million to a loss of $0.2 million, nearly restoring management's original goal of breaking even for the year. Lower fuel costs trimmed the full-year aluminum and freight headwind from $11.0 million to $8.5 million.
Raised against the -$1.2 million midpoint previously implied by the annual outlook. At the middle of the range, the -$0.7 million loss represents a -1.8% margin on sales, matching the third quarter's -1.8% margin as marketing investments continue.
❓ Key Questions
Did the Cardi B campaign lift household penetration?
Zevia spent 14.8% of third-quarter sales on marketing and cited 1.8 billion impressions, but has not reported household penetration since it stood near 5.3%. Investors need to know if celebrity awareness is bringing new buying households into stores.
How many stores will carry single cans in Q1?
Management previously sized the single-can opportunity at $80 million and plans a first-quarter grocery rollout. What is the exact store count committed for Q1, and how do single-can profit margins compare with multi-packs after cooler placement costs?
Why raise $20 million with $29.5 million in cash?
Zevia generated $4.9 million in nine-month free cash flow, holds $29.5 million in cash, and has an untouched $20 million credit line. Why issue preferred stock carrying a 6% stock dividend now when new drinks do not launch in stores until 2028?
What is the 2027 spending budget for the reset?
Management expects $3 million to $5 million in cost savings starting in the first quarter of 2027 to reinvest in third-party merchandisers and digital marketing. Will total 2027 spending stay inside those savings, or will the GP Investments cash fund deeper operating losses?