Summary of EDBL Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 Revenue: Approximately $4.1 million, up from $3.9 million in Q4 2024.

Full Year Revenue: Approximately $12.8 million, down from $13.9 million in 2024, primarily due to the strategic exit from low-margin floral and lettuce segments.

Cost of Goods Sold (COGS): Q4 COGS was approximately $5.3 million, up from $3.8 million in the prior year, reflecting investments in onboarding new retail customers.

Gross Profit: Q4 gross profit was a loss of approximately $1.2 million, compared to flat results in 2024. Full-year gross profit was a loss of $0.2 million, down from a gain of $2.3 million in 2024.

SG&A Expenses: Q4 SG&A expenses were approximately $4.6 million, up from $2.6 million in the prior year, driven by acquisition-related costs and higher compensation.

Balance Sheet: Improved stockholders' equity due to preferred stock issuance and a reduction in total debt by approximately $0.6 million year-over-year.

2Strategic Updates and Business Highlights

Retail Expansion: Increased distribution to nearly 6,000 store locations, including new partnerships with Kroger, Weis Markets, and Safeway.

Product Growth: Strong performance in cut herbs and vitamins/supplements, with significant growth in the condiment category.

New Initiatives: Introduction of a ready-to-drink (RTD) product line, leveraging existing relationships and infrastructure, with plans for a state-of-the-art manufacturing facility in the Midwest.

Market Opportunity: The global RTD market is projected to grow from $842.5 billion in 2025 to approximately $1.26 trillion by 2033.

3Forward Guidance and Outlook

Growth Expectations: Anticipated continued growth in both core produce and new CPG categories, with a focus on higher-margin products.

Margin Recovery: Aiming for gross margin recovery in 2026 as new programs scale and costs normalize.

Revenue Breakdown: Expectation of a blended margin in the low double digits to mid-teens, with significant upside potential in the RTD segment, targeting margins of 20% to 30%.

4Bad News, Challenges, or Points of Concern

Declining Revenue: Full-year revenue decline attributed to exiting low-margin segments, which may raise concerns about overall growth sustainability.

Increased Costs: Elevated COGS and SG&A expenses in Q4 due to strategic investments, leading to losses that may impact short-term financial performance.

Market Risks: Potential competitive pressures in the RTD market and the need to manage costs effectively while scaling operations.

5Notable Q&A Insights

Margin Comparisons: Management indicated that RTD products are expected to have more robust margins compared to fresh produce due to reduced shrinkage and better manufacturing control.

Sustainability of Growth: Management expressed confidence in sustaining growth through existing customer relationships and expanding into new categories, particularly RTD products.

CapEx for New Facility: Plans for significant capital expenditures for the new manufacturing facility, with expectations to be operational by late 2027.

Product Focus: Initial RTD offerings will focus on protein-based products, with plans for both proprietary and private label options, leveraging established retailer relationships. Overall, Edible Garden AG Incorporated is navigating a strategic transition towards higher-margin consumer packaged goods while facing challenges related to cost management and revenue sustainability.