Barfresh Food Group Reports 4% Revenue Growth but Wider Net Loss in Q1 2025

Barfresh Food Group Inc. reported its financial results for the first quarter of 2025, revealing a revenue increase of 4% to $2.93 million, compared to $2.83 million in the same period of 2024. The growth was attributed to higher sales of its bottled Twist & Go smoothies. However, the cost of revenue rose significantly by 22% to $2.03 million, primarily due to trial costs associated with a new manufacturer and elevated supply costs during production adjustments. As a result, the company's gross profit decreased to $900,000, reflecting a gross margin of 31%, down from 41% in the prior year.

Operating expenses for Barfresh also saw an uptick, totaling $1.64 million, a slight increase from $1.62 million in the previous year. Selling, marketing, and distribution expenses rose by 19% to $824,000, driven by increased personnel costs and expanded broker commissions. General and administrative expenses decreased by 13% to $747,000, largely due to reduced legal costs related to ongoing disputes with a contract manufacturer. The net loss for the quarter widened to $761,000, compared to a loss of $449,000 in the first quarter of 2024, primarily due to the decline in gross profit.

In terms of operational developments, Barfresh has been working to expand its manufacturing capacity. The company has developed a new manufacturer relationship since the fourth quarter of 2024, following challenges with a previously contracted manufacturer. The company anticipates that expanded capacity will be available in the second half of 2025, contingent on successful pre-production activities. Additionally, Barfresh has introduced single-serve smoothie cartons to mitigate supply disruptions caused by the ongoing legal dispute with its primary contract manufacturer.

As of March 31, 2025, Barfresh's total assets increased to $5.34 million from $3.32 million at the end of 2024, driven by a significant rise in cash reserves to $1.87 million, up from $235,000. The company’s working capital improved to $2.85 million, compared to $606,000 at the end of the previous fiscal year, largely due to capital raised through a registered direct offering of common stock that generated $2.97 million. The company’s total liabilities decreased to $2.55 million from $2.74 million, reflecting a reduction in current liabilities.

Looking ahead, Barfresh aims to normalize its gross margin in the latter half of 2025 as new co-manufacturers ramp up production. The company is focused on improving its supply chain and cost structure while managing its liquidity needs, which will depend on the successful ramp-up of sales and control of operating expenses. Despite the challenges, Barfresh has taken steps to alleviate concerns regarding its ability to continue as a going concern, including securing litigation financing to support its ongoing legal disputes.