Reed's, Inc. Reports Q1 2025 Financial Results with Increased Net Sales but Wider Loss

Reed's, Inc. reported its financial results for the first quarter of 2025, revealing a net loss of $2.03 million, or $0.04 per share, compared to a net loss of $1.67 million, or $0.40 per share, in the same period last year. The company's net sales increased by 5% to $10.03 million from $9.60 million, driven by a rise in gross billing, which reached $11.01 million, up 6% year-over-year. The cost of goods sold also rose, totaling $6.63 million, which represented 66% of net sales, compared to 64% in the prior year. Gross profit remained relatively stable at $3.40 million, down slightly from $3.41 million in the previous year.

The company's operating expenses surged by 27% to $5.14 million, primarily due to increased delivery and handling costs, which rose to $1.63 million, and higher selling and marketing expenses, which reached $1.50 million. General and administrative expenses also increased significantly to $2.02 million. The loss from operations widened to $1.74 million from $0.65 million in the same quarter last year, reflecting the impact of rising costs amid a challenging economic environment characterized by inflation and supply chain disruptions.

In terms of operational metrics, Reed's, Inc. reported a significant increase in inventory, which rose to $12.33 million from $8.11 million at the end of 2024, as the company aimed to meet customer demand more effectively. The total cash balance as of March 31, 2025, was $4.86 million, down from $10.39 million at the end of the previous fiscal year. The company also noted that it had 45,371,247 shares of common stock outstanding as of May 9, 2025.

Strategically, Reed's, Inc. is focusing on enhancing its supply chain and improving gross margins through various initiatives, including optimizing packaging and leveraging purchasing efficiencies. The company is also expanding its product offerings, particularly in its core brands, which include Reed’s Real Ginger Ale and Virgil’s Zero Sugar handcrafted sodas. The management anticipates that these efforts will help drive sales growth and improve operational performance in the coming quarters.

Looking ahead, Reed's, Inc. is evaluating refinancing options for its Senior Secured Loan, which is due in November 2025. The company expects that its existing cash, ongoing operational cash flow, and access to committed financing will be sufficient to support its operational plans for at least the next twelve months. However, management has acknowledged the potential need for additional funding to support growth initiatives and investments in new markets and technology. The company remains cautious about the economic landscape, particularly regarding inflation and supply chain challenges, which could impact future performance.