Barfresh Food Group Q1 Earnings Call Highlights

Barfresh Food Group (NASDAQ:BRFH) reported first-quarter 2026 revenue of $5.6 million, up 92% from $2.9 million in the prior-year period, as the company continued integrating the Arps Dairy acquisition and shifting more production into its own manufacturing network.

Founder and CEO Riccardo Delle Coste said the quarter represented “a continuation of the momentum built through 2025,” with revenue slightly above the company’s expectations. The outperformance was driven by stronger-than-anticipated contribution from Arps Dairy’s raw and processed milk business, he said, though that revenue carries a lower margin profile than Barfresh’s core frozen beverage and food products.

“Overall, we remain on track with our fiscal 2026 plan, and the strategic work underway gives me confidence in our long-term growth opportunity,” Delle Coste said.

Arps Dairy boosts sales but weighs on margins

CFO Lisa Roger said first-quarter revenue exceeded the company’s guidance range of $5 million to $5.2 million. However, gross margin declined to 18% from 31% a year earlier, reflecting the mix shift toward Arps Dairy’s milk processing operations, which have lower margins and are exposed to commodity pricing fluctuations.

Roger also cited transition costs tied to production at the newly acquired processing facility. She said those pressures were expected as the company ramps toward its target operating model and added that Barfresh expects margin recovery through the remainder of 2026 and into 2027.

During the question-and-answer session, Roger said the raw and processed milk business was running at about a 5% margin in the first quarter, based on segment reporting in the company’s 10-Q, and that it is expected to become a smaller share of revenue as the company moves into the new school year. Asked about normalized gross margins once inefficiencies are addressed and equipment is installed, Roger said the company should return to the “low 40s.”

Adjusted EBITDA loss narrows

Barfresh reported a first-quarter net loss of $661,000, compared with a net loss of $761,000 in the same period last year. Adjusted EBITDA was a loss of about $238,000, improving from a loss of about $506,000 a year earlier.

Roger said adjusted EBITDA came in below the company’s breakeven guidance because revenue was more heavily weighted toward the lower-margin milk processing business than expected and because of startup inefficiencies at the newly acquired processing facility. She said those inefficiencies are “typical of facility transitions” and are improving as production processes are optimized and volume builds.

Selling, marketing and distribution expenses fell to $697,000 from $824,000 a year earlier. Roger attributed the decline to lower personnel costs as the company relies more on its broker network, reduced sampling expense following last year’s launch of Pop & Go Freeze Pops, and lower equipment maintenance costs as more education-channel sales come from single-serve products that do not require customer equipment.

General and administrative expenses were $755,000, compared with $747,000 in the prior-year quarter.

Manufacturing transition remains central to 2026 plan

Delle Coste said Barfresh’s Arps Dairy processing facility supported about 50% of the company’s frozen beverage and food volume during the first quarter. The company is also working to complete a larger 44,000-square-foot facility in Defiance, Ohio, where it plans to install equipment and add personnel to support more efficient and flexible production.

Barfresh remains on track to commission the larger facility before the end of 2026, Delle Coste said. The project is supported by a $2.4 million government grant for specialized equipment.

In March, the company closed a $7.5 million senior convertible note financing. Roger said that, together with the government grant, provides a capital foundation to support facility build-out and operational growth through 2026. The company is also evaluating financing options, including mortgage and equipment financing against its unencumbered facility, to support growth objectives and potentially pay down part of the convertible note.

Education channel remains primary growth focus

Management emphasized that the education channel remains Barfresh’s main near-term opportunity. Delle Coste said the company is rebuilding customer relationships and winning new school district business as it communicates progress on manufacturing capacity and supply reliability.

He pointed to the company’s recent seven-year bid award with the fifth-largest school district in the United States as evidence that Barfresh can compete for large contracts.

“This win demonstrates that we can compete successfully for the most significant contracts in the country,” Delle Coste said. “It is a benchmark for the pipeline of similar opportunities we are building.”

In response to analyst questions, Delle Coste said bid season was still underway and the company had received “quite a few” bids for the upcoming school year. He said Barfresh is working to regain customers it lost because of prior supply constraints and expects the back half of the year to be its strongest yet for core Barfresh products.

Asked by Greenridge Global’s William Gregozeski whether the new school year should bring a step increase in revenue, Delle Coste said, “That’s what we’re expecting.”

Guidance reaffirmed

Barfresh reaffirmed its full-year fiscal 2026 guidance for revenue of $28 million to $32 million and adjusted EBITDA of $3.2 million to $3.8 million. For the second quarter, the company expects revenue of $5.2 million to $5.6 million and an adjusted EBITDA loss of $200,000 to $300,000.

Delle Coste said 2026 remains a pivotal year as the company moves toward an integrated manufacturing model, which he described as the foundation for a business capable of fulfilling demand more reliably and pursuing growth more aggressively.

He said the company’s priorities for the rest of the year are completing and commissioning the new facility, rebuilding the education customer base, exploring future opportunities in food service, convenience and other channels, and evaluating potential co-manufacturing revenue opportunities after the expanded facility is operating.

When asked about co-manufacturing, Delle Coste said it is a possibility once the new facility is up and running, but that 2026 is primarily a transition year focused on production, core products and customer service.

About Barfresh Food Group (NASDAQ:BRFH)

Barfresh Food Group, Inc develops, manufactures and distributes a line of fresh-frozen, portion-controlled beverage and breakfast products for the foodservice and retail channels. The company’s flagship offerings include smoothie base blends, pancake and waffle mixes, and related griddle products designed to deliver convenience, consistency and controlled portions. Barfresh products require only the addition of liquid and blending or mixing prior to service, catering to operators seeking quick-serve solutions without sacrificing quality.

Operating from a single, fully certified manufacturing facility in Miami, Florida, Barfresh adheres to strict quality and safety protocols throughout its production processes.