Freshpet, Inc.

Previous wording

Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are primarily sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 30,425 retail stores as of March 31, 2026. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Current wording

Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are primarily sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 30,721 retail stores as of June 30, 2026. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Previous wording

Outbound freight. We use a third-party logistics provider for outbound freight that ships directly to retailers as well as third-party distributors.

Current wording

Outbound freight. We use third-party logistics providers for outbound freight that ship directly to retailers as well as third-party distributors.

Previous wording

Condensed Consolidated Statements of Income (Loss)

Current wording

Condensed Consolidated Statements of Income

Previous wording

Net sales increased $34.4 million, or 13.1%, to $297.6 million for the three months ended March 31, 2026 as compared to $263.2 million in the same period in the prior year. The $34.4 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $17.2 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 14.6%, partially offset by unfavorable price/mix of 1.5%.

Current wording

Net sales increased $40.9 million, or 15.5%, to $305.6 million for the three months ended June 30, 2026 as compared to $264.7 million in the same period in the prior year. The $40.9 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $22.1 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 15.7%, partially offset by unfavorable price/mix of 0.2%.

Previous wording

Gross profit was $120.7 million, or 40.5% as a percentage of net sales, for the three months ended March 31, 2026, compared to $103.8 million, or 39.4% as a percentage of net sales, in the prior year period. The 1.1% increase in gross profit as a percentage of net sales was primarily due to lower input costs and improved leverage on plant expenses.

Current wording

Gross profit was $128.7 million, or 42.1% as a percentage of net sales, for the three months ended June 30, 2026, compared to $108.2 million, or 40.9% as a percentage of net sales, in the prior year period. The 1.2% increase in gross profit as a percentage of net sales was primarily due to lower input costs and improved leverage on plant expenses, partially offset by higher quality costs related to the startup of new technology lines.

Previous wording

Adjusted Gross Profit for the three months ended March 31, 2026 was $139.6 million, or 46.9% as a percentage of net sales, compared to $120.2 million, or 45.7% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Current wording

Adjusted Gross Profit for the three months ended June 30, 2026 was $148.4 million, or 48.6% as a percentage of net sales, compared to $124.0 million, or 46.9% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Previous wording

Adjusted SG&A for the three months ended March 31, 2026 was $101.7 million, or 34.2% as a percentage of net sales, compared to $84.7 million, or 32.2% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Current wording

Adjusted SG&A for the three months ended June 30, 2026 was $96.1 million, or 31.4% as a percentage of net sales, compared to $79.6 million, or 30.1% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Previous wording

As a result of the factors discussed above, income from operations increased by $15.8 million to income from operations of $4.3 million for the three months ended March 31, 2026 as compared to loss from operations of $11.5 million in the prior year period.

Current wording

As a result of the factors discussed above, income from operations increased by $3.9 million to income from operations of $21.7 million for the three months ended June 30, 2026 as compared to $17.8 million in the prior year period.

Previous wording

The Company recorded interest and other income, net of $2.9 million for the three months ended March 31, 2026 as a result of interest income generated from cash and cash equivalents as compared to $2.4 million in the prior year period.

Current wording

The Company recorded interest and other income, net of $2.8 million for the three months ended June 30, 2026 as a result of interest income generated from cash and cash equivalents as compared to $2.2 million in the prior year period.

Previous wording

Net income increased $61.2 million to net income of $48.5 million for the three months ended March 31, 2026 as compared to a net loss of $12.7 million in the prior year period, primarily due to the gain on equity investment, contributions from higher sales, and decreased non-recurring SG&A charges, partially offset by the increase in income tax expense.

Current wording

Net income increased $3.1 million to net income of $19.5 million for the three months ended June 30, 2026 as compared to $16.4 million in the prior year period, primarily due to the additional gain on equity investment and contributions from higher sales, partially offset by the increases in SG&A and income tax expense.

Previous wording

Adjusted EBITDA was $37.9 million for the three months ended March 31, 2026 as compared to $35.5 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See “—Non-GAAP Financial Measures” below.

Current wording

Adjusted EBITDA was $52.2 million for the three months ended June 30, 2026 as compared to $44.4 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See “—Non-GAAP Financial Measures” below.

Previous wording

Selling, general and administrative expenses ("SG&A") were $116.3 million, or 39.1% as a percentage of net sales, for the three months ended March 31, 2026, compared to $115.3 million, or 43.8% as a percentage of net sales, in the prior year period. The decrease in SG&A as a percentage of net sales was primarily due to a decrease in non-recurring charges that occurred in the first quarter of 2025, partially offset by increased media spend.

Current wording

Selling, general and administrative expenses ("SG&A") were $223.3 million, or 37.0% as a percentage of net sales, for the six months ended June 30, 2026, compared to $205.7 million, or 39.0% as a percentage of net sales, in the prior year period. The decrease in SG&A as a percentage of net sales was primarily due to a decrease in non-recurring charges that occurred in the first half of 2025, partially offset by increased logistics costs and variable compensation accrual.

Previous wording

Interest expense increased $0.1 million to $3.6 million for the three months ended March 31, 2026 as compared to $3.5 million in the prior year period. The increase was driven by $0.1 million of additional interest expense related to a finance lease liability.

Current wording

Interest expense decreased $0.1 million to $7.1 million for the six months ended June 30, 2026 as compared to $7.2 million in the prior year period. The decrease was primarily driven by higher capitalized interest in the period, partially offset by an increase in interest expense related to a finance lease liability.

Previous wording

The $62.0 million gain on equity investment for the three months ended March 31, 2026, resulted from the sale of the Company's non-controlling interest in a privately held company following the equity investment's acquisition by a third party, as discussed in Note 1 of our (unaudited) condensed consolidated financial statements.

Current wording

The $66.6 million gain on equity investment for the six months ended June 30, 2026, resulted from the sale of the Company's non-controlling interest in a privately held company following the equity investment's acquisition by a third party, as discussed in Note 1 of our (unaudited) condensed consolidated financial statements.

Previous wording

Income tax expense increased $17.0 million to $17.1 million for the three months ended March 31, 2026 as compared to income tax expense of $0.1 million in the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment.

Current wording

Income tax expense increased $23.2 million to $23.2 million for the six months ended June 30, 2026 as compared to the nominal income tax expense in the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment.

Previous wording

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable financial measure presented in accordance with U.S. GAAP:

Current wording

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP:

Previous wording

We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During the three months ended March 31, 2026, we spent approximately $27.6 million of capital to meet our capacity needs as well as recurring capital expenditures. We expect capital expenditures to total approximately $150 million in fiscal year 2026.

Current wording

We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During the six months ended June 30, 2026, we spent approximately $57.3 million of capital to meet our capacity needs as well as recurring capital expenditures. We expect capital expenditures to total approximately $150 million in fiscal year 2026.

Previous wording

Additionally, our cash flow generation ability is subject to general economic factors at the international, national and regional levels, including but not limited to increased interest rates and inflation, tariffs, trade wars, geopolitical conflict, war, recession, financial, competitive, legislative and regulatory factors and other factors that are beyond our control, including government or regulatory shutdowns or defunding, or disruptions with or increased costs imposed by our key suppliers or others within our supply chain. Further, such macroeconomic factors could negatively impact consumer sentiment, resulting in reduced demand and changes in purchasing behaviors for some or all of our products and other relevant factors, such as consumer hesitancy to trade up in pet food, deferral of pet-related expenses, and reduced pet adoption rates. While these factors are expected to persist in the near term, the Company has implemented strategic initiatives, including targeted marketing, value-focused product innovation, and expanded distribution in club and mass channels, to mitigate their impact. Management believes these actions will support continued growth and margin expansion, even if the current economic environment remains unchanged. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs.

Current wording

Our cash flow generation ability is subject to general economic factors at the international, national and regional levels, including but not limited to increased interest rates and inflation, tariffs, trade wars, geopolitical conflict, war, recession, financial, competitive, legislative and regulatory factors and other factors that are beyond our control, including government or regulatory shutdowns or defunding, or disruptions with or increased costs imposed by our key suppliers or others within our supply chain. Further, such macroeconomic factors could negatively impact consumer sentiment, resulting in reduced demand and changes in purchasing behaviors for some or all of our products and other relevant factors, such as consumer hesitancy to trade up in pet food, deferral of pet-related expenses, and reduced pet adoption rates. While these factors are expected to persist in the near term, the Company has implemented strategic initiatives, including targeted marketing, value-focused product innovation, and expanded distribution in club and mass channels, to mitigate their impact. Management believes these actions will support continued growth and margin expansion, even if the current economic environment remains unchanged. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs.

Previous wording

Working capital consists of current assets net of current liabilities. Working capital increased $97.0 million to $454.1 million as of March 31, 2026 compared to working capital of $357.1 million as of December 31, 2025. The increase was primarily a result of an increase of $103.4 million in cash and cash equivalents as a result of the proceeds from the sale of our equity investment, an increase of $3.8 million in inventories, net, an increase of $1.6 million in accounts receivable, and a decrease of $7.0 million in accounts payable. The increase was partially offset by a decrease of $2.5 million in prepaid expenses, a decrease of $0.3 million in other current assets, an increase of $15.9 million in accrued expenses as a result of timing, and an increase of $0.1 million in lease liabilities.

Current wording

Working capital consists of current assets net of current liabilities. Working capital increased $74.4 million to $431.5 million as of June 30, 2026 compared to working capital of $357.1 million as of December 31, 2025. The increase was primarily a result of an increase of $72.8 million in cash and cash equivalents, primarily as a result of the proceeds from the sale of our equity investment, an increase of $10.0 million in inventories, net, an increase of $1.6 million in accounts receivable, and a decrease of $5.6 million in accounts payable. The increase was partially offset by a decrease of $2.1 million in prepaid expenses, a decrease of $1.0 million in other current assets, and an increase of $12.5 million in accrued expenses as a result of timing.

Previous wording

As of March 31, 2026, our capital resources consisted primarily of $381.4 million of cash and cash equivalents on hand.

Current wording

As of June 30, 2026, our capital resources consisted primarily of $350.8 million of cash and cash equivalents on hand.

Previous wording

•$38.2 million of net income, adjusted for reconciling non-cash items, which excludes $10.3 million of non-cash items related to $62.0 million of gain on equity investment, partially offset by $16.1 million of deferred income tax expense, $25.0 million of depreciation and amortization, $9.1 million of share-based compensation, $0.6 million of amortization of deferred financing costs, $0.1 million of loss on disposal of property, plant and equipment, and $0.8 million of change in operating lease right of use asset; and

Current wording

•$91.4 million of net income, adjusted for reconciling non-cash items, which excludes $23.4 million of non-cash items related to $21.5 million of deferred income tax expense, $50.0 million of depreciation and amortization, $15.5 million of share-based compensation, $1.1 million of amortization of deferred financing costs, $0.2 million of loss on disposal of property, plant and equipment, and $1.6 million of change in operating lease right of use asset, partially offset by $66.6 million of gain on equity investment.

Previous wording

•a $2.1 million increase due to changes in operating assets and liabilities. The increase was primarily due to the change in accrued expenses and prepaid expenses and other current assets, partially offset by the changes in accounts receivable, inventories, other assets, accounts payable, and operating lease liability.

Current wording

•a $6.6 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accounts receivable, inventories, other assets, accounts payable, and operating lease liability, partially offset by the changes in accrued expenses and prepaid expenses and other current assets.

Previous wording

•$31.0 million of net income, adjusted for reconciling non-cash items, which excludes $43.7 million of non-cash items related to $21.8 million of depreciation and amortization, $11.5 million of provision for loss on accounts receivable, $8.8 million of share-based compensation, $0.5 million of amortization of deferred financing costs, $0.7 million of loss on disposal of property, plant and equipment, and $0.3 million of change in operating lease right of use asset.

Current wording

•$75.6 million of net income, adjusted for reconciling non-cash items, which excludes $72.0 million of non-cash items related to $42.4 million of depreciation and amortization, $11.5 million of provision for loss on accounts receivable, $15.0 million of share-based compensation, $1.1 million of amortization of deferred financing costs, $1.2 million of loss on disposal of property, plant and equipment, and $0.7 million of change in operating lease right of use asset.

Previous wording

•a $26.2 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the changes in accrued expenses, accounts receivable, inventories, and other assets, partially offset by the change in accounts payable and prepaid expenses and other current assets.

Current wording

•a $36.9 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the changes in accrued expenses, inventories, accounts receivable, prepaid expenses and other current assets, and other assets, partially offset by the change in accounts payable.

Previous wording

Net cash provided by investing activities of $67.9 million for the three months ended March 31, 2026 was primarily attributed to:

Current wording

Net cash provided by investing activities of $42.7 million for the six months ended June 30, 2026 was primarily attributed to:

Previous wording

•$95.5 million of cash proceeds from the sale of our equity investment.

Current wording

•$100.0 million of cash proceeds from the sale of our equity investment.

Previous wording

•$27.6 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Current wording

•$57.3 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Previous wording

Net cash used in investing activities of $26.5 million for the three months ended March 31, 2025 was primarily attributed to:

Current wording

Net cash used in investing activities of $59.9 million for the six months ended June 30, 2025 was primarily attributed to:

Previous wording

•$26.5 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Current wording

•$59.9 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

Previous wording

•$4.5 million for tax withholdings related to net share settlements of restricted stock units; and

Current wording

•$4.6 million for tax withholdings related to net share settlements of restricted stock units; and

Previous wording

•$0.5 million for principal payments under finance lease obligations.

Current wording

•$1.6 million for principal payments under finance lease obligations.

Previous wording

•$0.7 million cash proceeds from the exercise of stock options.

Current wording

•$6.0 million cash proceeds from the exercise of stock options.