Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF), a premium water company based in North America, reported a significant increase in revenue for the first quarter of fiscal year 2025. The company saw its consolidated net revenue jump 38% to $11.4 million compared to the same period last year.
The impressive growth was primarily fueled by a 216% increase in co-packing revenue, which offset a slight decline in Flow brand net revenue. This surge in co-packing business is attributed to recently signed contracts and higher volumes from existing agreements.
Despite the overall revenue increase, Flow brand net revenue experienced a 5% decrease to $6.2 million. The company attributes this decline to the strategic exit from unprofitable commercial partnerships and temporary production disruptions that led to unfulfilled demand for Flow brand products.
Nicholas Reichenbach, Founder and CEO of Flow, commented on the results: “We’ve made significant progress towards our strategic growth priorities and financial goals. The substantial increase in co-pack revenue drove our overall revenue growth, while we continued to optimize our Flow brand business.”
The company reported a gross margin of 21% for Q1 2025, a marked improvement from the negative 15% margin in the same quarter last year. This positive shift reflects the consolidation of production at the Aurora facility, improved utilization, and a focus on higher-margin channels for the Flow brand.
Flow’s EBITDA loss narrowed to $4.6 million, compared to a $10.9 million loss in Q1 2024. The company cited several factors for this improvement, including better gross margins, a 70% decrease in sales and marketing expenses due to a one-time marketing rebate, and a 50% reduction in general and administrative expenses following the completion of an operational transformation.
Trent MacDonald, CFO and EVP of Operations, highlighted ongoing efforts to improve profitability: “We’re focusing on scaling towards full capacity utilization at our Aurora production facility. While this resulted in some unfulfilled demand for Flow brand products and impacted our gross margin, we’re making daily operational improvements and see a path to sequential profitability improvements throughout fiscal 2025.”
The company reported an Adjusted EBITDA loss of $2.6 million, a significant improvement from the $9.7 million loss in the prior year’s quarter. This metric excludes stock-based compensation and restructuring charges.
Looking ahead, Flow’s management expressed confidence in the company’s positioning for continued growth and profitability improvements, particularly in the second half of fiscal 2025. The company’s strategy focuses on profitable channels, leveraging its strong base of co-packing agreements, and maintaining a leaner operating structure.
As a B-Corp certified company with a focus on sustainability, Flow continues to align its business growth with its mission to reduce environmental impacts through sustainably sourced natural mineral spring water in eco-friendly packaging.
