Flow Beverage Corp. Reports Q1 2025 Financial Results

• Consolidated net revenue was $11.4 million in Q1 2025, a 38% increase from Q1 2024
• Flow brand net revenue was $6.2 million in Q1 2025, a 5% decrease from Q1 2024
• Gross margin¹ was 21% in Q1 2025, compared to (15)% in Q1 2024
• Adjusted EBITDA² loss was $2.6 million in Q1 2025, compared to an Adjusted EBITDA² loss of $9.7 million in Q1 2024

TORONTO--(BUSINESS WIRE)-- Flow Beverage Corp. (TSX:FLOW; OTCQX:FLWBF) (“Flow” or the “Company”) today announced its financial results for the fiscal quarter ended January 31, 2025 (“Q1 2025”). All currency amounts are stated in Canadian dollars unless otherwise noted.

Management Commentary

“Flow continues to make strides against its strategic growth priorities and achieving its financial goals with a $7.1 million improvement in Adjusted EBITDA² compared with the prior year. In Q1 2025, a 216% increase in co-pack revenue drove our 38% increase in net revenue, while Flow brand net revenue continued to close the gap on prior year results which included unprofitable contracts that have since been exited. Gross margin of 21% is a significant improvement from last year, but remains well below our potential as we absorb the cost of full capacity at the Aurora production facility while we worked through our challenges scaling production in the period. Our operating expenses have stabilized and we believe we have created the foundation for continued improvements in profitability, particularly in the second half of fiscal 2025,” said Nicholas Reichenbach, Founder and Chief Executive Officer of Flow.

Trent MacDonald, Chief Financial Officer and EVP of Operations, added, “In Q1 2025, Flow continued to focus on scaling towards full capacity utilization at the Aurora production facility, and this resulted in unfulfilled demand for Flow brand product and gross margin below our potential. We are making operational improvements day-by-day and see a path to sequential improvements in profitability over the course of fiscal 2025 reflecting our focus on profitable channels, a strong base of co-pack agreements and a much leaner operating structure.”

Financial Results for Q1 2025

Flow brand net revenue was $6.2 million in Q1 2025, a 5% decrease from $6.6 million in Q1 2024. Flow brand net revenue decreased due to the exit of commercial partnerships with retail and food service partners to meet the Company’s profitability targets and temporary disruptions to production leading to unfulfilled demand for Flow brand products.

Consolidated net revenue was $11.4 million in Q1 2025, a 38% increase from $8.3 million in Q1 2024. Offsetting the decrease in Flow brand net revenue, co-pack revenue increased 216% in Q1 2025, which is attributable to recently signed co-pack contracts and higher volumes under existing contracts.

Gross margin¹ was 21% in Q1 2025, as compared to (15)% in Q1 2024. The improvement in gross margin¹ reflects the consolidation of production to the Aurora production facility, improved utilization at the Aurora production facility, contribution from co-pack revenue, and a focus on higher margin channels for the Flow brand.

Flow reported an EBITDA² loss of $4.6 million in Q1 2025, as compared to an EBITDA¹ loss of $10.9 million in Q1 2024. The improvement in EBITDA² loss relative to Q1 2024 reflects the factors impacting gross margin¹ improvement, a 70% decrease in sales and marketing expense attributable to a one-time marketing rebate, and a 50% decrease in general and administrative expenses with the substantive completion of the Company’s operational transformation. Salaries and benefits increased 15% as compared to the prior year due to added personnel in the U.S. sales function.

Flow reported an Adjusted EBITDA² loss of $2.6 million in Q1 2025, as compared to a loss of $9.7 million in Q1 2024. The Adjusted EBITDA² loss is attributable to the same factors that impact EBITDA² loss, removing stock-based compensation and restructuring charges.

In thousands of Canadian dollars, except percentage amounts	Three months ended January 31
	2025	2024
Net revenue	11,438	8,268
Cost of revenue	9,012	9,525
Gross profit	2,426	(1,258)
Operating expenses	6,911	11,840
Finance expense, net	2,920	2,675
Restructuring and other costs	221	97
Net loss for the period	(8,406)	(15,365)
EBITDA2 loss	(4,566)	(10,896)
Adjusted EBITDA2 loss	(2,559)	(9,715)
Adjusted net loss	(6,759)	(14,277)
Gross margin1	21%	(15%)

In thousands of Canadian dollars, except percentage amounts	Three months ended January 31
		2025		2024
Consolidated net loss:	$	(8,406	)	(15,365	)
Finance expense, net		2,920		2,675
Amortization and depreciation		920		1,794
EBITDA2 loss		(4,566	)	(10,896	)
Share-based compensation		1,000		1,542
Restructuring and other costs		221		97
Foreign exchange loss		360		93
Loss (gain) on option revaluation		(11	)	25
Loss (gain) on debt modification and other		437		(576	)
Adjusted EBITDA2 loss	$	(2,559	)	(9,715	)
(1) Gross margin is a supplementary financial measure and is used throughout this MD&A. See “Non-IFRS and Other Financial Measures” for more information on the supplementary of financial measure. See “How We Assess the Performance of Our Business” for an explanation of the composition of such measure.
(2) This is a non-IFRS financial measure and is used throughout this MD&A. See “Non-IFRS and Other Financial Measures” for more information on each non-IFRS financial measure. See “How We Assess the Performance of Our Business” for an explanation of the composition of such measure.

Conference Call and Webcast Details
Date:				March 18, 2025
Time:				8:30 a.m. ET
Conference ID:				84315
Dial-in:				(289) 514-5100 or (800) 717-1738
Webcast:				Link
Replay:				(289) 819-1325 or (888) 660-6264
				Passcode: 84315
				Available until April 18, 2025

About Flow

Flow is one of the fastest-growing premium water companies in North America. Founded in 2014, Flow’s mission since day one has been to reduce environmental impacts by providing sustainably sourced natural mineral spring water in the most sustainable product formats. Today, the brand is B-Corp Certified with a best-in-class score of 114.6, offering a diversified line of health and wellness-oriented beverage products: original mineral spring water, award-winning organic flavours and sparkling mineral spring water in sizes ranging from 300-ml to 1-litre. All products contain naturally occurring electrolytes and essential minerals and support Flow’s overarching purpose to “bring wellness to the world through the positive power of water.” Flow beverage products are available at retailers in Canada and the United States, and online at flowhydration.com.

For more information on Flow, please visit Flow’s investor relations site at: investors.flowhydration.com.

Forward-Looking Statements

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (“Forward-Looking Statements”). The Forward-Looking Statements contained in this press release relate to future events or Flow’s future plans, operations, strategy, performance or financial position and are based on Flow’s current expectations, estimates, projections, beliefs and assumptions, including, among other things, growth of Flow brand both for existing SKUs in Tetra format and through the Company’s launch of sparkling water in aluminum format, the scaling of the Company’s co-pack operation with a full year of running four production lines and installation and commissioning of two additional production from lines beginning in the second half of fiscal FY 2025, a higher capacity utilization and gaining production efficiencies at the Aurora production facility, gross margins reflective of profitable channels for Flow brand net revenue, accretive co-pack contracts and improved production performance and Flow’s ability to implement its growth strategy with continued discipline in operating expenses.

Such Forward-Looking Statements have been made by Flow in light of the information available to it at the time the statements were made and reflect its experience and perception of historical trends. All statements and information other than historical fact may be forward‐looking statements. Such Forward‐Looking Statements are often, but not always, identified by the use of words such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “expect”, “believe”, “anticipate”, “estimate”, “will”, “potential”, “proposed” and other similar words and expressions.

Although Flow believes that the assumptions underlying Forward-Looking Statements are reasonable, they may prove to be incorrect. Forward-Looking Statements are based on certain expectations and assumptions and are subject to known and unknown risks and uncertainties and other factors, many of which are beyond Flow’s control, that could cause actual events, results, performance and achievements to differ materially from those anticipated in these Forward-Looking Statements, those risks including but not being limited to access to working capital, achieving production efficiency targets, delays in obtaining the necessary capacity at the Aurora production facility, and counter-party risk in relation to co-pack partners. Forward-Looking Statements are provided for the purpose of assisting the reader in understanding Flow and its business, operations, prospects, and risks at a point in time in the context of historical and possible future developments, and the reader is therefore cautioned that such information may not be appropriate for other purposes. Forward-Looking Statements should not be read as guarantees of future performance or results. Readers are cautioned not to place undue reliance on these Forward-Looking Statements, which speak only as of the date of this press release. Unless otherwise noted or the context otherwise indicates, the Forward-Looking Statements contained herein are provided as of the date hereof, and the Company disclaims any intention or obligation, except to the extent required by law, to update or revise any Forward-Looking Statements as a result of new information or future events, or for any other reason.

The following press release should be read in conjunction with the management’s discussion and analysis and unaudited condensed consolidated interim financial statements and notes thereto as at and for the three months ended January 31, 2025. Additional information about Flow is available on the Company’s profile on SEDAR+ at www.sedar.com, including the Company’s Annual Information Form for the year ended October 31, 2024 dated January 29, 2025.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250318532090/en/

Trent MacDonald, Chief Financial Officer

1-844-356-9426

investors@flowhydration.com

Investors:

Marc Charbin

investors@flowhydration.com

Media:

Natasha Koifman

nk@nkpr.net

Source: Flow Beverage Corp.