GURU Organic Energy Corp. (TSX: GURU) Q2 2025 Earnings Call | 06/12/2025

This is a summary of Guru Organic Energy's Second Quarter Fiscal 2025 Results Conference Call.

Q2 2025 Highlights and Transformation Journey

Guru Organic Energy's Q2 2025 marked a pivotal quarter in its transformation, focusing on taking back control of its Canadian distribution and reinforcing its path to sustainable profitability.

• Canada Direct Distribution Model: Officially launched on May 22nd, returning to a proven model that fueled earlier growth. This provides direct relationships with retailers, more agility, control, and opportunity for growth. 98% of major retailers are now secured, with a robust network of over 25 distributors and brokers, and 120+ sales professionals activated.
• Strong U.S. Growth: Sales rose by 38.9% (excluding last year's $1.4 million wholesale club rotations). Amazon US hit a new monthly sales high in March and recorded 50% growth year-to-date, with repeat purchase rates increasing to record levels. Whole Foods Market also had two record months.
• Digital Growth: Amazon Canada saw 41% growth, and Guru's website had its best month of 2025 in May with 30% year-over-year growth.
• Record Gross Margins: Reached a recent record of 59.7%, driven by pricing discipline, reductions in promotions by the exclusive distributor, and supply chain efficiencies.
• Improved Profitability Metrics: Net loss was nearly cut in half to $1.4 million (second lowest since Q2 2021). Adjusted EBITDA loss improved 55% to $1.2 million.
• Solid Cash Position: Maintained at $25.3 million with no debt, plus $10 million in unused credit facilities, providing flexibility for investments.

Product and Market Performance

• Zero Sugar Line Success: The "zero" lineup continues to perform strongly:
  • Canada: Launched two new zero sugar flavors in Q2. "Dice Pop" quickly became the top-performing Guru product in Quebec's leading convenience store chain, outpacing Guru Original. "Strawberry Watermelon" launched online and in Quebec retail stores in June.
  • U.S.: "Zero Wildberry" is already outselling last year's "Tropical Punch" launch in Whole Foods.
• Unique Selling Proposition: Guru emphasizes its position as the only organic, zero-sugar energy drink without sucralose or aspartame, offering a "better-for-you" alternative in a market dominated by artificial ingredients.
• Retail Sales Impact (Canada): Retail sales in Canada were temporarily impacted by order and shipment shortfalls ahead of the May 22nd direct distribution transition, leading to short-term product availability issues at some retailers. This is not expected to continue.

Financial Details (Q2 2025)

• Net Revenue: $6.5 million. This reflects the planned transition from the Canadian distributor and the absence of U.S. Costco rotations from the prior year.
• Gross Profit: $3.9 million, with a margin of 59.7%.
• SG&A Expenses: Dropped 26.2%, indicating cost discipline. Management believes the current dollar level of SG&A is largely sustainable, though it may increase slightly with more activity.
• Net Loss: $1.4 million.
• Adjusted EBITDA Loss: $1.2 million.

Outlook and Priorities

• Accelerated Return to Profitability: Guru is well on track to accelerate its return to profitability in the second half of the year.
• Key Priorities:
  • Drive profitable growth in the U.S. through retail, natural, and online channels.
  • Expand the zero line with upcoming Costco rotations in Q4 in both Canada and the U.S.
  • Execute the direct distribution model in Canada with excellence.
  • Maintain cost discipline and expand margins.