Jones Soda Q1 Loss Narrows Y/Y, Expenses Reduce, Revenues Fall 7.8%

Shares of Jones Soda Co. JSDA have declined 7% since reporting results for the first quarter of 2025. This compares unfavorably with the S&P 500 index’s 0.3% rise over the same time frame. Over the past month, JSDA shares have fallen 4.7%, while the broader index has jumped 10.3%, reflecting investor caution despite the company’s internal restructuring and turnaround efforts.Revenue & Earnings PerformanceJones Soda posted revenues of $4.6 million for the quarter ended March 31, 2025, down 7.8% from $5 million in the year-ago period. The decline was primarily due to the absence of a one-time pipeline fill that boosted the prior-year results. The beverages segment contributed $4.2 million to revenues compared with $4.6 million in the same quarter last year. Meanwhile, revenues from the Cannabis (THC) segment were unchanged year over year at $0.4 million.Despite the revenue dip, the company narrowed its net loss to $0.9 million, or 1 cent per share, from a net loss of $1.2 million, or 1 cent per share, a year ago. The adjusted EBITDA loss improved 39% to $0.6 million from $1 million, driven largely by reduced operating expenses and enhanced cost discipline.Jones Soda Co. Price, Consensus and EPS Surprise  Jones Soda Co. price-consensus-eps-surprise-chart | Jones Soda Co. QuoteOther Key Business MetricsGross profit for the quarter declined to $1.7 million from $1.9 million, reflecting a 9.2% drop in line with lower sales. However, the gross margin held relatively steady at 37.3% versus 37.8% a year earlier. Selling and marketing expenses declined 20% to $1.2 million, and general and administrative expenses dropped 22%, contributing to the improved adjusted EBITDA.Sales of the company’s hemp-derived HD9 beverages grew for the fourth straight quarter, generating $0.9 million in revenues, highlighting growing consumer traction in this product line.Management CommentaryCEO Scott Harvey characterized the quarter as the beginning of a strategic turnaround for the company, with early signs of operational improvement. Harvey noted the leadership transition in February and emphasized new cost controls, supply-chain optimizations and P&L discipline that have begun to show results. “These early actions reflect our commitment to operational rigor and set the stage for continued momentum in the quarters ahead,” he said.Harvey also pointed to a sharpened focus on ROI-driven decision-making and more efficient allocation of resources across core soda, modern soda and adult beverage categories. The company aims to scale the business without compromising brand equity.Factors Influencing ResultsThe revenue decline was largely attributed to an atypical pipeline fill in early 2024 that was not replicated in the current period. This non-recurring boost made year-over-year comparisons less favorable despite underlying progress in product expansion. Management also cited increased trade spend and promotional allowances, which surged 75% year over year to $0.7 million due to timing around incentive programs.On the cost side, operating expenses were sharply reduced, thanks to tightened marketing budgets and lower administrative overhead, underscoring management’s focus on operational discipline.Guidance & OutlookManagement highlighted ongoing cost optimization and product expansion initiatives as key elements of its go-forward strategy. Plans include launching additional zero-calorie soda offerings, namely Jones Zero Root Beer and Zero Dr. Jones, later this year.The company is evaluating strategic alternatives for its Cannabis THC segment, suggesting a possible restructuring or repositioning of that part of the business.Other DevelopmentsIn the quarter, Jones Soda completed several notable corporate actions aimed at bolstering its financial flexibility. In February, the company secured a $5-million revolving credit facility to support sales and expansion initiatives. In early May, it followed up with a $450,000 loan from its board chairman, carrying a 12% interest rate and due by October 2025.Leadership changes were another focal point. The company named Scott Harvey as CEO and Brian Meadows as CFO. Both of them bring experience aimed at guiding the company through its strategic overhaul.While the first-quarter results reflect the challenges of comping against an unusually strong prior-year quarter, Jones Soda’s cost-cutting success and HD9 growth offer some encouraging signs. Whether these efforts will be sufficient to reverse the broader investor sentiment remains to be seen, particularly as the company looks to stabilize its cannabis operations and generate more consistent top-line growth.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. 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