Gold prices hit 2-week high as Trump-Fed feud escalates with Cook firing
Introduction & Market Context
Flow Beverage Corp (TSX:FLOW) (OTCQX:FLWBF) presented its Q2 2025 investor update on June 17, highlighting the company’s ongoing transformation efforts and progress toward profitability. The premium alkaline water company, founded in 2014, continues to position itself as a sustainable alternative in the competitive bottled water market with its naturally mineral-rich spring water products.
The presentation comes as Flow’s stock trades near the lower end of its 52-week range, currently at $0.07, down 12.5% from its previous close and significantly below its 52-week high of $0.22. Despite these market challenges, the company emphasized its improved operational efficiency and reduced losses.
As shown in the company overview slide, Flow maintains a significant retail presence with distribution in over 80,000 retail doors across North America, including major chains like Whole Foods, Sprouts, Costco (NASDAQ:COST), and Loblaws:
Quarterly Performance Highlights
For the three months ended April 30, 2025 (Q2), Flow reported mixed financial results. Net revenue decreased to $10.0 million from $12.1 million in the same period last year, representing a 17.4% year-over-year decline. Gross profit also fell to $2.3 million from $3.3 million, with gross margin contracting to 23% from 28% in Q2 2024.
Despite the revenue challenges, the company made progress on cost control, with sales and marketing expenses significantly reduced to $0.4 million from $1.6 million in the prior year. General and administrative expenses remained flat at $2.9 million, while share-based compensation decreased to zero from $0.5 million.
The cost-cutting measures helped Flow improve its adjusted EBITDA loss to $3.0 million, compared to $3.5 million in Q2 2024, continuing the company’s trend of narrowing losses:
Strategic Initiatives
Flow’s presentation highlighted several key strategic initiatives aimed at driving growth and improving profitability. The company announced the upcoming launch of Flow Sparkling Mineral Water, with the first production run expected in July 2025. The new product line will be available in four flavors and uses sustainable aluminum packaging with 70% recycled content.
The company’s Planet A Co-packing Solutions business represents another growth avenue. Flow reported that Tetra Pak Line 4 is running at full capacity, while Tetra Pak Line 5 was delivered in May 2025, with installation to be completed in Q3 and commissioning set for Q4 2025. This expansion will increase production capacity and support additional co-packing contracts.
Flow also secured significant new financing, raising $14.3 million year-to-date through a combination of private placement ($2.3 million) and secured loans ($12 million). The funds will be used for working capital to meet demand for both the Flow brand and the Planet A co-packing business.
Detailed Financial Analysis
Looking at longer-term trends, Flow’s financial performance shows a company in transition. While revenue has remained relatively flat over the past few years ($42.8M in FY21, $47.1M in FY22, $46.7M in FY23, $45.9M in FY24, and $47.0M TTM), the company has made significant progress in reducing expenses and improving profitability metrics.
The following chart illustrates Flow’s revenue and gross margin trends over the past several years:
More impressive has been the company’s ability to reduce operating expenses. SG&A and salary expenses have decreased from $41.4 million in FY21 to $24.5 million on a trailing twelve-month basis, representing a 41% reduction. This has contributed to a substantial improvement in adjusted EBITDA loss, which has narrowed from -$27.2 million in FY21 to -$11.6 million TTM:
Flow’s differentiation in the market continues to be centered around its mineral content and sustainability credentials. The company highlights that its water contains 319 parts per million of minerals and 425mg/L of electrolytes, approximately three times the amount of its nearest competitor. With a pH of 8.1, Flow emphasizes the superior hydration and taste benefits of its naturally alkaline water:
The company also maintains strong environmental, social, and governance (ESG) credentials, with a B Corp certification since 2017 and an industry-leading score of 114.6, which Flow claims is the highest in the water industry:
Forward-Looking Statements
Flow outlined its strategic priorities and path to profitability, focusing on three key areas: Flow brand growth, Planet A co-packing business expansion, and continued financial improvements.
For the Flow brand, the company plans to expand into conventional grocery, launch Flow Sparkling Mineral Water in Canada followed by a U.S. launch in early Fiscal 2026, develop food service partnerships, and optimize e-commerce channels including Amazon (NASDAQ:AMZN) Vendor Central.
The Planet A business will focus on commissioning Line 5, ramping up co-pack partners, and adding infrastructure to support contracts. Financial improvements will continue to focus on optimization benefits, maintaining operating expense levels, and stabilizing working capital.
The company also announced the appointment of Paul Dowdall as its new CFO. Dowdall brings over 25 years of experience, including extensive operational experience in the beverage industry and previous public company experience.
While Flow continues to make progress on its transformation journey, the company still faces challenges in generating consistent revenue growth and achieving profitability. The Q2 2025 results demonstrate that while cost-cutting measures are yielding improvements in adjusted EBITDA, the company needs to address the recent revenue decline to ensure long-term sustainability.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.