Earnings call transcript: Guru Organic Energy’s Q3 2025 profit beats expectations

Guru Organic Energy Corp (GURU), with a market capitalization of $54.3 million, reported its first profitable quarter in Q3 2025, exceeding market expectations with a net income of $1.3 million. The company achieved a record net revenue of $10.4 million, marking a 32% year-over-year increase. Guru’s earnings per share (EPS) of $0.04 surpassed the forecasted -$0.045, resulting in a significant upside surprise. Following the announcement, Guru’s stock price rose by 11.03%, closing at $3.22. According to InvestingPro, the company maintains an excellent financial health score of 3.78, suggesting strong operational fundamentals.

Key Takeaways

• Guru reported its first profitable quarter with a net income of $1.3 million.
• Revenue increased by 32% year-over-year, reaching $10.4 million.
• EPS of $0.04 exceeded the forecasted -$0.045 by a significant margin.
• Stock price surged by 11.03% following the earnings announcement.
• Strong performance attributed to product innovation and distribution expansion.

Company Performance

Guru Organic Energy demonstrated robust performance in Q3 2025, driven by significant revenue growth and profitability. The company’s strategic focus on product innovation and expansion into new markets has paid off, as evidenced by its first profitable quarter. Guru’s emphasis on natural ingredients and zero sugar products continues to differentiate it in the growing energy drink market.

Financial Highlights

• Revenue: $10.4 million, up 32% year-over-year
• Earnings per share: $0.04, compared to a forecast of -$0.045
• Gross margin: 71.3%, improved from 55.4% last year
• Cash reserves: $24.2 million with no debt

Earnings vs. Forecast

Guru’s actual EPS of $0.04 significantly surpassed the forecasted -$0.045, resulting in a surprise of 188.89%. This marks a notable achievement for the company, as it transitions to profitability. The revenue of $10.4 million also exceeded expectations by 24.14%, highlighting the company’s strong market position and successful product launches.

Market Reaction

Following the earnings announcement, Guru’s stock price increased by 11.03%, closing at $3.22. This surge reflects investor confidence in the company’s ability to maintain profitability and sustain growth. The stock’s performance is notable as it trades just 1% below its 52-week high of $59.24, demonstrating strong market sentiment. InvestingPro data shows impressive returns across multiple timeframes, with a 22.64% gain over the past six months and a 31.7% return over the last year. Investors seeking deeper insights can access 12 additional ProTips and comprehensive analysis through InvestingPro’s detailed research reports.

Outlook & Guidance

Looking forward, Guru plans to continue its focus on innovation and market expansion. The company aims for consistent quarterly profitability and is poised to invest in targeted sales and marketing efforts. With its strong cash position and no debt, Guru has the flexibility to capitalize on growth opportunities in the U.S. and Canadian markets.

Executive Commentary

CEO Carl Goyette stated, "Q3 2025 was a record-breaking quarter for GURU Organic Energy," emphasizing the company’s achievement of profitability. He also noted, "Profitability is now within reach every quarter," highlighting the company’s strategic positioning and growth potential.

Risks and Challenges

• Supply chain disruptions could impact product availability and distribution.
• Increased competition in the energy drink market may pressure margins.
• Economic downturns could affect consumer spending on premium products.
• Regulatory changes in key markets could pose challenges to growth.

Q&A

During the earnings call, analysts inquired about the sustainability of Guru’s profitability and the impact of seasonal marketing investments. The company confirmed that its gross margin is expected to range between 62-67%, and it plans to continue investing in marketing efforts to drive growth in the coming quarters.

Full transcript - Guru Organic Energy Corp (GURU) Q3 2025:

Conference Call Operator: Welcome to the GURU Organic Energy Third Quarter 2025 Results Conference Call and Webcast being recorded today, September 11, 2025, at 10:00 A.M. Eastern Time. At this time, all participants are in listen-only mode. Following management’s presentation, there will be a question-and-answer session with financial analysts. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. GURU’s press release, MD&A, and financial statements are available in the Investor section of its website and on CDAR Plus. During the call, the company may refer to certain non-GAAP measures. Reconciliations are available in its MD&A. Also, note that all financial figures are expressed in Canadian dollars unless otherwise indicated.

I would also like to remind you that today’s presentation may contain forward-looking statements about GURU’s current and future plans, expectations, and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. Please take a moment to read the disclaimer on forward-looking statements on slide 2 of the presentation. I will now turn the call over to Carl Goyette, GURU’s Chief Executive Officer. Please go ahead.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Thank you, Operator. Bonjour à tous, good morning everyone, and welcome to GURU Organic Energy’s fiscal 2025 third quarter results conference call. Joining me this morning is our CFO, Angie Saraf. Let’s turn to slide 5. Q3 2025 was a record-breaking quarter for GURU Organic Energy, from top line to bottom line. We are very proud of GURU Organic Energy’s team accomplishments in 2025. Through their hard work and dedication, we achieved these results much earlier than expected. Since taking full control of our Canadian distribution activities last quarter, we generated record net revenues of $10.4 million, a 32% increase versus last year. Gross margin was 71.3%, reflecting the benefits of our new business model and a one-time change in estimate related to the termination of our Canadian distribution agreement. Excluding this adjustment, gross margin was 65.9%, up from 55.4% last year.

For the first time since going public in 2020, we achieved profitability with a quarterly net income of $1.3 million, the highest in our history. Turning to slide 6, these results demonstrate that our model can deliver sustainable profitability while we continue to invest in growth. Our key drivers this quarter included strong execution of our Canadian distribution transition, positive momentum in the U.S., successful launches of our zero-sugar innovations, and operational discipline across SG&A and the supply chain. Turning to slide 7. In Canada, Q3 marked the successful execution of our transition back to a direct distribution model. By July, we had partnered with 27 distributors nationwide. Strong in-store activations and displays contributed to record sales in July. Innovation launches, including Zero Ruby Red, Ice Pop, and Strawberry Watermelon, supported increased consumer demand.

This transition provides GURU Organic Energy with a closer relationship with retailers, stronger execution, and greater agility moving forward. Turning to slide 8, the U.S. remains a very solid growth engine. Q3 sales increased 16.4% year over year to $1.8 million. Amazon had its best month ever in July, with Prime Day sales up 96% in the U.S. compared to 2024 and up 40% in Canada. Consumer metrics were also positive, with record total customer count and a significant bump in new-to-brand consumers. Innovation is gaining traction. Zero Wild Berry at Whole Foods is showing strong early velocity and is on track to become our number one SKU at that banner. These results validate the U.S. strategy of focusing on innovation, velocity, loyalty, and online strength. We also refreshed our brand identity, and it’s resonating with consumers. This brand direction reinforces GURU’s positioning and generates significant awareness and engagement.

The Strawberry Watermelon campaign achieved engagement rates more than three times above industry benchmarks. These activations translated into record Amazon sales, subscriber growth, and gains in new-to-brand customers. Turning to slide 9, behind the scenes, our supply chain team performed flawlessly. We scaled our operations to support the transition of our Canadian distribution while maintaining a 99.5% fill rate. We launched Strawberry Watermelon on time and in full, demonstrating the resilience, agility, and scalability of our operations during a major transition. Turning to slide 10. Looking ahead, in Q4, we successfully launched Island Breeze Punch in Quebec and online across North America. We also rolled out the 18-pack zero variety pack in Costco. Early sell-through has exceeded expectations with replenishment orders already placed. These successes, combined with the U.S. expansion, direct distribution in Canada, and continued brand activation, position us for sustained growth momentum.

Importantly, Q3 results demonstrate GURU’s ability to deliver profitability through disciplined execution while investing in innovation and capturing the significant white space opportunity in the Better for You energy drink category. Profitability is now within reach every quarter, unless we choose to invest to accelerate growth through targeted sales and marketing investments. That flexibility is our strength, considering our strong financial position with over $24 million in cash and no debt. I will now turn over the call to Angie, our CFO, to discuss our financial results in more details. Angie, over to you.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Thank you, Carl, and good morning, everyone. Turning to slide 12. Here are the highlights of our financial performance in Q3. Let’s start with our record revenue. Net revenue was $10.4 million, the highest in our history, and up 32% year over year. This growth was driven by strong performance in Canada, innovative product launches, and the replenishment of retailer pipelines following the end of our former exclusive distribution agreement. These results also include the one-time change in estimate related to the termination of this agreement. For the nine-month period, net revenue was $24.6 million, up 6.7% or 13.5% when excluding last year’s U.S. club rotation. Next, our record margin. Gross profit reached $7.4 million with a gross margin of 71.3%. Excluding the one-time adjustment, the underlying margin was 65.9% compared to 55.4% last year. Regarding expenses, SG&A was $6.3 million, down 9% from last year.

Sales and marketing investments decreased by 16% as we continue to optimize our spend. Turning to profitability, net income was $1.3 million or $0.04 per share, a significant improvement over the $2.2 million loss reported last year, representing a net margin of 12.4%. Additionally, adjusted EBITDA reached $1.6 million in Q3, compared to a $1.5 million loss last year, reflecting revenue growth, margin expansion, including the change in estimates and cost discipline. On a year-to-year basis, net loss improved 79% to $1.4 million, and adjusted EBITDA loss improved 90% to $0.7 million in the last nine months. Finally, cash on liquidity remained strong. We ended the quarter with $24.2 million in cash and short-term investments, no debt, and $10 million in unused credit facilities, providing the flexibility to balance profitability with growth investments. With that, I’ll now turn the call back over to Carl for closing remarks.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Thanks, Angie. Let’s turn to slide 14. Q3 2025 was a defining quarter for GURU Organic Energy. During the quarter, we flawlessly executed a complex Canadian distribution transition, and we are now building strong momentum in the U.S., online, and through innovation. In addition, we delivered record revenue, record gross margin, and our first profitable quarter as a public company. Proof that our model can generate substantial earnings while providing the flexibility to invest in growth whenever we choose. Above all, we now call all the shots. We are now better positioned than ever with a refreshed brand identity, a winning zero-sugar line, a new strong Canadian distribution model, growing U.S. and online traction, and a robust financial position. This quarter proves our ability to achieve profitability while investing in growth.

With expanding margins, energized partners, and strong innovation tractions, we have full confidence in our strategy and our ability to scale GURU Organic Energy in this growing category. Merci, thank you. Operator, we will now open the call to questions.

Conference Call Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question is from Martin Landry with Stifel. Please go ahead.

Martin Landry, Financial Analyst, Stifel: Hi, good morning, Carl and Angie.

Conference Call Operator: Good morning.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Good morning, Martin.

Martin Landry, Financial Analyst, Stifel: Congrats on your results, impressive revenue growth, very, very strong. That’s probably where I’d like to start with my questions. Obviously, you know, at 30%, 31% revenue growth, there was a little bit of channel fill in there because I know you were out of stock starting. You had some out-of-stock positions starting the quarter. How can we look at your revenues in Canada and maybe normalizing for the channel fill? Is there any way you can help us out a little bit? I know it’s hard to quantify, but is there any way you can help us out maybe understand what the proportion of the revenues were, what you consider channel fill?

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Yes, for sure. We did have, of course, some channel fill, like you mentioned, but we also had some returns from our exclusive distributors since it was the end of the agreement. All in all, we took back a similar amount that we sold in, so it nets out.

Martin Landry, Financial Analyst, Stifel: Okay, your pricing has changed as well, right? We’re not comparing apples to apples when we look at pricing this year versus next year. Of the revenue growth, what was the impact of the new pricing structure? Is that possible to parcel that out?

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Yeah, there is for sure a proportion that’s due to the new pricing structure, like you mentioned. I think I’d like to look at it from a gross margin standpoint. If we look at gross margin, when we look at, like we said, the 65.9%, the recurrent margin versus last year’s at the same period, 55.4%, when you look at that, the difference between both, you could say that two-thirds of it is due to the change in business model. One-third is really due to our optimization in pricing, the timing of our promotional periods. That’s the way I like to view it. Does that help you?

Martin Landry, Financial Analyst, Stifel: Yeah. Okay. We’ll back it out into dollars offline. That’s good. If we look on a go-forward basis, Carl, your distribution transition is completed. Trying to understand a little bit, what’s your reach right now in Canada and how does it compare versus previously? I assume you may have locked a couple of doors, but some of them may be insignificant in terms of volume. Could you talk a little bit about all your all-commodity volume, all-commodity value right now versus last year?

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Yes, of course. If you look at Canada from a Quebec perspective, where we’re from and where we’re very strong, I would say we’re pretty much back to the same, just to the same level of ACV. In the rest of Canada, English Canada, we’re still rebuilding that. I don’t have the exact number top of mind, but clearly, we did lose a few banners in this transition, some of which we’re going to regain. We also lost some stores, lost some SKU. I would say that from a Quebec perspective, for example, when I look at scan data in Quebec, the scan data last month in August in convenience stores was roughly equal to last year. It means we’ve completely recovered from the impact of the transition that we mentioned in our Q2 call. From a grocery channel point of view, it’s not a store count impact, right?

There is, we lost a few stores in the transition, but we gained them back. We still are working on assortment. We’re still working on shelf space and reducing some of the out-of-stocks that we’re seeing. It seems like the transition in the grocery channel is taking a little bit more work because this channel is a little bit more complex. We need to retrain the staff on making sure they take the orders, adjusting inventory. Long answer, Martin, but it’s not the same everywhere, right? I would say. The short answer is in Quebec, we’re pretty much back to where the same levels of distribution, while in the rest of Canada, there isn’t. As you mentioned, these were not the most productive doors.

They were lower velocity doors, and they were not our first focus, obviously, on this over the course of the next few weeks to recover on, especially on the most productive doors that we had.

Martin Landry, Financial Analyst, Stifel: Maybe just last question. I don’t know if, did you, were you talking about this Canada for August? Did I hear you correctly?

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Yeah.

Martin Landry, Financial Analyst, Stifel: Okay. So post-quarter end, right?

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Yeah, post-quarter end. Yes, because remember in Q2, we spoke about the impact of the transition leading up to the, there were significant out-of-stocks before the end of the distribution agreement, right? We both, Pack and Scan, we were transparent in that. We are actually happy to report that we’ve almost completely recovered from that, right? We have outstanding momentum with Costco, which is not tracked, as you know, right? This is not something that’s visible in the track channel, but our zero line right now is performing extremely well, and we’re very excited, very excited about that. This is something that’s driving momentum in the business.

Martin Landry, Financial Analyst, Stifel: Okay. Fair to say that the momentum is continuing in August and early September.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Oh yeah, there is real momentum in the business right now.

Martin Landry, Financial Analyst, Stifel: Great. Congrats and best of luck.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Thank you.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Thank you.

Conference Call Operator: The next question is from Sean McGowan with ROTH Capital Partners. Please go ahead.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Thank you, and good morning, Carl and Angie.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Good morning, Sean.

Sean McGowan, Financial Analyst, ROTH Capital Partners: I want to follow up on.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Good morning, Sean.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Good morning. I want to follow up on a couple of Mark Towne’s questions on the sustainability and one, you know, unusual factors going in here. Could I ask you to repeat, Angie, the two-thirds, one-third? What was the one-third due to?

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Yeah. When I look at my gross margin differential between the same period last year and this year, the 65.9% versus last year’s 55.4%, if I had to explain that 10-point gap, I would say that one-third is due to our pricing and the timing of promotional activities, and two-thirds is really due to the change in business model in Canada.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Okay, I guess that raises the question of what should we expect to be kind of a sustainable ongoing level, particularly in the light of pricing pressure maybe from some input costs, etc. I mean, is 65% plus kind of the new base level, or are there some potential pullbacks from that?

Angie Saraf, Chief Financial Officer, GURU Organic Energy: I would talk about a range. Looking at our past life, right, pre the distribution agreement, we always ranged between the 62% to 63% to the 67% mark. I’d say that it is within that range.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Okay. That’s super helpful. Just to clarify the comment that you gave to Mark Towne’s question, are you saying that the channel fill effect was neutralized by the returns? There really is no net revenue impact of, you know, replenishment, and that this really represents, you know, kind of this 31% or 35% in Canada, really represents, you know, real demand?

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Yes, that’s what I’m saying. Because of these two items, yes. Other than that, like we mentioned, there was the one-time adjustment with the exit of this agreement. There was a one-time cleanup there, and that’s the impact on the gross margin that I mentioned.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Okay. A couple of other cost questions. The sales and marketing was lower than I would have thought. Do you think that this either in dollars or as a percentage of revenue, is this kind of a normal level of sales and marketing spend?

Carl Goyette, Chief Executive Officer, GURU Organic Energy: I would say, Sean, this will modulate. Obviously, this will modulate depending on every quarter. I think what we’re very clear is that there is momentum in the business, and there’s significant opportunities ahead of us. We’re in a strong financial position. We will vary this depending on the quarter. For example, in Q4, I just spoke about the momentum we have in Costco. We want to invest behind that to maintain that success. We just launched a very successful product, the Island Breeze Punch. There is activation. There is media. There’s aggressive promos that go against this. We will be aggressive in some promos, both in the U.S. and Canada this fall because fall for us is an important season, especially with our strength with students and university campuses. It’s hard for us to look and give you a clear guidance.

Obviously, we want to make sure that profitability is always in sight. Whenever we invest more, I think what we can commit is to give you full transparency on what we’re going to be investing on and what opportunities we’re tackling on, right? Obviously, this is where the money we have in the bank, this is where we want to invest, right? We want to invest in sales and marketing to go aggressively against growth. Yeah, we’re in 2020 finalizing the 2026 plans right now. We still intend to be very aggressive and pursue growth as much as possible.

Sean McGowan, Financial Analyst, ROTH Capital Partners: I’m just trying to adjust to life without parentheses around the operating income numbers.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Absolutely. We’re trying to adjust to that as well without losing any growth opportunities.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Maybe I shouldn’t put them in cold storage forever, but you know, get ready to jettison them. Great. Taking a bigger picture look for a second, at least in the U.S., and I think this is true in Canada, the category over the last 12 months or 15 months or so has been kind of weird, where it got surprisingly weak, you know, kind of in the summer months, down to the point where it was actually negative, you know, for a period, at least scan data through Circana late last year, and then came roaring back this year. What’s your take on what’s going on with the category? Why did it go down and why has it come back so much?

Carl Goyette, Chief Executive Officer, GURU Organic Energy: It’s really hard to say, but there’s no doubt the category is on fire. There were a few months last year where it slowed down. I don’t know if anybody knows exactly what happened at the time. I think some experts attributed it to some lower traffic in convenience stores. That seems to have been resolved. If I look at now and what we see for the future, I think innovation is clearly driving growth. If you look at innovation and zero sugar, it’s what’s driving pretty much all of the category growth. This is driven by either perceived better-for-you or real better-for-you. There are a lot of zero sugar products. Most of the zero sugar products that are growing are full of sucralose and aspartame. Obviously, that’s our difference. We don’t use these chemicals. We use only healthy ingredients.

We think that we’re going to benefit from that movement to zero sugar because people will look for better-for-you options, real better-for-you options. Innovations, move to zero sugar, move to healthier options. There are other theories around energy being closer in price point to soda, right? The trade-off to energy is not as big as it used to be. That might explain why the category is growing so much. Retailers are just embracing, I think overall, retailers are embracing the energy drink category, especially in CNG. They’re seeing the growth. They’re giving it more space. They’re giving it more promo. They’re executing better. All this combined just creates a very big, growing, profitable category that’s ripe for disruption with better-for-you brands.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Great. Thank you. My last question is on, we haven’t heard the word tariff. Does it have any impact? You know, is there kind of a derivative negative or even a derivative positive to you guys on all this tariff nonsense? I understand it can change overnight, and it will. But you know, just talk generally about what you think the impact is, if there is any.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: The tariffs are causing some cost pressures. Thanks to the way we’ve adjusted all our sourcing and our stable freight nowadays, we’ve contained it so far. Our COGS are actually in a good position. I know that they’ve also lifted some reciprocal Canadian tariffs recently. That also helped as well on the ingredient side. We’re in good standing. If there’s more pressure in the future, you know we never know with the U.S. right now. We’re on the watch point, and we’re doing well so far.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Okay, thank you very much.

Angie Saraf, Chief Financial Officer, GURU Organic Energy: Thank you.

Sean McGowan, Financial Analyst, ROTH Capital Partners: Thank you, Sean.

Conference Call Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Carl Goyette for any closing remarks.

Carl Goyette, Chief Executive Officer, GURU Organic Energy: Thank you, Operator, and thank you, everyone, for choosing Good Energy. Have a great day.

Conference Call Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.