Jones Soda Co. Reports First Quarter 2025 Results Amid Declining Shares

Shares of Jones Soda Co. (JSDA) have dropped 7% following the release of its first-quarter results for 2025, contrasting with the S&P 500 index, which rose 0.3% during the same period. Over the last month, JSDA shares have decreased by 4.7%, while the broader index saw a notable increase of 10.3%. This trend reflects investor caution despite the company’s internal restructuring and turnaround efforts.

Revenue and Earnings Insights

For the quarter ending March 31, 2025, Jones Soda reported revenues of $4.6 million, a decrease of 7.8% from $5 million in the same period last year. The decline was mainly due to the absence of a one-time pipeline fill that had positively impacted the prior-year numbers. The beverages segment generated $4.2 million, down from $4.6 million year over year, while revenue from the Cannabis (THC) segment remained steady at $0.4 million.

Despite the dip in revenue, the company managed to narrow its net loss to $0.9 million, equating to 1 cent per share, compared to a net loss of $1.2 million, also at 1 cent per share, a year prior. Adjusted EBITDA improved by 39%, reaching a loss of $0.6 million down from $1 million, largely due to reduced operating expenses and better cost management.

Financial Metrics Overview

Gross profit for the quarter fell to $1.7 million from $1.9 million, reflecting a 9.2% decrease aligned with decreased sales. The gross margin, however, remained relatively stable at 37.3%, slightly down from 37.8% in the prior year. Furthermore, selling and marketing expenses declined 20% to $1.2 million, while general and administrative expenses dropped by 22%, contributing to the improved adjusted EBITDA.

Sales of the company’s hemp-derived HD9 beverages increased for the fourth consecutive quarter, generating $0.9 million in revenue and demonstrating growing consumer interest in this product line.

Management’s Perspective

CEO Scott Harvey described the quarter as a pivotal step towards a strategic turnaround, noting early signs of operational advancement. He highlighted the leadership transition in February and the implementation of new cost controls and supply chain optimizations. “These early actions reflect our commitment to operational rigor and set the stage for continued momentum in the quarters ahead,” said Harvey.

He also emphasized a stronger focus on return-on-investment-driven decisions and efficient resource allocation across core soda, modern soda, and adult beverage categories. The goal is to scale the business while maintaining brand equity.

Key Influencing Factors

The reported revenue decline was mainly due to a one-time pipeline fill in early 2024 that was not repeated this time, making year-over-year comparisons less favorable. Management also noted a significant increase in trade spending and promotional allowances, which surged 75% year-over-year to $0.7 million because of timing around incentive programs.

On the cost front, operating expenses were significantly lowered by tightening marketing budgets and reducing administrative costs, highlighting management’s commitment to operational discipline.

Future Outlook and Guidance

Management pointed to ongoing cost optimization and product expansion as crucial to its future strategy. Plans include launching new zero-calorie soda offerings, specifically Jones Zero Root Beer and Zero Dr. Jones, later this year.

Additionally, the company is assessing strategic alternatives for its Cannabis THC segment, hinting at potential restructuring or repositioning of that area of the business.

Corporate Developments

During this quarter, Jones Soda undertook several corporate actions to enhance its financial flexibility. In February, the company secured a $5 million revolving credit facility to support sales and expansion efforts. Subsequently, in early May, it obtained a $450,000 loan from its board chairman at a 12% interest rate, due by October 2025.

The company also saw leadership changes, naming Scott Harvey as CEO and Brian Meadows as CFO, both of whom bring experience essential for navigating the company’s strategic transformation.

Although the first quarter reflects challenges against a strong prior-year period, Jones Soda’s cost-cutting successes and growth in HD9 beverages present encouraging signs. However, the effectiveness of these efforts in altering broader investor sentiment remains uncertain, particularly as the company seeks to stabilize its cannabis operations and achieve more consistent revenue growth.