BUDA (NYSEAMERICAN:BUDA) reported first-quarter 2026 revenue growth and highlighted a newly announced Walmart rollout, while management said a temporary spike in lime costs weighed on margins during the period.
On the company’s earnings call, Chief Executive Officer Horatio Lonsdale-Hands said the quarter was Buda Juice’s first full quarter as a public company. Revenue rose 17.7% year over year, in line with what he described as the “mid-teen outlook” discussed on the company’s prior earnings call.
Revenue Rises as Existing Customers Drive Growth
Chief Financial Officer Clint Bowers said first-quarter revenue increased by about $500,000 to $3.5 million, up from $3.0 million in the prior-year period. Gross profit was $1.4 million, compared with $1.3 million a year earlier.
Gross margin declined to 39.5% from 44.9%. Management attributed the drop primarily to higher lime costs following a supply disruption in western Mexico.
Bowers said lime costs rose by roughly 300% beginning in late February and continuing through March due to “cartel-related supply chain disruptions in western Mexico.” He said that, if first-quarter lime costs were normalized to prior-year levels, gross margin would have been closer to the company’s historical mid-40% range.
Lonsdale-Hands described the citrus supply issue as temporary and said conditions have stabilized. Bowers added that lime prices have moved back toward normalized levels since the end of the quarter, and the company expects gross margin to trend back above 40% in the second quarter.
Despite the margin pressure, management pointed to improvement in production labor costs. Lonsdale-Hands said labor cost as a percentage of revenue improved by more than 150 basis points year over year, reflecting operational efficiency across the business.
Public Company Costs Lift G&A Expenses
General and administrative expenses increased to $663,000 from $416,000 in the prior-year quarter. Bowers said the increase reflected normalized executive compensation as the company transitioned to public-company status, additional facility lease expense tied to a third-quarter 2025 capacity expansion and $183,000 in public-company costs.
Those public-company costs consisted mainly of audit fees, legal costs, insurance and investor relations expenses, Bowers said. He added that those costs did not exist in the prior-year period and that the company continues to expect public-company costs of about $1 million annually.
Operating income was $0.6 million, compared with $0.8 million in the first quarter of 2025. The company reported $137,000 in interest income and $359,000 in federal income tax expense.
Bowers said the tax expense included the 21% corporate tax rate for first-quarter earnings and a one-time $182,000 non-cash charge related to the company’s conversion from an LLC to a C corporation on Jan. 1, 2026. As a C corporation, the company is now subject to federal corporate taxes.
GAAP net income was $0.4 million, compared with $0.8 million a year earlier. On a non-GAAP basis, net income was $0.6 million, and earnings per share were $0.05, based on weighted average diluted shares outstanding of 12.35 million.
Adjusted EBITDA was $850,000, which Bowers said was down slightly from last year. Free cash flow was $1.1 million, up 36.5% year over year. The company ended the quarter with approximately $20 million in cash and no debt.
Walmart Expansion Extends Footprint Beyond Texas
Management also emphasized a recently announced retail expansion with Walmart. Lonsdale-Hands said the company expanded its products into 256 Walmart stores across nine states: Texas, New Mexico, Colorado, Mississippi, Arkansas, Missouri, Tennessee, Alabama and Kentucky.
The rollout marks the company’s move from one state to nine states and increases its store count by more than 75%, Lonsdale-Hands said. The Buda Fresh Cherry Limeade is being offered in 12-ounce single-serve and 32-ounce multi-serve formats, merchandised in the fresh produce department.
The products are manufactured at the company’s Dallas facility, where Buda recently invested in additional capacity and automation following its IPO to support future growth, Lonsdale-Hands said.
“When we went public this year, we had built a strong and profitable business concentrated primarily in Texas,” he said. “This expansion now diversifies both our geographic footprint and customer base as we continue building the business beyond our historical Texas concentration.”
In response to a question from Lake Street analyst Ryan Meyers, Lonsdale-Hands said the Walmart rollout would bring incremental revenue and profit, but the company is not providing revenue guidance. He also said that, as of the prior Saturday, products were on shelves in 246 Walmart stores across nine states.
Management Says Retail Discussions Continue
During the question-and-answer session, Craig-Hallum analyst Eric Des Lauriers asked about conversations with other retailers and the timing of possible shelf resets. Lonsdale-Hands said the company is working daily to grow with existing customers and bring new customers online, but did not provide specifics.
He said management is encouraged by retailer response to the company’s “Ultra Fresh” category, which he described as an opportunity for grocery stores seeking fresh products and more foot traffic in produce departments.
Asked about growth within the company’s existing store base, Lonsdale-Hands said Buda remains in the early stages of growth, including in Texas. He said management sees continued organic growth potential with existing customers and additional customer opportunities in the state.
“What we’re doing is we’re bringing fresh, clean, great tasting products to the mass market, which it hasn’t existed before,” Lonsdale-Hands said. “It’s a whole new category, which is, you know, we call Ultra Fresh.”
About BUDA (NYSEAMERICAN:BUDA)
Buda Juice Inc is a juice category for the supermarket fresh produce department with its cold-crafted, UltraFresh(TM) citrus juices. Buda Juice Inc is based in DALLAS.
