Jones Soda (OTCMKTS:JSDA) reported a sharp increase in first-quarter revenue and reached GAAP net income profitability, with management crediting branded collaborations, club-channel execution and operational improvements for the company’s performance.
Chief Executive Scott Harvey said revenue for the quarter ended March 31, 2026, was $12.4 million, up 194% from the prior-year period and above the company’s guidance. He called the quarter “a meaningful inflection point” for Jones Soda and said performance was driven primarily by the company’s partnership and branded collaboration platform, including strong demand for its Fallout-branded offerings.
Revenue Growth Led by Fallout Products
Chief Financial Officer Brian Meadows said first-quarter revenue rose by approximately $8.2 million to $12.4 million, compared with about $4.2 million in the first quarter of 2025. He said the increase was primarily the result of Fallout-branded products sold through the company’s club channel.
Gross profit increased to approximately $3.9 million from approximately $1.3 million in the prior-year period. Gross margin slipped to 31.3% from 32.9%, which Meadows attributed primarily to a decline in sales of HD9 products, which have generally carried higher margins than the company’s other products.
Trade spend and promotional allowances totaled $1.4 million, up from $0.7 million a year earlier. As a percentage of gross revenue, however, trade spend declined to 9.5% from 13.5%.
Meadows said selling, general and administrative expenses rose by $1.2 million, or 53%, mainly due to higher broker and royalty payments tied to higher sales. As a percentage of revenue, SG&A fell to 16.4% from 26.3% in the prior-year quarter.
Jones Soda reported net income of $115,000, or $0.00 per share, compared with a net loss of $852,000 in the prior-year period, which included $240,000 of income from discontinued operations. Adjusted EBITDA was $0.6 million, compared with an adjusted EBITDA loss of $1.1 million a year earlier. Meadows said it marked the second consecutive quarter of positive adjusted EBITDA and reiterated that the company’s adjusted EBITDA break-even level is based on $10 million of net sales per quarter.
Core Soda Distribution Expands
Harvey said the company continues to expand distribution in its core soda business and deepen relationships with key retailers. Subsequent to quarter-end, Jones Soda introduced four-packs in 650 top-volume Walmart locations across the United States. The packs include Root Beer, Cream Soda and Berry Lemonade.
The Walmart rollout is tied to an expanded partnership with Folds of Honor as part of the America 250 celebration. Harvey said the four-packs began featuring special Folds of Honor packaging this month, while individual bottles inside the packs showcase photographs of military service members and first responders. He said Jones Soda will fund educational scholarships for Folds of Honor recipients as part of the program.
Harvey also said the company expanded distribution into more than 700 additional Circle K stores across Canada, bringing its total distribution within the chain to approximately 1,750 locations nationally. He said Jones Soda also expanded its rotational presence in the club channel following the performance of its branded collaboration programs.
Operational Improvements Support Profitability
Management said operational changes made during 2025 continued to benefit the company in the first quarter. Harvey cited a centralized logistics model, improved forecasting and disciplined inventory management as factors that helped Jones Soda support higher sales volume while maintaining operational efficiency.
Meadows said management has held discussions with major suppliers about better pricing tied to higher 2026 volumes and expects to see increased gross profit margins later in the year. He also said the company has identified opportunities to reduce warehousing costs beginning in the second quarter.
Meadows noted one area of pressure: freight expenses. He said the company expects higher freight surcharges in the latter part of 2026 because of the negative impact of higher oil prices compared with last year.
HD9 Sales Decline Amid Regulatory Uncertainty
Jones Soda’s HD9 sales declined to $0.2 million in the first quarter of 2026 from $0.9 million a year earlier. Meadows said the decline was expected, citing previously disclosed regulations that come into effect in November and prohibit the sale of HD9 products containing more than 1 milligram of THC.
Meadows said the company’s 2026 net revenue guidance does not include any material expectation from HD9 revenue. Harvey said the adult beverage category remains challenged in the near term, but the company is continuing to evaluate longer-term opportunities that align with consumer preferences and regulatory frameworks.
In modern soda, Harvey said Jones Soda remains encouraged by consumer response, although the category is competitive. He said the company is focused on improving velocities, refining retail placement and increasing account productivity.
Guidance, Financing and Product Pipeline
Jones Soda reaffirmed that it expects its 2026 revenue growth rate to exceed 60% over full-year 2025 revenue. Meadows said there is potential upside from organic product innovations and additional partnerships that could land in 2026.
The company ended the quarter with $4.4 million in cash and cash equivalents, up from $3.6 million at year-end 2025. Meadows said Jones Soda has received firm commitments for a previously announced $2.5 million private placement priced at $0.33 per share, with additional interest above that amount. He said the financing is expected to close by the end of May and that both he and Harvey will participate.
Meadows said the funds, along with expanded $10 million credit facilities with Two Shores Capital, provide liquidity and flexibility to support growth and strategic initiatives. He also said Jones Soda plans to focus on an uplisting during the second quarter, with a portion of the financing proceeds supporting that project.
During a shareholder question-and-answer session, Harvey said Crayola products, which were online-only last year, will be available both at retail and online this year. He also said Jones Zero is expected to roll out this summer in a specific channel where the company already has commitments.
Asked about a new Fallout variety pack appearing in Costco Canada, Harvey said the product is part of a club partnership and will be available throughout Canada and in the United States in the next several weeks. He said the product includes Nuka-Cola Victory, Nuka Cherry and Nuka Orange and described the initial response as strong.
About Jones Soda (OTCMKTS:JSDA)
Jones Soda Co is a Seattle-based beverage company known for its craft sodas featuring unconventional flavors and personalized label artwork. Founded in 1995, the company produces a variety of carbonated soft drinks, including its signature Tomato, Creamy Red & Black, and Blue Bubblegum flavors, alongside diet and zero-sugar alternatives. In addition to traditional soda offerings, Jones Soda has expanded its portfolio to include energy drinks, sparkling waters and limited-edition seasonal flavors that cater to niche consumer preferences.
Beyond its core product lineup, Jones Soda operates a direct-to-consumer ecommerce platform that allows customers to create custom photo labels for special occasions and corporate events.
