BRC Inc. (BRCC)

CIK: 0001891101. SIC: 2080 Beverages. Latest 10-K as of: 2026-03-02.

SIC breadcrumb: Manufacturing > Food And Kindred Products > SIC 2080 Beverages

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1891101. Latest filing source: 0001891101-26-000022.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001891101.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001891101.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001891101-26-000028.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-04. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the annual audited consolidated financial statements, notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"). In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause the Company's actual results to differ materially from management’s expectations. When used in this report, the terms “we,” “us,” “our,” “BRCC,” “Black Rifle Coffee,” “Black Rifle Coffee Company,” and the “Company” mean BRC Inc. and its consolidated subsidiaries, collectively, unless the context requires otherwise.

Overview

Black Rifle Coffee Company is a Veteran-founded and led premium coffee, and energy drink company operating through one reportable segment composed of three primary channels: Wholesale, DTC, and Outposts. We leverage in-house media and content creation to support brand awareness, customer engagement, and community building. Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Mr. Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, we have grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and all who love America.

Trends

Certain trends affecting our business within the respective sales channels are as follows:

•Wholesale channel revenue continues to increase as we add new customers and expand our shelf presence in the Food, Drug, and Mass ("FDM") market. We expect continued revenue growth in this channel as we invest to increase brand awareness, efficient promotional activity at-shelf, new product launches, and expanded distribution in the FDM market.

•DTC channel revenue has grown as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website. Additionally, we are increasing our investment in major third-party ecommerce marketplaces in response to changing consumer purchasing behavior.

•Outpost channel revenue is stabilizing as we focus on improving transaction volumes and average order values through customer retention programs and tailored product offerings. In 2026, we expect consistent performance in this channel as we reallocate investments to other channels while seeking to improve profitability through operational and strategic changes, which may include the closure of underperforming Outposts.

Recent Developments

Operational Improvement Plan

During the second quarter of 2025, management implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. This plan was extended in the third quarter of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $6.6 million consisting of severance and transition costs, substantially all of which have been incurred as of March 31, 2026. We estimate that the costs savings as a result of this plan will exceed $11.4 million on an annualized run rate basis. As of March 31, 2026, we have realized approximately $8.4 million of these savings.

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Table of Contents

Key Factors Affecting Our Performance

Our Ability to Increase Brand Awareness

Maintaining and growing brand awareness and loyalty is critical to our success. We believe we have developed an effective marketing strategy that enhances brand awareness and drives consumer engagement, leading to conversion and repeat purchases. Consumer appreciation of our brand, enhanced by our mission to give back to the veteran and first responder communities, is primarily reflected in our sales across our three channels. We intend to continue to refine and develop our brand strategy utilizing reach-based formats such as streaming advertising and other select marketing channels. In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand.

Our Ability to Grow Our Customer Base in Our Wholesale Channel

We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations. Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting increased market presence and distribution reach.

Our Ability to Acquire and Retain Customers at a Reasonable Cost

We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance. We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our capabilities in digital marketing and consumer engagement provide a competitive advantage in attracting, converting, and retaining our consumers. We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is efficient, while managing customer acquisition costs and maximizing returns on marketing investments.

Our Ability to Drive Repeat Purchases of Our Products

We gain substantial economic value from repeat users of our products who consistently re-order our products. The pace of our growth rate may be affected by the repeat purchase behavior among our existing and newly acquired customers.

Our Ability to Expand Our Product Line

Our goal is to continue to expand our product line over time to increase our growth opportunities and reduce product-specific risks through diversification into multiple products intended for regular consumer use. Our pace of growth will be partially affected by the timing and scale of new product launches. We believe that it is important to our business to continue to innovate with new products and flavors.

Our Ability to Manage Our Supply Chain

Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers and co-manufacturers located inside and outside the United States. The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua, and since 2020, we have also sourced green coffee beans from more than ten additional countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is a critical component of our manufacturing and supply chain operations. All of our bagged coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, oversees cupping, grading, scoring, and sourcing of our coffees. We also must effectively manage our co-manufacturers and suppliers.

Components of Our Results of Operations

Revenue, net

We sell our products both directly and indirectly to our customers through a broad set of physical and online platforms. Our revenue, net reflects the impact of product returns as well as discounts and fees for certain sales programs, trade spend, promotions, and loyalty rewards.

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Cost of goods sold

Cost of goods sold primarily includes raw material costs, labor costs directly related to producing our products including wages and benefits, shipping costs, and other overhead costs related to certain aspects of production, warehousing, fulfillment, shipping, and credit card fees.

Operating expenses

Operating expenses consist of marketing and advertising expenses related to brand marketing campaigns through various online platforms, including email, digital, website, social media, search engine optimization, as well as performance marketing efforts including retargeting, paid search and product advertisements, as well as social media advertisements and sponsorships. Operating expenses also consist of salaries, wages, and benefits and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administrative costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.

Interest expense

Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs.

Results of Operations

This discussion and analysis pertains to comparisons of material changes on the consolidated financial statements for three months ended March 31, 2026 and 2025. The following table represents the selected results of operations for BRC Inc. for the periods indicated (dollars in thousands, unaudited):

Three Months Ended March 31,

2026

2025

Revenue, net

$

109,227 

$

89,974 

Cost of goods sold

73,139 

57,502 

Gross profit

36,088 

32,472 

Operating expenses

Marketing and advertising

10,180 

11,322 

Salaries, wages and benefits

14,109 

13,563 

General and administrative

10,098 

11,786 

Other operating expense, net

382 

1,233 

Total operating expenses

34,769 

37,904 

Operating income (loss)

1,319 

(5,432)

Non-operating expenses

Interest expense, net

(1,240)

(2,370)

Total non-operating expenses

(1,240)

(2,370)

Income (loss) before income taxes

79 

(7,802)

Income tax expense

33 

44 

Net income (loss)

$

46 

$

(7,846)

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Components of Our Operating Income (Loss)

Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025

The following table summarizes our revenue, gross profit, gross margin, and total operating expenses (dollars in thousands, unaudited):

Three Months Ended March 31,

2026

2025

$ Change

% Change

Revenue, net

$

109,227

$

89,974

$

19,253 

21 

%

Cost of goods sold

73,139

57,502

15,637 

27 

%

Gross profit

$

36,088

$

32,472

$

3,616 

11 

%

Gross margin(1)

33 

%

36 

%

Total operating expenses

$

34,769

$

37,904

$

(3,135)

(8)

%

(1) Gross margin is calculated as gross profit as percentage of revenue, net.

Revenue, net

Net revenue for the three months ended March 31, 2026 increased $19.3 million, or 21%, to $109.2 million as compared to $90.0 million for the corresponding period in 2025.

The following table summarizes net sales by channel for the periods indicated (dollars in thousands, unaudited):

Three Months Ended March 31,

2026

2025

$ Change

% Change

Wholesale

$

74,702 

$

56,791 

$

17,911 

32 

%

DTC

29,720 

27,720 

2,000 

7 

%

Outpost

4,805 

5,463 

(658)

(12)

%

Total net sales

$

109,227 

$

89,974 

$

19,253 

21 

%

Net revenue for our Wholesale channel for the three months ended March 31, 2026, increased $17.9 million, or 32%, to $74.7 million as compared to $56.8 million for the corresponding period in 2025. The increase was primarily driven by expanded packaged coffee distribution and SKU expansion at FDM retailers, as well as contributions from Black Rifle Energy.

Net revenue for our DTC channel for the three months ended March 31, 2026 increased $2.0 million, or 7%, to $29.7 million as compared to $27.7 million for the corresponding period in 2025. The increase was primarily driven by growth at third-party digital marketplaces, which was partially offset by declines in subscription and non-subscription reven

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-02. Report date: 2025-12-31.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, references to “we”, “us”, “our”, “Black Rifle Coffee”, “Black Rifle Coffee Company”, “BRCC” and the “Company” in this section are to the business and operations of BRC Inc. and its consolidated subsidiaries. The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and related notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause BRCC’s actual results to differ materially from management’s expectations. Factors which could cause such differences are discussed herein and set forth in Part I, Item 1A, Risk Factors in this Annual Report.

Overview

Black Rifle Coffee Company is a Veteran-founded and led premium coffee, and energy drink company operating through one reportable segment composed of three primary channels: Wholesale, DTC, and Outposts. We leverage in-house media and content creation to support brand awareness, customer engagement, and community building. Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Mr. Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, we have grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and others who share our values.

In February 2022, we completed the Business Combination and as a result of the consummation of a series of mergers in connection therewith, Authentic Brands became a subsidiary of BRC Inc., with BRC Inc. acting as the sole managing member thereof as a public benefit corporation. The Business Combination was accounted for as a reverse acquisition and a recapitalization of Authentic Brands. Accordingly, the Business Combination was reflected as the equivalent of Authentic Brands issuing stock for the net assets of SilverBox, accompanied by a recapitalization. Under this method of accounting, SilverBox is treated as the “acquired” company for financial reporting purposes. The net assets of SilverBox are stated at historical cost, with no goodwill or other intangible assets recorded. This accounting treatment was determined by the controlling owner of Authentic Brands prior to the Business Combination, who also controls the combined company following the Business Combination.

Trends

Certain trends affecting our business within the respective sales channels are as follows:

•Wholesale channel revenue continues to increase as we add new customers and expand our presence in the FDM market. We expect continued revenue growth in this channel as we invest to increase brand awareness, and in customer acquisition, new product launches, including our Black Rifle Energy product line, and expanded distribution in the FDM market.

•DTC channel revenue decline has moderated as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website. Additionally, we are increasing our investment in major third-party ecommerce marketplaces in response to changing consumer purchasing behavior.

•Outpost channel revenue is stabilizing as we focus on improving transaction volumes and average order values through customer retention programs and tailored product offerings. In 2026, we expect limited growth in this channel as we reallocate investments to other channels while seeking to improve profitability through operational and strategic changes, which may include the closure of underperforming Outposts.

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Table of Contents

Recent Developments

Operational Improvement Plan

During the second quarter of 2025, management implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. This plan was extended in the third and fourth quarters of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $5.6 million consisting of severance and transition costs, substantially all of which were incurred as of December 31, 2025. We estimate that the costs savings as a result of this plan will exceed $8.9 million on an annualized run rate basis. As of December 31, 2025, we have realized approximately $5.3 million of these savings.

Key Factors Affecting Our Performance

Our Ability to Increase Brand Awareness

Maintaining and growing brand awareness and loyalty is critical to our success. We believe we have developed an effective marketing strategy that enhances brand awareness and drives consumer engagement. Consumer appreciation of our brand is primarily reflected in our sales across our three channels. We intend to continue to refine and develop our brand strategy utilizing reach-based formats such as streaming advertising and other select marketing channels. In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand.

Our Ability to Grow Our Customer Base in Our Wholesale Channel

We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations. Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting increased market presence and distribution reach.

Our Ability to Acquire and Retain Customers at a Reasonable Cost

We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance. We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our capabilities in digital marketing and consumer engagement provide a competitive advantage in attracting, converting, and retaining our consumers. We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is efficient, while managing customer acquisition costs and maximizing returns on marketing investments.

Our Ability to Drive Repeat Purchases of Our Products

We gain substantial economic value from repeat users of our products who consistently re-order our products. The pace of our growth rate may be affected by the repeat purchase behavior among existing and newly acquired customers.

Our Ability to Expand Our Product Line

Our goal is to continue to expand our product line over time to increase our growth opportunities and reduce product-specific risks through diversification into multiple products intended for regular consumer use. Our pace of growth will be partially affected by the timing and scale of new product launches. We believe that it is important to our business to continue to innovate with new products and flavors.

Our Ability to Manage Our Supply Chain

Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers and co-manufacturers located inside and outside the United States. The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua and since 2020, we have also sourced green coffee beans from more than ten additional countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is a critical component of our manufacturing and supply chain operations. All of our bagged coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, oversees cupping, grading, scoring, and sourcing of our coffees. We also must effectively manage our co-manufacturers and suppliers.

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Table of Contents

Components of Our Results of Operations

Revenue, net

We sell our products both directly and indirectly to our customers through a broad set of physical and online platforms. Our revenue, net reflects the impact of product returns as well as discounts and fees for certain sales programs, trade spend, promotions, and loyalty rewards.

Cost of goods sold

Cost of goods sold primarily includes raw material costs, labor costs directly related to producing our products including wages and benefits, shipping costs, and other overhead costs related to certain aspects of production, warehousing, fulfillment, shipping, and credit card fees.

Operating expenses

Operating expenses consist of marketing and advertising expenses related to brand marketing campaigns through various online platforms, including email, digital, website, social media, search engine optimization, as well as performance marketing efforts including retargeting, paid search and product advertisements, as well as social media advertisements and sponsorships. Operating expenses also consist of salaries, wages, and benefits, and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administrative costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.

Interest expense

Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs. For the year ended December 31, 2024, interest expense also included debt extinguishment costs.

Income tax provision

The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. The Company reduces the carrying amounts of deferred tax assets (“DTAs”) by a valuation allowance if, based on the evidence available, it is more likely than not that such assets will not be realized. In making the assessment under the more likely than not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of the DTAs. The assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods by jurisdiction, the Company's experience with loss carryforwards not expiring unutilized, and all tax planning alternatives that may be available. A valuation allowance is recognized if under applicable accounting standards the Company determines it is more likely than not that its deferred tax assets would not be realized.

In accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, the Company evaluates the technical merits of its income tax positions and establishes unrecognized income tax benefits for uncertain tax positions when deemed appropriate. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized occurs when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. See Note 13, Income Taxes for additional information.

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Results of Operations

This discussion and analysis pertains to comparisons of material changes in the consolidated financial statements for the years ended December 31, 2025 and 2024. For the comparisons of the years ended December 31, 2024 and 2023, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 3, 2025. The following table presents the selected results of operations for BRCC for the periods indicated (amounts in thousands):

Year Ended December 31,

2025

2024

Revenue, net

$

398,263 

$

391,490 

Cost of goods sold

260,317 

230,316 

Gross profit

137,946 

161,174 

Operating expenses

Marketing and advertising

39,213 

35,631 

Salaries, wages and benefits

56,744 

62,415 

General and administrative

54,736 

50,827 

Other operating expense, net

11,850 

8,453 

Total operating expenses

162,543 

157,326 

Operating income (loss)

(24,597)

3,848 

Non-operating income (expenses)

Interest expense, net

(7,506)

(11,325)

Total non-operating expenses

(7,506)

(11,325)

Loss before income taxes

(32,103)

(7,477)

Income tax expense

132 

172 

Net loss

$

(32,235)

$

(7,649)

Components of Our Operating Income (Loss)

Comparison of the year ended December 31, 2025 to the year ended December 31, 2024

The following table summarizes our revenue, gross profit, gross margin, and total operating expenses (dollars in thousands):

Year Ended December 31,

2025

2024

$ Change

% Change

Revenue, net

$

398,263

$

391,490

$

6,773 

2 

%

Cost of goods sold

260,317

230,316

30,001 

13 

%

Gross profit

137,946

161,174

(23,228)

(14)

%

Gross margin(1)

35 

%

41 

%

Total operating expenses

$

162,543 

$

157,326 

$

5,217 

3 

%

(1)Gross margin is calculated as gross profit as a percentage of revenue, net

Revenue, net

Net revenue for the year ended December 31, 2025 increased $6.8 million, or 2%, to $398.3 million as compared to $391.5 million for the corresponding period in 2024.

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The following table summarizes net sales by channel for the periods indicated (dollars in thousands):

Year Ended December 31,

2025

2024

$ Change

% Change

Wholesale

$

258,005 

$

245,040 

$

12,965 

5 

%

DTC

117,638 

123,779 

(6,141)

(5)

%

Outpost

22,620 

22,671 

(51)

— 

%

Total net sales

$

398,263 

$

391,490 

$

6,773 

2 

%

Net revenue for our Wholesale channel for the year ended December 31, 2025 increased $13.0 million, or 5%, to $258.0 million compared to $245.0 million for the corresponding period in 2024. The increase was primarily driven by expanded packaged coffee distribution and SKU expansion at FDM retailers, as well as contributions from Black Rifle Energy, which was launched in the fourth quarter of 2024. This increase was partially offset by a $19.0 million decrease in revenue recognized in connection with barter transactions, whereby finished goods inventory was exchanged for prepaid advertising credits.

Net revenue for our DTC channel for the year ended December 31, 2025 decreased $6.1 million, or 5%, to $117.6 million compared to $123.8 million for the corresponding period in 2024. The decrease was primarily driven by the impact of a $6.5 million decrease in the accrual for loyalty rewards points in 2024 following a change in the policy related to expiration of loyalty rewards points. Our DTC channel continues to stabilize as consumer purchasing behavior increasingly shifts toward third-party digital retail marketplaces rather than direct-to-consumer platforms.

Net revenue for our Outpost channel for the year ended December 31, 2025 remained relatively flat compared to the corresponding period in 2024.

Cost of goods sold

Cost of goods sold for the year ended December 31, 2025 increased $30.0 million, or 13%, to $260.3 million compared to $230.3 million for the corresponding period in 2024. Gross margin decreased to 35% for the year ended December 31, 2025 from 41% for the corresponding period in 2024. The decrease in gross margin was driven by higher inflationary costs, primarily related to coffee bean prices, tariffs, and shipping costs. The decline also reflected the impact of lower net revenue resulting from the decrease in the accrual for loyalty reward points in 2024. In addition, we increased investments in trade and promotions, which were partially offset by pricing actions, productivity improvements, and favorable mix.

Operating expenses

Total operating expenses for the year ended December 31, 2025 increased $5.2 million, or 3%, to $162.5 million compared to $157.3 million for the corresponding period in 2024.

The following table summarizes operating expenses for the periods indicated (dollars in thousands):

Year Ended December 31,

2025

2024

$ Change

% Change

Marketing and advertising

$

39,213 

$

35,631 

$

3,582 

10 

%

Salaries, wages and benefits

56,744 

62,415 

(5,671)

(9)

%

General and administrative

54,736 

50,827 

3,909 

8 

%

Other operating expense, net

11,850 

8,453 

3,397 

40 

%

Total operating expenses

$

162,543 

$

157,326 

$

5,217 

3 

%

Marketing and advertising expenses for the year ended December 31, 2025 increased $3.6 million, or 10%, to $39.2 million compared to $35.6 million for the corresponding period in 2024. This increase was primarily driven by the expansion of partnerships, increased investment in consumer research and data, incremental shopper marketing, higher marketing spend to support the launch of Black Rifle Energy, and expanded performance-based initiatives.

Salaries, wages and benefits expenses for the year ended December 31, 2025 decreased $5.7 million, or 9%, to $56.7 million compared to $62.4 million for the corresponding period in 2024. This decrease was primarily driven by reduced compensation costs through headcount reductions, partially offset by an increase in severance costs associated with our Operational Improvement Plan.

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General and administrative expenses for the year ended December 31, 2025 increased $3.9 million, or 8%, to $54.7 million compared to $50.8 million for the corresponding period in 2024. This increase was primarily attributable to accrued costs associated with the termination of a software contract that will be transitioned to a different software solution in 2026.

Other operating expense, net for the year ended December 31, 2025 increased $3.4 million, or 40%, to $11.9 million compared to $8.5 million for the corresponding period in 2024. The increase was primarily related to a $6.2 million increase in legal contingencies, net of insurance recoveries, partially offset by a decrease in termination costs for our retail outpost locations in 2025. For further discussion of legal contingencies see Note 15, Commitments and Contingencies, of our consolidated financial statements.

Components of Our Non-Operating Income (Expenses)

Comparison of the year ended December 31, 2025 to the year ended December 31, 2024

The following table summarizes non-operating expenses for the periods indicated (dollars in thousands):

Year Ended December 31,

2025

2024

$ Change

% Change

Interest expense, net

$

(7,506)

$

(11,325)

$

(3,819)

(34)

%

Total non-operating expenses

$

(7,506)

$

(11,325)

$

(3,819)

(34)

%

Interest expense for the year ended December 31, 2025 decreased $3.8 million, or 34%, to $7.5 million compared to $11.3 million for the corresponding period in 2024. The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the latter half of 2025.

Income Tax Provision

The following table summarizes income tax provisions for the periods indicated (dollars in thousands):

Year Ended December 31,

2025

2024

Income tax expense

$

132

$

172

Effective income tax rate

(0.4)

%

(2.3)

%

For further details regarding income tax matters, see Note 13, Income Taxes, within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Income tax expense was $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively, representing effective tax rates of (0.4)% and (2.3)%, respectively. The effective tax rate for the year ended December 31, 2025 reflects pretax losses and our assessment that certain current year deferred tax assets are not expected to be realized, resulting in the recognition of a valuation allowance.

Liquidity and Capital Resources

Liquidity Overview

Our principal use of cash is to support the growth of our business, including increasing working capital requirements related to inventories, accounts receivable, and general and administrative expenses. We also use cash to fund our debt service commitments, capital equipment acquisitions, and other growth-related needs.

Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of December 31, 2025, our cash and cash equivalents were $4.3 million, our working capital was $24.2 million, and under our credit facilities, we had $55.4 million of available borrowings. Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. As of December 31, 2025, we are in compliance with our covenants under the credit facilities and there are no defaults or events of default. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for at least the next twelve months.

On July 18, 2025, we closed the Offering and issued 28,000,000 shares of Class A Common Stock and an additional 4,200,000 shares of Class A Common Stock as a result of the full exercise of the underwriter's option, for total net proceeds of $37.3 million.

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See Note 8, Long-Term Debt, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding the Credit Agreements.

Cash Flows from Operating, Investing and Financing Activities

Comparison of the year ended December 31, 2025 to the year ended December 31, 2024

The following table summarizes our cash flows for the periods indicated (dollars in thousands):

Year Ended December 31,

2025

2024

$ Change

% Change

Cash flows provided by (used in):

Operating activities

$

(9,810)

$

11,308 

$

(21,118)

(187)

%

Investing activities

$

1,418 

$

(7,713)

$

(9,131)

(118)

%

Financing activities

$

5,912 

$

(10,698)

$

16,610 

(155)

%

Operating Activities

Net cash used in operating activities was $9.8 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $11.3 million for the corresponding period in 2024. The $21.1 million change in net cash from operating activities was primarily driven by a net loss of $32.2 million in 2025 compared to a net loss of $7.6 million in 2024, as well as changes in working capital, including inventory and accounts payable.

Investing Activities

Net cash provided by investing activities was $1.4 million for the year ended December 31, 2025, compared to net cash used in investing activities of $7.7 million for the corresponding period in 2024. The $9.1 million change was primarily due to lower capital expenditures, including reduced investment in our Outpost locations, roasting facilities and information technology, as well as $5.1 million in proceeds from the sale of property during 2025.

Financing Activities

Net cash provided by financing activities was $5.9 million for the year ended December 31, 2025, compared to net cash used in financing activities of $10.7 million for the corresponding period in 2024. The $16.6 million increase in net cash provided by financing activities was primarily due to $37.3 million of net proceeds received from the public offering in the third quarter of 2025 and $1.0 million of net proceeds from shares issued in connection with a legal settlement, partially offset by a net decrease of $31.6 million on long-term debt, primarily due to repayments of our ABL facility.

Commitments

The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $30.0 million for 2025, $32.4 million for 2026 and $15.1 million for 2027. See Note 15, Commitments and Contingencies to the consolidated financial statements included in Item 8 of Part II of this Annual Report for information regarding such manufacturing and purchase agreements.

Liabilities relating to operating leases that have commenced as of December 31, 2025 have been reported on the balance sheet as operating lease liabilities. Payments on leases are expected to be approximately $3.7 million in the next twelve months, and approximately $31.3 million beyond twelve months through 2043. See Note 9, Leases to the consolidated financial statements included in Item 8 of Part II of this Annual Report for additional information.

Capital Expenditures

Future capital requirements will vary materially from period to period and will depend on factors such as the addition of roasting capacity and the expansion of our corporate and information technology infrastructure to support changes in the Company. We currently expect to fund our material capital requirements with borrowings from our credit facilities, but we may also seek additional debt or equity financing.

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Critical Accounting Estimates

Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and where the impact of the estimates on financial condition or operating performance is material.

We evaluate critical estimates using these criteria on an ongoing basis and add or subtract critical estimates as appropriate. Based on this assessment, we conclude that we do not have any estimates where the nature of the estimates is material due to the level of subjectivity and judgment utilized.

Our significant accounting estimates are discussed in more detail in Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent it has made one, of their potential impact on our consolidated financial statements.

JOBS Act

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies for up to five years or until such companies are no longer emerging growth companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Accordingly, the consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.