# Freshpet, Inc. (FRPT)

Informational only - not investment advice.

CIK: 0001611647
SIC: 2040 Grain Mill Products
SIC breadcrumb: [Manufacturing](/division/D/) > [Food And Kindred Products](/major-group/20/) > [SIC 2040 Grain Mill Products](/industry/2040/)
Latest 10-K filed: 2026-02-23
SEC page: https://www.sec.gov/edgar/browse/?CIK=1611647
Filing source: https://www.sec.gov/Archives/edgar/data/1611647/000161164726000006/frpt-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 1102015000 | USD | 2025 | 2026-02-23 |
| Net income | 139137000 | USD | 2025 | 2026-02-23 |
| Assets | 1777775000 | USD | 2025 | 2026-02-23 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001611647.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 129,706,613 | 152,359,487 | 193,237,000 | 245,862,000 | 318,790,000 | 425,489,000 | 595,344,000 | 766,895,000 | 975,177,000 | 1,102,015,000 |
| Net income | -3,160,673 | -4,262,341 | -5,361,000 | -1,383,000 | -3,188,000 | -29,699,000 | -59,494,000 | -33,614,000 | 46,925,000 | 139,137,000 |
| Operating income | -2,214,950 | -2,751,250 | -4,886,000 | -253,000 | -1,998,000 | -24,663,000 | -51,983,000 | -30,446,000 | 37,999,000 | 75,672,000 |
| Gross profit | 60,370,883 | 72,415,918 | 89,990,000 | 114,197,000 | 132,910,000 | 162,146,000 | 186,033,000 | 250,872,000 | 395,956,000 | 449,626,000 |
| Diluted EPS | -0.09 | -0.12 | -0.15 | -0.04 | -0.08 | -0.69 | -1.29 | -0.70 | 0.93 | 2.64 |
| Assets | 126,451,216 | 133,900,334 | 139,964,858 | 236,126,000 | 434,388,000 | 784,410,000 | 1,125,383,000 | 1,464,421,000 | 1,574,878,000 | 1,777,775,000 |
| Liabilities | 18,668,685 | 16,997,356 | 18,490,383 | 104,861,000 | 40,219,000 | 64,656,000 | 93,814,000 | 510,967,000 | 519,518,000 | 569,116,000 |
| Stockholders' equity | 107,782,531 | 116,903,000 | 121,474,000 | 131,265,000 | 394,169,000 | 719,754,000 | 1,031,569,000 | 953,454,000 | 1,055,360,000 | 1,208,659,000 |
| Cash and cash equivalents | 3,908,177 | 2,184,259 | 7,554,388 | 9,472,000 | 67,247,000 | 72,788,000 | 132,735,000 | 296,871,000 | 268,633,000 | 277,975,000 |
| Net margin | -2.44% | -2.80% | -2.77% | -0.56% | -1.00% | -6.98% | -9.99% | -4.38% | 4.81% | 12.63% |
| Operating margin | -1.71% | -1.81% | -2.53% | -0.10% | -0.63% | -5.80% | -8.73% | -3.97% | 3.90% | 6.87% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001611647.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.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -0.45 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | -0.39 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.52 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 183,331,000 | -16,952,000 | -0.35 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 200,621,000 | -7,166,000 | -0.15 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 215,421,000 | 15,290,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 223,849,000 | 18,602,000 | 0.37 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 235,253,000 | -1,694,000 | -0.03 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 253,367,000 | 11,895,000 | 0.24 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 262,708,000 | 18,122,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 263,249,000 | -12,697,000 | -0.26 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 264,689,000 | 16,356,000 | 0.33 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 288,848,000 | 101,663,000 | 1.86 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 285,229,000 | 33,815,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 297,644,000 | 48,508,000 | 0.91 | reported discrete quarter |

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

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1611647/000161164726000012/frpt-20260331.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-05-06
Report date: 2026-03-31

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

The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report").

In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations, and intentions. Our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled "Forward-Looking Statements" in this report and in the section entitled "Risk Factors" in our Annual Report.

Overview

Freshpet's mission is to help dogs and cats live longer, happier, healthier lives with the people who love them. We were inspired by the rapidly growing view among pet owners that their dogs and cats are a part of their family, leading them to demand healthier pet food choices. Since Freshpet's inception in 2006, we have created a comprehensive business model to deliver wholesome pet food that pet parents can trust, and in the process, we believe we have become one of the fastest growing pet food companies in North America. Our business model is difficult for others to replicate and we see significant opportunity for future growth by leveraging the unique elements of our business, including our brand, our production technology, our manufacturing network, our refrigerated distribution, our Freshpet Fridges and our culture.

Components of our Results of Operations

Net Sales

Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are primarily sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 30,425 retail stores as of March 31, 2026. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Our net sales growth strategy is driven by the following key factors:

•Increasing sales velocity from the average Freshpet Fridge due to increasing awareness, trial and adoption of Freshpet products and innovation. Our investments in marketing and advertising help to drive awareness and trial at each point of sale.

•Increasing distribution and penetration of Freshpet products in major classes of retail, including Grocery, Mass, International, Digital, Pet Specialty, and Club. The impact of new Freshpet Fridge installations on our net sales varies by retail class and depends on numerous factors including store traffic, refrigerator size, placement within the store, and proximity to other stores that carry our products. Digital orders include any purchases made online, including our direct-to-consumer business, and may also be fulfilled by our Freshpet Fridge network in brick and mortar stores.

•Consumer trends including long-term growth in pet ownership, pet humanization and a focus on health and wellness.

•At times we increase our sales price to offset any adverse movement in input costs.

Gross Profit

Our gross profit is net of costs of goods sold, which include the costs of product manufacturing, product ingredients, packaging materials and inbound freight, as well as depreciation and amortization and non-cash share-based compensation.

24

Table of Contents

We expect to continue to mitigate any adverse movement in input costs through a combination of cost management and price increases.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist of the following:

Outbound freight. We use a third-party logistics provider for outbound freight that ships directly to retailers as well as third-party distributors.

Marketing & advertising. Our marketing and advertising expenses primarily consist of television advertising, digital, and social media channels. Our digital efforts span a range of platforms and environments, including company and retail websites, retail media networks, search engines, blogs, and online reviews. These expenses may vary from quarter to quarter depending on the timing of marketing and advertising campaigns.

Freshpet Fridge operating costs. Freshpet Fridge operating costs consist of repair costs and depreciation. The purchase and installation costs for new Freshpet Fridges are capitalized and depreciated over the estimated useful life. Freshpet Fridges purchased in 2025, and after, are protected by a manufacturer warranty of five years, while those purchased prior to 2025 carry a three-year manufacturer warranty. We subsequently incur maintenance and freight costs for repairs and refurbishments handled by third-party service providers.

Research & development. Research and development costs consist of expenses to develop and test new products. The costs are expensed as incurred.

Brokerage. We use third-party brokers to assist with monitoring our products at the point-of-sale as well as representing us at headquarters for various customers. These brokers visit our retail customers’ store locations to ensure items are appropriately stocked and maintained.

Share-based compensation. The Company recognizes share-based compensation based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The Company estimates grant date fair value of its options using the Black-Scholes Merton option-pricing model. Service and performance based restricted stock units are measured based on the fair market value of the underlying stock on the dates of the grants whereas market based restricted stock units, such as total shareholder return awards, are measured using the Monte-Carlo simulation. Share awards are amortized under the straight-line method over the requisite service period of the entire award. The Company accounts for forfeitures as they occur.

Other general & administrative costs. Other general and administrative costs include non-plant personnel salaries and benefits, as well as corporate general & administrative costs.

Income Taxes

Income tax expense is comprised of federal and state income tax expense based on the period’s taxable income.

As a result of releasing a majority of the valuation allowance in 2025, and the resulting deferred tax asset position, income tax expense for the current period primarily represents deferred income tax expense.

25

Table of Contents

Condensed Consolidated Statements of Income (Loss)

For the Three Months Ended

March 31,

2026

2025

Amount

% of Net Sales

Amount

% of Net Sales

(Dollars in thousands)

Net sales

$

297,644 

100 

%

$

263,249 

100 

%

Cost of goods sold

176,970 

59 

%

159,461 

61 

%

Gross profit

120,674 

41 

%

103,788 

39 

%

Selling, general, and administrative expenses

116,343 

39 

%

115,285 

44 

%

Income (loss) from operations

4,331 

1 

%

(11,497)

(4)

%

Interest and other income, net

2,883 

1 

%

2,393 

1 

%

Interest expense

(3,586)

(1)

%

(3,459)

(1)

%

Gain on equity investment

62,013 

21 

%

— 

— 

%

Income (loss) before income taxes

65,641 

22 

%

(12,563)

(5)

%

Income tax expense

17,133 

6 

%

134 

— 

%

Net income (loss)

$

48,508 

16 

%

$

(12,697)

(5)

%

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Net Sales

The following table sets forth net sales by class of retailer:

Three Months Ended

March 31,

2026

2025

Amount

% of Net Sales

Amount

% of Net Sales

(Dollars in thousands)

Grocery, Mass, International and Digital

$

232,319 

78 

%

$

215,156 

82 

%

Pet Specialty and Club

65,325 

22 

%

48,093 

18 

%

Net Sales

$

297,644 

100 

%

$

263,249 

100 

%

Net sales increased $34.4 million, or 13.1%, to $297.6 million for the three months ended March 31, 2026 as compared to $263.2 million in the same period in the prior year. The $34.4 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $17.2 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 14.6%, partially offset by unfavorable price/mix of 1.5%.

26

Table of Contents

Gross Profit

Gross profit was $120.7 million, or 40.5% as a percentage of net sales, for the three months ended March 31, 2026, compared to $103.8 million, or 39.4% as a percentage of net sales, in the prior year period. The 1.1% increase in gross profit as a percentage of net sales was primarily due to lower input costs and improved leverage on plant expenses.

Adjusted Gross Profit for the three months ended March 31, 2026 was $139.6 million, or 46.9% as a percentage of net sales, compared to $120.2 million, or 45.7% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") were $116.3 million, or 39.1% as a percentage of net sales, for the three months ended March 31, 2026, compared to $115.3 million, or 43.8% as a percentage of net sales, in the prior year period. The decrease in SG&A as a percentage of net sales was primarily due to a decrease in non-recurring charges that occurred in the first quarter of 2025, partially offset by increased media spend.

Adjusted SG&A for the three months ended March 31, 2026 was $101.7 million, or 34.2% as a percentage of net sales, compared to $84.7 million, or 32.2% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below.

Income (Loss) from Operations

As a result of the factors discussed above, income from operations increased by $15.8 million to income from operations of $4.3 million for the three months ended March 31, 2026 as compared to loss from operations of $11.5 million in the prior year period.

Interest and Other Income, net

The Company recorded interest and other income, net of $2.9 million for the three months ended March 31, 2026 as a result of interest income generated from cash and cash equivalents as compared to $2.4 million in the prior year period.

Interest Expense

Interest expense increased $0.1 million to $3.6 million for the three months ended March 31, 2026 as compared to $3.5 million in the prior year period. The increase was driven by $0.1 million of additional interest expense related to a finance lease liability.

Gain on Equity Investment

The $62.0 million gain on equity investment for the three months ended March 31, 2026, resulted from the sale of the Company's non-controlling interest in a privately held company following the equity investment's acquisition by a third party, as discussed in Note 1 of our (unaudited) condensed consolidated financial statements.

Income Tax Expense

Income tax expense increased $17.0 million to $17.1 million for the three months ended March 31, 2026 as compared to income tax expense of $0.1 million in the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment.

27

Table of Contents

Net Income (L

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

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in these forward-looking statements as a result of various factors, including those set forth in “Risk Factors.” The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements included elsewhere in this report.

For more information regarding our consolidated results and liquidity and capital resources for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2024 Annual Report on Form 10-K, which information is incorporated herein by reference.

Overview

Freshpet's mission is to elevate the way we feed our pets with fresh food that nourishes all. We were inspired by the rapidly growing view among pet owners that their dogs and cats are a part of their family, leading them to demand healthier pet food choices. Since Freshpet's inception in 2006, we have created a comprehensive business model to deliver wholesome pet food that pet parents can trust, and in the process, we believe we have become one of the fastest growing pet food companies in North America. Our business model is difficult for others to replicate and we see significant opportunity for future growth by leveraging the unique elements of our business, including our brand, our product know-how, our Freshpet Kitchens, our refrigerated distribution, our Freshpet Fridges and our culture.

Components of our Results of Operations

Net Sales

Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are primarily sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 30,235 retail stores as of December 31, 2025. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances.

Our net sales growth strategy is driven by the following key factors:

•Increasing sales velocity from the average Freshpet Fridge due to increasing awareness, trial and adoption of Freshpet products and innovation. Our investments in marketing and advertising help to drive awareness and trial at each point of sale.

•Increasing distribution and penetration of Freshpet products in major classes of retail, including Grocery, Mass, International, Digital, Pet Specialty, and Club. The impact of new Freshpet Fridge installations on our net sales varies by retail class and depends on numerous factors including store traffic, refrigerator size, placement within the store, and proximity to other stores that carry our products. Digital orders include any purchases made online, including our direct-to-consumer business, and may also be fulfilled by our Freshpet Fridge network in brick and mortar stores.

•Consumer trends including long-term growth in pet ownership, pet humanization and a focus on health and wellness.

•At times we increase our sales price to offset any adverse movement in input costs.

Gross Profit

Our gross profit is net of costs of goods sold, which include the costs of product manufacturing, product ingredients, packaging materials and inbound freight, as well as depreciation and amortization and non-cash share-based compensation.

We expect to continue to mitigate any adverse movement in input costs through a combination of cost management and price increases.

30

Table of Contents

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist of the following:

Outbound freight. We use a third-party logistics provider for outbound freight that ships directly to retailers as well as third-party distributors.

Marketing & advertising. Our marketing and advertising expenses primarily consist of television advertising, digital, and social media channels. Our digital efforts span a range of platforms and environments, including company and retail websites, retail media networks, search engines, blogs, and online reviews. These expenses may vary from quarter to quarter depending on the timing of marketing and advertising campaigns.

Freshpet Fridge operating costs. Freshpet Fridge operating costs consist of repair costs and depreciation. The purchase and installation costs for new Freshpet Fridges are capitalized and depreciated over the estimated useful life. Freshpet Fridges purchased in 2025 are protected by a manufacturer warranty of five years, while those purchased prior to 2025 carry a three-year manufacturer warranty. We subsequently incur maintenance and freight costs for repairs and refurbishments handled by third-party service providers.

Research & development. Research and development costs consist of expenses to develop and test new products. The costs are expensed as incurred.

Brokerage. We use third-party brokers to assist with monitoring our products at the point-of-sale as well as representing us at headquarters for various customers. These brokers visit our retail customers’ store locations to ensure items are appropriately stocked and maintained.

Share-based compensation. The Company recognizes share-based compensation based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The Company estimates grant date fair value of its options using the Black-Scholes Merton option-pricing model. Service and performance based restricted stock units are measured based on the fair market value of the underlying stock on the dates of the grants whereas market based restricted stock units, such as total shareholder return awards, are measured using the Monte-Carlo simulation. Share awards are amortized under the straight-line method over the requisite service period of the entire award. The Company accounts for forfeitures as they occur.

Other general & administrative costs. Other general and administrative costs include non-plant personnel salaries and benefits, as well as corporate general & administrative costs.

Income Taxes

At December 31, 2024, the Company determined that a full valuation allowance against its $98.5 million of net deferred tax assets was appropriate. At December 31, 2025, the Company concluded that it was appropriate to release a majority of the valuation allowance against the $71.4 million of deferred tax assets recorded as of that date based on the weight of available evidence, which now supports the conclusion that it is more likely than not that the majority of deferred tax assets will be realized. Based on sustained profitability, including three-year cumulative income before taxes of $76.9 million, excluding the prior year gain on our equity investment, the significant deferred tax liabilities expected to reverse in future periods, and the projections of future taxable income sufficient to fully utilize the Company's federal and state NOLs, the positive evidence supporting the release of most of the valuation allowance outweighed the negative evidence supporting a full valuation allowance. As a result, we recognized a deferred income tax benefit of $68.8 million for the year ended December 31, 2025.

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Consolidated Statements of Income (Loss)

Year Ended

December 31,

2025

2024

2023

Amount

% of Net Sales

Amount

% of Net Sales

Amount

% of Net Sales

(Dollars in thousands)

Net sales

$

1,102,015 

100 

%

$

975,177 

100 

%

$

766,895 

100 

%

Cost of goods sold

652,389 

59 

%

579,221 

59 

%

516,023 

67 

%

Gross profit

449,626 

41 

%

395,956 

41 

%

250,872 

33 

%

Selling, general, and administrative expenses

373,954 

34 

%

357,957 

37 

%

281,318 

37 

%

Income (loss) from operations

75,672 

7 

%

37,999 

4 

%

(30,446)

(4)

%

Interest and other income, net

9,221 

1 

%

11,868 

1 

%

13,029 

2 

%

Interest expense

(14,120)

(1)

%

(12,262)

(1)

%

(14,097)

(2)

%

Gain on equity investment

— 

— 

%

9,918 

1 

%

— 

— 

%

Income (loss) before income taxes

70,773 

6 

%

47,523 

5 

%

(31,514)

(4)

%

Income tax (benefit) expense

(68,364)

(6)

%

598 

— 

%

210 

— 

%

Loss on equity method investment

— 

— 

%

— 

— 

%

1,890 

— 

%

Net income (loss)

$

139,137 

13 

%

$

46,925 

5 

%

$

(33,614)

(4)

%

Year Ended December 31, 2025 Compared To Year Ended December 31, 2024

Net Sales

The following table sets forth net sales by class of retailer:

Year Ended

December 31,

2025

2024

2023

Amount

% of Net Sales

Amount

% of Net Sales

Amount

% of Net Sales

(Dollars in thousands)

Grocery, Mass, International and Digital

$

892,941 

81 

%

$

800,775 

82 

%

$

642,306 

84 

%

Pet Specialty and Club

209,074 

19 

%

174,402 

18 

%

124,589 

16 

%

Net Sales

$

1,102,015 

100 

%

$

975,177 

100 

%

$

766,895 

100 

%

Net sales increased $126.8 million, or 13.0%, to $1,102.0 million for the year ended December 31, 2025 as compared to $975.2 million for the year ended December 31, 2024. The $126.8 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $92.2 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 12.0% and favorable price/mix of 1.0%.

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Gross Profit

Gross profit was $449.6 million, or 40.8% as a percentage of net sales, for the year ended December 31, 2025, compared to $396.0 million, or 40.6% as a percentage of net sales, in the prior year. The increase in gross profit as a percentage of net sales was primarily due to lower input costs and reduced quality costs, partially offset by reduced leverage on plant expenses.

Adjusted Gross Profit for the year ended December 31, 2025 was $515.2 million, or 46.7% as a percentage of net sales, compared to $453.5 million, or 46.5% as a percentage of net sales, in the prior year. See "—Non-GAAP Financial Measures" below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") were $374.0 million for the year ended December 31, 2025, compared to $358.0 million in the prior year. As a percentage of net sales, SG&A decreased to 33.9% for the year ended December 31, 2025, compared to 36.7% in the prior year. The decrease in SG&A as a percentage of net sales was primarily due to decreased share-based compensation, driven by the reversal of previously recorded expense in the current year related to performance-based conditions deemed improbable of achievement as of year end, and decreased variable compensation accrual, partially offset by increased media spend as a percentage of net sales and higher non-recurring charges in 2025.

Adjusted SG&A for the year ended December 31, 2025, was $319.4 million, or 29.0% as a percentage of net sales, compared to $291.6 million, or 29.9% as a percentage of net sales, in the prior year. See "—Non-GAAP Financial Measures" below.

Income from Operations

As a result of the factors discussed above, income from operations increased by $37.7 million to $75.7 million for the year ended December 31, 2025 as compared to $38.0 million in the prior year.

Interest and Other Income, net

The Company recorded interest and other income, net of $9.2 million for the year ended December 31, 2025 as a result of interest income generated from cash and cash equivalents as compared to $11.9 million in the prior year.

Interest Expense

Interest expense increased $1.9 million to $14.1 million for the year ended December 31, 2025 as compared to $12.3 million in the prior year. The increase was primarily driven by a $1.6 million decrease in capitalized interest compared to the prior year period as a result of assets placed into service.

Gain on Equity Investment

The $9.9 million gain on equity investment for the year ended December 31, 2024 resulted from the change in fair value of the Company's equity interest in a privately held company, as discussed in Note 1 - Summary of Significant Accounting Policies of our consolidated financial statements.

Income Tax (Benefit) Expense

Income tax benefit increased $69.0 million to $68.4 million for the year ended December 31, 2025 as compared to income tax expense of $0.6 million in the prior year. The increase is primarily due to the deferred income tax benefit resulting from the release of the valuation allowance in 2025, partially offset by deferred income tax expense.

Net Income

Net income increased $92.2 million to net income of $139.1 million for the year ended December 31, 2025 as compared to net income of $46.9 million in the prior year, due to the deferred income tax benefit resulting from the release of the valuation allowance as a result of sustained profitability and the expected future profitability, and contributions from higher sales, partially offset by increased SG&A expenses, including increased media spend of $29.2 million and $17.7 million of non-recurring charges in 2025, compared to a $9.9 million gain on equity investment in the prior year.

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Adjusted EBITDA

Adjusted EBITDA was $195.7 million for the year ended December 31, 2025, compared to $161.8 million, in the prior year. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See "—Non-GAAP Financial Measures" below.

Non-GAAP Financial Measures

Freshpet uses the following non-GAAP financial measures in its financial communications. These non-GAAP financial measures should be considered as supplements to the U.S. GAAP reported measures, should not be considered replacements for, or superior to, the U.S. GAAP measures and may not be comparable to similarly named measures used by other companies.

•Adjusted Gross Profit

•Adjusted Gross Profit as a percentage of net sales (Adjusted Gross Margin)

•Adjusted SG&A Expenses

•Adjusted SG&A Expenses as a percentage of net sales

•EBITDA

•Adjusted EBITDA

•Adjusted EBITDA as a percentage of net sales (Adjusted EBITDA Margin)

Such financial measures are not financial measures prepared in accordance with U.S. GAAP. We define Adjusted Gross Profit as Gross Profit before depreciation expense, non-cash share-based compensation, and loss on disposal of manufacturing equipment. We define Adjusted SG&A as SG&A expenses before depreciation and amortization expense, non-cash share-based compensation, loss on disposal of equipment, distributor transition costs, legal obligation and international business charges. EBITDA represents net income (loss) plus depreciation and amortization expense, interest expense net of interest income and, income tax (benefit) expense. Adjusted EBITDA represents EBITDA less gain on equity investment, plus non-cash share-based compensation expense, loss on disposal of property, plant and equipment, distributor transition costs, legal obligation, and international business charges.

We believe that each of these non-GAAP financial measures provide additional metrics to evaluate our operations and, when considered with both our U.S. GAAP results and the reconciliation to the closest comparable U.S. GAAP measures, provides a more complete understanding of our business than could be obtained absent this disclosure. We use the non-GAAP financial measures, together with U.S. GAAP financial measures, such as net sales, gross profit margins and cash flow from operations, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance, and to compare our performance to that of our peers and competitors.

Adjusted EBITDA is also an important component of internal budgeting and setting management compensation.

The non-GAAP financial measures are presented here because we believe they are useful to investors in assessing the operating performance of our business without the effect of non-cash items, and other items as detailed herein. The non-GAAP financial measures should not be considered in isolation or as alternatives to net income (loss), income (loss) from operations or any other measure of financial performance calculated and prescribed in accordance with U.S. GAAP. Neither EBITDA nor Adjusted EBITDA should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our non-GAAP financial measures may not be comparable to similarly titled measures in other organizations because other organizations may not calculate non-GAAP financial measures in the same manner as we do.

Our presentation of the non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items. We recognize that the non-GAAP financial measures have limitations as analytical financial measures. For example, the non-GAAP financial measures do not reflect:

•our capital expenditures or future requirements for capital expenditures;

•the interest expense, or the cash requirements necessary to service interest expense or principal payments, associated with indebtedness;

•depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, nor any cash requirements for such replacements; and

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•changes in our cash requirements for our working capital needs.

Additionally, Adjusted EBITDA excludes (i) non-cash share-based compensation expense, which is and will remain a key element of our overall long-term incentive compensation package, and (ii) certain costs essential to our sales growth and strategy. Adjusted EBITDA also excludes certain cash charges resulting from matters we consider not to be indicative of our ongoing operations. Other companies in our industry may calculate the non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable financial measure presented in accordance with U.S. GAAP:

Year Ended

December 31,

2025

2024

2023

(Dollars in thousands)

Net income (loss)

$

139,137 

$

46,925 

$

(33,614)

Depreciation and amortization

86,872 

70,803 

57,058 

Interest expense, net of interest income

4,887 

335 

1,069 

Income tax (benefit) expense

(68,364)

598 

210 

EBITDA

162,532 

118,661 

24,723 

Non-cash share-based compensation (a)

13,883 

51,807 

24,936 

Loss on disposal of property, plant and equipment

1,630 

1,284 

4,321 

Distributor transition costs (b)

10,680 

— 

— 

Legal obligation (c)

5,703 

— 

— 

International business charges (d)

1,273 

— 

— 

Gain on equity investment

— 

(9,918)

— 

Loss on equity method investment

— 

— 

1,890 

Enterprise Resource Planning

— 

— 

2,457 

Capped Call Transactions fees

— 

— 

113 

Shareholder activism defense engagement

— 

— 

8,177 

Organization changes

— 

— 

(67)

Adjusted EBITDA

$

195,701 

$

161,834 

$

66,550 

Adjusted EBITDA as a % of Net Sales

17.8 

%

16.6 

%

8.7 

%

(a)Includes true-ups to share-based compensation expense. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

(b)Represents a non-recurring loss as a result of an accounts receivable write-off in connection with the liquidation of one of our pet specialty distributors. Concurrent with its liquidation, we transitioned to a new distribution partner, who is a leading pet specialty distributor and who we anticipate will facilitate sales to pet specialty stores. Thus, despite the transitory impact during the first quarter of 2025, our ability to continue to generate sales is consistent with what we would expect to generate within the pet specialty channel.

(c)Represents the net settlement charges for all claims related to the litigation with Phillips.

(d)Represents termination costs due to a business change in our international go-to-market strategy.

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The following table provides a reconciliation of Adjusted Gross Profit to Gross Profit, the most directly comparable financial measure presented in accordance with U.S. GAAP:

Year Ended

December 31,

2025

2024

2023

(Dollars in thousands)

Gross profit

$

449,626 

$

395,956 

$

250,872 

Depreciation expense

61,426 

49,056 

41,209 

Non-cash share-based compensation

3,078 

7,761 

10,995 

Loss on disposal of manufacturing equipment

1,020 

696 

3,547 

Adjusted Gross Profit

$

515,150 

$

453,469 

$

306,623 

Adjusted Gross Profit as a % of Net Sales

46.7 

%

46.5 

%

40.0 

%

The following table provides a reconciliation of Adjusted SG&A Expenses to SG&A Expenses, the most directly comparable financial measure presented in accordance with U.S. GAAP:

Year Ended

December 31,

2025

2024

2023

(Dollars in thousands)

SG&A expenses

$

373,954 

$

357,957 

$

281,318 

Depreciation and amortization expense

25,446 

21,747 

15,849 

Non-cash share-based compensation (a)

10,805 

44,046 

13,941 

Loss on disposal of equipment

610 

588 

774 

Distributor transition costs (b)

10,680 

— 

— 

Legal obligation (c)

5,703 

— 

— 

International business charges (d)

1,273 

— 

— 

Enterprise Resource Planning

— 

— 

2,457 

Capped Call Transactions fees

— 

— 

113 

Shareholder activism defense engagement

— 

— 

8,177 

Organization changes

— 

— 

(67)

Adjusted SG&A Expenses

$

319,437 

$

291,576 

$

240,074 

Adjusted SG&A Expenses as a % of Net Sales

29.0 

%

29.9 

%

31.3 

%

(a)Includes true-ups to share-based compensation expense. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed.

(b)Represents a non-recurring loss as a result of an accounts receivable write-off in connection with the liquidation of one of our pet specialty distributors. Concurrent with its liquidation, we transitioned to a new distribution partner, who is a leading pet specialty distributor and who we anticipate will facilitate sales to pet specialty stores. Thus, despite the transitory impact during the first quarter of 2025, our ability to continue to generate sales is consistent with what we would expect to generate within the pet specialty channel.

(c)Represents the net settlement charges for all claims related to the litigation with Phillips.

(d)Represents termination costs due to a business change in our international go-to-market strategy.

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Liquidity and Capital Resources

To meet our capital needs, we issued approximately $402.5 million in convertible notes in March 2023 (the "Convertible Notes"), used $66.2 million of the proceeds to enter into capped call transactions, and used $11.0 million of the proceeds on debt issuance related costs.

We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During fiscal year 2025, we spent approximately $148.2 million of capital to meet our capacity needs as well as recurring capital expenditures. In fiscal year 2026, we expect to spend approximately $150.0 million.

We expect to rely on our current and future cash flow from operations, may issue additional debt, and/or raise capital through our access to capital markets, if appropriate. Our ability to obtain additional funding will be subject to various factors, including general economic and market conditions, our operating performance, the market's perception of our growth potential, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions.

Our ability to make future minimum interest payments on the Convertible Notes, to refinance any indebtedness and to fund any necessary expenditures for our growth will depend on our ability to generate cash in the future. If our business does not achieve the levels of profitability or generate the amount of cash that we anticipate or if we expand faster than anticipated, we may need to seek additional debt or equity financing to operate and expand our business. Future third-party financing may not be available on favorable terms or at all.

Our primary cash needs, in addition to our plant expansions, are for purchasing ingredients, operating expenses, marketing expenses and capital expenditures to procure Freshpet Fridges. We believe that cash and cash equivalents, expected cash flow from operations, amounts previously raised through the issuance of the Convertible Notes and our ability to access the capital markets, if appropriate, are adequate to fund our debt service requirements, operating and finance lease obligations, capital expenditures and working capital obligations for the foreseeable future. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow from operations and our ability to manage costs and working capital successfully.

Additionally, our cash flow generation ability is subject to general economic factors at the international, national and regional levels, including but not limited to increased interest rates and inflation, tariffs, trade wars, recession, financial, competitive, legislative and regulatory factors and other factors that are beyond our control, including government or regulatory shutdowns or defunding, or disruptions with or increased costs imposed by our key suppliers or others within our supply chain. Further, such macroeconomic factors could negatively impact consumer sentiment, resulting in reduced demand and changes in purchasing behaviors for some or all of our products and other relevant factors, such as consumer hesitancy to trade up in pet food, deferral of pet-related expenses, and reduced pet adoption rates. While these factors are expected to persist in the near term, the Company has implemented strategic initiatives, including targeted marketing, value-focused product innovation, and expanded distribution in club and mass channels, to mitigate their impact. Management believes these actions will support continued growth and margin expansion, even if the current economic environment remains unchanged. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs.

Expanding certain of our Freshpet Kitchens primarily comprises our material future cash requirement. The Company reduced its capital expenditures for manufacturing expansion during 2025, reflecting both a moderation in demand and significant operational efficiencies. These changes are expected to materially improve near-term cash flow and reduce the capital intensity of the business, while maintaining flexibility to scale as market conditions evolve. However, our capital requirements, including our cash requirements, may vary materially from those currently planned if, for example, our revenues do not reach expected levels, or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may seek alternative financing, such as issuing additional debt or equity securities, and we cannot assure you that we will be able to do so on favorable terms, if at all. Moreover, if we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity or if the Convertible Notes are converted to common shares, existing stockholders may experience dilution, and such new securities could have rights senior to those of our common stock. These factors may make the timing, amount, terms and conditions of additional financing unattractive.

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Our inability to raise capital could impede our growth or otherwise require us to forego growth opportunities and could materially adversely affect our business, financial condition and results of operations.

The following table sets forth, for the periods indicated, our working capital:

December 31,

December 31,

2025

2024

(Dollars in thousands)

Cash and cash equivalents

$

277,975 

$

268,633 

Accounts receivable, net of allowance for doubtful accounts

63,762 

68,419 

Inventories, net

76,766 

80,794 

Prepaid expenses

9,807 

16,026 

Other current assets

7,404 

3,126 

Accounts payable

(42,429)

(39,164)

Accrued expenses

(31,610)

(56,263)

Current operating lease liabilities

(2,241)

(1,322)

Current finance lease liabilities

(2,315)

(2,120)

Total Working Capital

$

357,119 

$

338,129 

Working capital consists of current assets net of current liabilities. Working capital increased $19.0 million to $357.1 for the year ended December 31, 2025 compared to working capital of $338.1 million for the year ended December 31, 2024, primarily as a result of an increase of $9.3 million in cash and cash equivalents, an increase of $4.3 million in other current assets, and a decrease of $24.7 million in accrued expenses as a result of decreased variable compensation accrual. The increase was partially offset by a decrease of $4.7 million in accounts receivable, a decrease of $4.0 million in inventories, net, a decrease of $6.2 million in prepaid expenses, an increase of $3.3 million in accounts payable, and an increase of $1.1 million in lease liabilities.

We normally carry three to five weeks of finished goods inventory and less than 30 days of accounts receivable.

As of December 31, 2025, our capital resources consisted primarily of $278.0 million of cash and cash equivalents on hand.

As of December 31, 2024, our capital resources consisted primarily of $268.6 million of cash and cash equivalents on hand.

We expect to fund our ongoing operations and obligations with cash and cash equivalents, and cash flow from operations.

The following table sets forth, for the periods indicated, our beginning balance of cash, net cash flows provided by (used in) operating, investing and financing activities and our ending balance of cash.

Year Ended

December 31,

2025

2024

(Dollars in thousands)

Cash at the beginning of period

$

268,633 

$

296,871 

Net cash provided by operating activities

160,561 

154,288 

Net cash used in investing activities

(148,184)

(187,092)

Net cash (used in) provided by financing activities

(3,035)

4,566 

Cash at the end of period

$

277,975 

$

268,633 

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Net Cash Provided by Operating Activities

Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items (i.e., provision for loss on accounts receivable, loss on disposal of property, plant and equipment, share-based compensation, change in reserve for inventory obsolescence, depreciation and amortization, amortization of deferred financing costs, change in operating lease right of use asset, change in deferred income taxes, and gain on equity investment).

2025

Net cash provided by operating activities of $160.6 million in 2025 was primarily attributed to:

•$192.8 million of net income, adjusted for reconciling non-cash items, which excludes $53.7 million of non-cash items related to $68.8 million of deferred income tax benefit, $89.7 million of depreciation and amortization, $12.1 million of provision for loss on accounts receivable, $13.9 million of share-based compensation, $2.2 million of amortization of deferred financing costs, $2.2 million of loss on disposal of property, plant and equipment, and $2.3 million of change in operating lease right of use asset.

This was partially offset by:

•$32.2 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accounts receivable, prepaid expenses and other current assets, other assets, accrued expenses, and operating lease liability, partially offset by the change in inventories and accounts payable.

2024

Net cash provided by operating activities of $154.3 million in 2024 was primarily attributed to:

•$168.0 million of net income, adjusted for reconciling non-cash items, which excludes $121.0 million of non-cash items related to $73.6 million of depreciation and amortization, $51.8 million of share-based compensation including amortization of warrants, $2.1 million of amortization of deferred financing costs, $1.4 million of change in operating lease right of use asset, $1.3 million of loss on disposal of property, plant and equipment, $0.3 million of a reserve for inventory obsolescence, $0.5 million of provision for loss on accounts receivable, partially offset by $9.9 million of gain on equity investment.

This was partially offset by:

•$13.7 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accounts receivable, inventories, other assets, and operating lease liability, partially offset by the change in accounts payable, accrued expenses, and prepaid expenses and other current assets.

Net Cash Used in Investing Activities

2025

Net cash used in investing activities of $148.2 million in 2025 was primarily attributed to:

•$148.2 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

2024

Net cash used in investing activities of $187.1 million in 2024 was primarily attributed to:

•$187.1 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend.

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Net Cash (Used In) Provided by Financing Activities

2025

Net cash used in financing activities of $3.0 million in 2025 was primarily attributed to:

•$3.0 million for tax withholdings related to net share settlements of restricted stock units.

•$2.1 million for principal payments under finance lease obligations.

This was partially offset by:

•$2.1 million cash proceeds from the exercise of stock options.

2024

Net cash provided by financing activities of $4.6 million in 2024 was primarily attributed to:

•$9.1 million cash proceeds from the exercise of stock options.

This was partially offset by:

•$2.6 million for tax withholdings related to net share settlements of restricted stock units.

•$2.0 million for principal payments under finance lease obligations.

Indebtedness

For a discussion of our material indebtedness, see Note 6 and 7 to our Consolidated Financial Statements included in this report.

Critical Accounting Estimates and Policies

Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the revenue and expenses incurred during the reported periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting estimates and policies are described in the notes to our financial statements appearing in this report, we believe that the following critical accounting estimates and policies are most important to understanding and evaluating our reported financial results.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of net sales and expenses during the reporting period.

We believe that the accounting estimates policies discussed below are critical to understanding our historical and future performance, as these policies related to the more significant areas involving management’s judgments and estimates. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. Actual results, as determined at a later date, could differ from those estimates. To the extent that there are differences between our estimate and the actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

The following critical accounting policies reflect significant judgments and estimates used in preparation of our consolidated financial statements:

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Revenue Recognition and Incentives—Revenue is recognized when performance obligations under the terms of the contract with the customer are satisfied, which occurs once control is transferred upon delivery to the customer.

Revenue is reported net of applicable trade incentives and allowances. Amounts billed and due from our customers are classified as receivables and require payment on a short-term basis and, therefore, we do not have any significant financing components.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, including estimates of trade incentives the Company offers to its customers and their consumers. Trade incentives consist primarily of customer pricing allowances and merchandising funds, and consumer coupons offered through various programs to customers and consumers. Estimates of trade promotion expense and coupon redemption costs are based upon programs offered, timing of those offers, estimated redemption/usage rates from historical performance, management’s experience and current economic trends.

While our revenue recognition does not involve significant judgment, it represents a significant accounting policy.

Share-based Compensation—The Company recognizes share-based compensation based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The Company estimates grant date fair value of its options using the Black-Scholes Merton option-pricing model. Service and performance based restricted stock units are measured based on the fair market value of the underlying stock on the dates of the grants whereas market based restricted stock units, such as total shareholder return awards, are measured using the Monte-Carlo simulation. Share awards are amortized under the straight-line method over the requisite service period of the entire award. Certain awards provide for accelerated vesting upon retirement if age and service conditions are met. When an employee is retirement‑eligible (or becomes eligible during the vesting period), the Company recognizes compensation cost for the portion of the award for which the requisite service period has been rendered, resulting in accelerated expense recognition. The Company accounts for forfeitures as they occur.

We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting, with such target periods through fiscal year 2027. We recognize the estimated fair value of performance-based awards as share-based compensation expense over the performance period based upon our determination of whether it is probable that the performance targets will be achieved. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed. Determining whether the performance criteria will be achieved involves judgment, and the share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance criteria. Revisions are reflected in the period in which the probability assessment is changed.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1 (Summary of Significant Accounting Policies) to our audited consolidated financial statements included in this report.

Segment

The Company operates in one consolidated operating and reportable segment: the manufacturing, marketing and distribution of fresh dog food, cat food, and dog treats.

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