Jones Soda Earnings Break Even in Q1, Revenues Surge 194%

Shares of Jones Soda Co. JSDA have risen 1.6% since the company reported its first-quarter 2026 results, outperforming the S&P 500 Index’s 0.3% gain over the same period. Over the past month, the stock has advanced 7.5% compared with a 4.5% jump for the broader market benchmark.Jones Soda reported first-quarter 2026 revenues of $12.4 million, up 193.9% from $4.2 million in the prior-year quarter, driven primarily by strong sales of Fallout-branded products through the company’s club channel. Gross profit rose 179.4% year over year to $3.9 million, while gross margin narrowed 160 basis points to 31.3% from 32.9%. The company posted net income from continuing operations of $115,000, or breakeven per share, compared to a loss from continuing operations of $1.1 million, or 1 cent per share, a year earlier. Total operating expenses climbed to $3.5 million from $2.3 million in the prior-year period.Jones Soda Co. Price, Consensus and EPS Surprise Jones Soda Co. price-consensus-eps-surprise-chart | Jones Soda Co. QuoteJSDA’s Business Performance and Key MetricsThe quarter marked a notable turnaround for Jones Soda as the company achieved positive GAAP net income profitability while continuing to scale its branded collaboration platform. Fallout-related products were the primary growth driver, with management citing stronger-than-expected consumer demand and solid sell-through across club store channels in North America. Revenues tied to hemp-derived Delta-9 THC products, however, declined to roughly $0.2 million from $0.9 million in the year-earlier quarter as the company adjusted to increasing regulatory uncertainty surrounding hemp-derived beverages.Trade spend and promotional allowances increased to about $1.4 million from $0.7 million, reflecting higher Fallout-related sales activity. Despite the increase, trade spend declined as a percentage of gross revenues to 9.5% from 13.5% a year ago. Selling and marketing expenses rose 82.9% to approximately $2 million, mainly due to higher broker and royalty payments associated with Fallout product sales. General and administrative expenses increased to $1.5 million from $1.2 million, largely because of higher salary and benefit costs.Adjusted EBITDA from continuing operations improved to $0.6 million from a loss of $1.1 million in the prior-year period, marking the company’s second consecutive quarter of positive adjusted EBITDA. Management said that the business has now reached a scale where quarterly sales above $10 million can support adjusted EBITDA profitability.JSDA: Management Commentary and Strategic InitiativesCEO Scott Harvey described the quarter as a “meaningful inflection point” for Jones Soda, citing improvements in operational execution, branded partnerships and retailer engagement. Management emphasized that Fallout collaborations are not expected to be one-time promotional events but instead part of a repeatable commercialization platform capable of generating future retailer programs and incremental sales opportunities.The company continued expanding its retail footprint during and after the quarter. Jones Soda introduced new four-pack offerings in 650 high-volume Walmart locations across the United States and expanded Canadian distribution through an additional 700 Circle K stores, bringing total distribution in that chain to roughly 1,750 locations nationally. Management also highlighted collaborations involving Crayola and Folds of Honor as part of broader efforts to increase consumer engagement and retailer relationships.Jones Soda also continued investing in its Pop Jones modern soda brand, targeting the growing functional and “better-for-you” beverage category. Management said that it remains focused on improving retail placement, increasing product velocity and refining retail activation strategies within the highly competitive segment.JSDA’s Margin Trends, Liquidity and GuidanceWhile revenue growth remained strong, gross margin pressure reflected the reduced contribution from higher-margin HD9 products. Management said that it is pursuing cost reductions with suppliers and warehouse providers and expects margin improvements later in 2026 as production volumes increase. The company also flagged potential freight cost pressures stemming from higher fuel prices later in the year.Jones Soda ended the quarter with cash and cash equivalents of $4.4 million compared with $3.6 million at the end of 2025. Operating cash usage improved to $0.8 million from $1.9 million a year earlier. The company maintained its full-year 2026 guidance, expecting revenue growth to exceed 60% over 2025 levels and forecasting annual revenues above $40 million. Management also indicated there could be upside from new partnerships and product innovations later in the year.Other Developments at JSDADuring the quarter, Jones Soda continued to transition away from its former cannabis beverage operations following the 2025 sale of its cannabis subsidiaries to MJ Reg. The company retained rights to hemp-based products while licensing certain cannabis-related intellectual property under a long-term agreement. In January 2026, Jones Soda assigned a $2 million promissory note tied to that divestiture to Two Shores Capital Corp. in exchange for $1.4 million in cash proceeds and issued 550,000 warrants as part of the transaction.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. 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