Once Upon A Farm, PBC

What they do

The company develops, markets and sells branded food and drink products for babies and young children, including refrigerated pouches and cooler-based assortments. It sells through retail distribution, including grocery and club channels, and supports the brand with trade programs and in-store fixtures. Management describes the company as a high-growth business pursuing improvement in childhood nutrition, headquartered in Berkeley, California.

Revenue drivers

• Existing product distribution — Second quarter 2026 net sales rose 42.3% to $85.4 million, driven primarily by a 40.3% increase in volume reflecting incremental distribution of existing products.
• New product launches — Volume growth also reflected new product introductions, which management describes as highly incremental to the brand and to the categories in which it competes.
• Cooler-based assortments — Management cited increasing cooler productivity, broadening assortments and maturing cooler cohorts as contributors to consumption trends; slotting fees related to coolers fell, partly offsetting gross margin pressure.
• Club channel programs — Trade spend, including a national program in the club channel, weighed on gross margin in the second quarter of 2026, indicating club is a meaningful and promotion-intensive channel.

Recent performance

Second quarter 2026 net sales increased 42.3% to $85.4 million from $60.0 million a year earlier, with volume up 40.3%. Gross margin fell to 35.9% from 40.7%, a 485 basis point decline driven by trade spend including a national club channel program and mix, partly offset by pricing and lower cooler slotting fees. SG&A rose to $36.3 million from $24.4 million, including approximately $3.5 million of stock-based compensation and IPO-related performance payments. Net loss narrowed to $5.0 million from $9.0 million, while Adjusted EBITDA swung to a loss of $1.7 million from positive $2.0 million, primarily on higher SG&A.

Strategy

Management says it is pursuing volume-led, high-quality growth through distribution expansion, innovation and increased household penetration, repeat and buy rate. The company completed an IPO in February 2026, applying proceeds to eliminate debt; it reported cash and cash equivalents of $93.5 million and no debt as of June 30, 2026, versus $10.9 million of cash and $60.2 million of total debt at December 31, 2025. Priorities include broadening cooler assortments and maturing cooler cohorts, alongside continued product innovation. Management frames this combination of expanding household reach, consumer loyalty and productivity as the basis for durable growth and long-term profitability.

Risks

• Gross margin compression — Gross margin fell 485 basis points year over year to 35.9% in the second quarter of 2026 on trade spend, including a national club channel program, and unfavorable mix.
• SG&A growth outpacing sales — SG&A rose to $36.3 million, or 42.5% of net sales, from $24.4 million, driven by stock-based compensation, IPO-related performance payments, and higher marketing, labor and employee costs.
• Profitability swing to Adjusted EBITDA loss — Adjusted EBITDA moved from $2.0 million positive in the prior-year quarter to a $1.7 million loss in the second quarter of 2026, primarily on higher SG&A.
• Product contamination and recall exposure — The company's risk factors cite adverse public relations, product recalls and product liability claims if products are contaminated, alleged to be contaminated, rumored to have adverse effects, or alleged to cause illness or injury.

Outlook

For full year 2026, management expects net sales of $327 million to $335 million, representing growth of 36% to 39% versus 2025. It also raised its 2026 Adjusted EBITDA outlook to $3 million to $4.5 million. The outlook is based on information as of August 6, 2026 and may be impacted by factors outside the company's control.