Shares of Jones Soda Co. JSDA have fallen 6.3% since reporting second-quarter 2026 results compared with a 0.4% decline in the S&P 500 index. Over the past month, the stock has lost 0.9%, while the S&P 500 has returned 2.7%.
Revenue & Earnings Performance
Second-quarter net revenues surged 107.8% to $10.2 million from $4.9 million a year earlier. Jones Soda posted a net loss of $650,000, or a loss of 1 cent per share, reversing net income of $2.6 million, or 2 cents per share, in the prior-year quarter. The comparison was skewed by a $3.7 million gain on the 2025 disposition of the company’s cannabis subsidiaries. Adjusted EBITDA loss from continuing operations narrowed to $312,000 from $739,000 in the prior-year quarter.
Collaboration Sales Lift Beverage Segment
Jones Soda has one reportable segment, beverage. Growth was primarily driven by higher volumes of Fallout-branded products sold through club retailers and direct-to-consumer channels. U.S. net sales rose to $7.5 million from $4 million, while Canadian sales increased to $2.6 million from $876,000.
The company also launched its Zero Sugar craft soda lineup in Western Canadian club stores. Management said that the initial order sold quickly and generated a reorder, supporting plans to pursue wider distribution. Fallout limited-edition rocket bottles also sold out rapidly, while a relaunched Crayola collection added a Fruit Punch flavor for the back-to-school season.
Not all categories contributed. HD9 sales dropped to $100,000 from $900,000 as regulatory uncertainty weighed on the hemp-derived beverage market. CEO Scott Harvey acknowledged that modern soda and adult beverage had developed more slowly than expected and said investment would be directed toward opportunities offering stronger growth and returns.
Freight Costs Weigh on Margins
Gross profit increased 72% year over year to $2.8 million from $1.6 million on higher sales, but the gross margin fell 580 basis points to 27.5% from 33.3%. Management attributed the compression mainly to higher freight charges tied to elevated oil prices.
Jones Soda completed a freight-lane bidding process in May, producing rate reductions of 10% to 36% across key U.S. regions beginning in June. Management expects the second-half gross margin to return to the 30% range, assuming West Texas Intermediate oil prices remain near $80 per barrel.
Total operating expenses rose to $3.3 million from $2.4 million in the prior-year quarter. Selling and marketing expenses increased 79% year over year to $1.9 million, mainly because of Fallout royalties, broker fees and promotional spending. However, these expenses declined to 18.7% of revenues from 21.7%. General and administrative expenses moved up to $1.4 million from $1.3 million but fell to 13.9% of revenues from 27.1%. Consequently, the operating loss narrowed to $525,000 from $760,000.
Shipment Timing Masks Underlying Demand
Approximately $2 million of anticipated shipments moved from the second quarter into July. Management estimated that, at the reported gross margin, those sales would have added about $550,000 to adjusted EBITDA. The company said that all the delayed shipments were completed in July.
Harvey described core craft soda as the company’s foundation, with Zero Sugar products, branded collaborations and direct-to-consumer sales providing expansion avenues. Jones Soda also plans website improvements and has transitioned to a new fulfillment provider to support e-commerce. A Rap Snacks collaboration announced after the quarter-end is expected to begin contributing to revenues in fiscal 2027.
Cash Position Remains a Constraint
Cash declined to $2.4 million as of June 30 from $3.6 million as of Dec. 31, 2025, while inventories increased to $4.7 million from $2.7 million to support sales growth. First-half cash used in continuing operations rose to $2.9 million from $2.6 million, and the company reported a working-capital deficit of about $500,000.
Operational indicators improved: days sales outstanding fell to 29.4 from 78.4 a year earlier, inventory turnover rose to 6.8 times from 2.8 times, and days payable declined to roughly 60 from 122. After the quarter-end, two private placements generated $1.9 million in gross proceeds.
Management Raises 2026 Outlook
Jones Soda raised its fiscal 2026 net revenue growth forecast to at least 80% from 60%, implying revenues above $45 million, and introduced guidance for positive full-year adjusted EBITDA. Management expects the delayed shipments to help make the third quarter one of the company’s strongest, while lower freight costs and operating leverage underpin the profitability target.
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Jones Soda Co. (JSDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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