Q2 2025 Beyond Meat Inc Earnings Call
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Thank you, everyone and welcome to the beyond meat Inc. 2025 second quarter conference call.
At this time, all participants are in a listen-only mode later. You'll have the opportunity to ask a question during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad.
Please note today's call will be recorded, and we will be standing by if you should need any assistance.
It is now my pleasure to turn today's conference over to Paul Shepard vice president of fpna and investor relations.
Thank you. Hello everyone. And thank you for your participation. In today's call joining me are Ethan, Brown founder, president and chief executive officer and bluebee kutsu Chief Financial Officer and treasurer.
Section of Beyond meat's website at www.beyond.com.
Before we begin, please note that all the information presented today is UN-audited, and that during the course of this call, management may make forward-looking statements within the meaning of the federal Securities laws.
these statements are based on Management's, current expectations, and beliefs, and involve risks, and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements,
Or with looking statements in our earnings release, along with the comments on this call, and made only as of today, and will not be updated as actual events unfold. We refer you to today's press release, our quarterly report on Form 10-Q for the quarter ended June 28, 2025, to be filed with the SEC, and our annual report on Form 10-K for the fiscal year ended December 31, 2024, along with other filings for the SEC, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements today.
please also note that on today's call management May reference adjusted evida adjusted last from operations and adjusted net loss, which are non-gaap Financial measures
Well, we believe these non-GAAP financial measures provide useful information for investors. Any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
Please refer to today's press release for a Reconciliation of these non-gaap Financial measures to their most comparable gaap measures.
And with that, I would now like to turn the call over to Ethan Brown.
Thank you Paul. Good afternoon, everyone.
We are disappointed with our second quarter results, which reflect ongoing softness in the plant-based meat category. Particularly us retail Channel, and certain International Food, Service segments,
Before diving into details on the quarter. This level disruption to a recovery requires broader competitor.
Though we saw a return to Topline growth in the back half of 2024, the first 2 quarters of this year, indicate the need for fundamental reset for our brand and category.
To stabilize our business and with a goal to achieve ibida positive operations within the second half of 2026.
And to realize our much longer term objective of reshaping Global protein markets in support of a healthier and more sustainable future.
We are taking significant and immediate actions.
Many of these, which I numerate below, you will recognize as an acceleration of existing priorities.
1, we are welcome in John, boken of Alex Partners as interim, Chief transformation officer to lead and support our enterprise-wide transformation activities.
With a focus on operating expense reduction.
Gross, margin expansion and broader operational efficiency.
2. We are intensifying expense reduction globally to fit our operating base at the existing near-term opportunity.
These measures include a reduction in force that we performed today.
Or proceeding. I want to thank each of the impacted teammates and acknowledge their tremendous contributions to our company Mission and consumers.
It is truly with heavy hearts that we may these reductions and by Deep appreciation and respect for these teammates and Friends, extends far beyond any comments I can make today.
3 we are deepening. Each of our gross margin expansion activities, including
Continuing to optimize our portfolio by exiting certain product lines and reconfiguring others.
Making additional investments in our facilities, around core production miles and select others, where we see opportunities to significantly reduce costs.
Working with our supply chain, to reduce raw ingredient prices logistic costs.
And further fitting our production operations into concurrent demand levels. So, as to realize gross marginal recovery, even under lower volumes,
Or we are actively pursuing expanded distribution of our core products and expect to bring on new US retail distribution including in the balance of this year.
5 going forward. We intend to increase in the use Beyond as the primary brand is in a buyer.
We have been formally using the shortened Market of certain instances for some time now and believe it provides for reduced emphasis on faksimile. But now complicated frame that overshadows the real high-quality protein offerings to provide to Consumers.
so we have the freedom to as and when appropriate to do so meet broader consumer, protein needs
Our Limited Test offering of Beyond ground our social channels, last week represented early foray, Beyond Beef, Pork and culty replication.
And has been met with considerable enthusiasm albeit with a very narrow consumer set.
In the coming months, we will provide additional details of our crease use of the brand Mark Beyond which we implemented on a rolling basis.
6, We are continuing to intently focus on strengthening our balance sheet to address our 2027. Convertible note maturity.
With this high level context, a clear and comprehensive action plan in place.
Including especially appointed interim, Chief transformation officer.
Deeper operating expense reduction.
Increased focus on gross margin expansion. Across our core product lives, the implementation of new US, retail distribution for core product lines. The kickoff of a rolling brand repositioning
Continued heightened focus on strengthening our balance sheet. I'll now turn to select details from our second quarter of 2025.
Net revenue for the quarter came in at 75 million.
Go below our expectations and down 20% versus the year ago, period, a far cry from the recovery in renewed year-over-year growth. We experienced a second half last year.
The US retail Channel represented a large share of the shortfall relative to expectations.
I believe at least several factors are our foot.
1.
Broadly will remain a higher priced product than the animal protein. Equivalent a feature that is particularly detrimental in a prolonged environment of tepid consumer spending.
2. It is clear that the negative narratives surrounding our category and brand is sufficiently ingrained to outlast, initial efforts to dispel misinformation.
3 animal meats are in the true sick of the fashion of consumer Trends. Having a moment that currently leaves less room for our products and brands,
With this macro context setting the stage more specifically, we saw delays in anticipated new distribution and major promotions at certain large retailers throughout Q2 2025.
further and related, we continue to experience the impact of this locations, arising from the move of our and other plant-based meat products at many retailers, the refrigerated to the Frozen aisle,
Negatively affecting our us retail performance this quarter.
Certain delays in new US retail distribution meant that these enforcement gaps, played a larger role in our Q2 performance than anticipated.
It is important to note that in stores or we have been able to maintain a consistent Consolidated, brand presence. We tend to see more incurred in velocity.
This point is an important 1 to consider as we contemplate broader stabilization across us retail.
recall, that this is been an enormously disruptive period for our category and brand across us, grocery
With instability being the consistent theme for quite some time for multiple entrance. Flooding, the market only to be listed to a general shrinking of shelf space to a disruptive relocation of the category from the refrigerator to Frozen aisle in certain large retailers.
As we seek to rebuild our presence across this critically important Channel, we are prioritizing Consolidated offerings at high impact chains. So we might drive results that are similar to some of our higher performing current retailers,
Turning now, to International Food Service with lap significant promotional activity, in the year ago, period, and saw some pauses and discontinuation of our Burger products in certain markets.
These changes impact, the level of mix of product volume, which in turn has implications for net revenue per pound and gross margin.
We expect these and related impacts to continue to exert pressure in terms of year-over-year performance on our International Food Service Channel or foreseeable quarters.
Moving down the income statement, as 1 would expect a 20% reduction in Topline Revenue exerts negative pressure on gross margin, given the reduced volume and slowing through our facilities.
And the impact this has on fixed costs absorbing costs.
This outcome was certainly the case in the second quarter of 2025 and was further, exacerbated by aforementioned, and broader unfavorable product mix. As we saw a higher percentage of sales from certain lower margin products,
Ction costs reflection of the vigorous nature or ongoing manufacturing cost reduction initiatives.
Overall reflecting, these factors gross margin came in at 11.5% in the quarter down from 14.7% a year ago.
Operating expenses were 47.4 million in the second quarter of 2025 compared to 47.6 million in the year ago. Period.
Though this registers as only a slight Improvement, it's important to note that Opex is quarter included. Approximately 7.5 million in expenses that we consider non-recurring or non-routine. Excluding these expenses 1 can see a meaningful reduction in operating expense both in a year-over-year and sequential basis.
Form mentioned reduction in force suggests.
And our recent entry. It's 2 separate agreements related to our campus headquarters building, that reduce or offset a percentage of our future rent obligations.
We are attacking this priority with vigor.
Over an appropriate period of time. Operating expenses should be squarely viewed in the category of controlling the controllables. We are confident in our ability to continue to drive down routine. Enterprise wide expenses, to better fit, the current Revenue opportunity.
This disappointing quarters. Now thankfully in the rearview mirror and as you might have gathered we're using it to deepen intensify our transformation efforts towards sustainable positive operations. Within the second half of 2026.
Stepping back again to a broader view. I will close with the commentary on where we're headed.
First and foremost, as has been the theme throughout my comments today, our second quarter of 2025 requires a deeper and more fundamental reset for our company.
Your seeing the thoroughness of this reset across the action items. I have emphasized the appointments and empowerment of the transformation industry veteran for purposes of accelerating our Enterprise wide operating efficiency including and specifically operating expense reduction in Gross Market expansion.
Strategic push to build back core product distribution, at certain high impact us retailers.
And in our increased use of Beyond as a primary Mark. So as to open a branch aperture over time to protein opportunities that fall outside of the pork and poultry replication,
The necessity of this reset does not however reduce or diminish our conviction or enthusiasm for the future that awaits.
I want to be exceptionally clear on this point.
We believe the factors that encumber our success today are transient.
Just as we recognize that we are a higher priced item in a period of economic uncertainty and stress. We know that our material basis, our cost structure will change as we achieve scale.
We are in fact already in 1 limited but important incidents producing and supplying product at a cost and price that is roughly equal to the corresponding animal protein equivalent.
as we get to much higher volumes across our core products, the efficiency of our system will prevail,
And all other things being equal, we should be able to underprice animal protein in many offerings.
And just as we acknowledge that, our products are on the wrong side of our cultural moments, we know that the extreme nature of the current Renaissance around. Animal protein will, as consumer Trends, do moderate
This moderation may occur solely with time, new information, or new trends, or maybe spurred on by a set of related factors including pricing pressure, droughts, and genetic disease outbreaks.
similarly, even as we continue to do, what we can to counter misinformation around our products, including in the short 9-minute, film planting change available on YouTube,
We believe that over time, facts. Do have a way of overcoming fiction consumers. Do in fact, bristle, at being misled at the expense of their own health and our products will have the opportunity to be more fairly evaluated for what they are.
Looking immediately forward, we will continue to celebrate our brand and our products for the great tasting, healthful and sustainable addition. They can make to the diet consumers throughout our markets
As the recently released award-winning Beyond Chicken pieces indicate, we offer 21 grams of protein, no cholesterol, and less than 1 gram of saturated fat, using avocado oil. Along with only 150 calories, we provide consumers with strong macronutrients and ratios, employing simple and clean ingredients. We keep getting better at doing so.
For example, our recently released Beyond steak delay, product available, only at select restaurants. At steak houses provides 28 grams of protein, no, cholesterol. And only 1 gram of saturated fat. Also from avocado oil, all with only 230 calories,
Original, which does not seek to replicate these pork or poultry is made with only 4 ingredients water.
Faba, Bean protein, potato protein, and celium husk and provides 27 grams of protein with no cholesterol.
No saturated fat. No added oil and only 140 calories.
Is in my view just the beginning.
Our brand, our company, our expertise, our capability, and our essos are hardwired to deliver clean. Great tasting, healthful protein, made with simple clean, limited ingredients all within highly compelling macronutrient ratios.
We took it on the chin in the second quarter of 2025, but remain undeterred and truly excited about our future, the future of protein.
And with that, I'll now turn the call over to Ludy.
Thank you, Ethan and good afternoon, everyone.
I'll begin by reviewing our financial results for the quarter in Greater detail before, providing some brief comments on our Outlook.
overall, net, revenues decreased 19.6% to 75 million in the second quarter of 2025 compared to 93.2%,
The year-over-year decline in net revenues was primarily driven by an 18.9% decrease in volume of products, sold and a 0.9% decrease in net revenue per pound.
Volume of products sold continued to be negatively impacted by weak category demand and was further affected by reduced points of distribution in the US, retail Channel, as well as lower sales of burger products to certain quick service, restaurant customers in the International Food Service Channel.
The slight decrease in net revenue per pound was primarily driven by higher trade discounts and changes in product sales. Mix partially offset by favorable changes in foreign currency exchange rates and the benefit from pricing actions initiated in the year ago, period.
Breaking this down by Channel us retail Channel, net revenues, decreased 26.7%, to 32.9 million in the second quarter of 2025 compared to 44.9 million in the year ago. Period.
The year-over-year decrease was primarily driven by a 24.2% decrease in volume of products, sold and a 3.2% decrease in net revenue per pound.
Weak category demand, particularly in the refrigerated segment, continued to weigh on our U.S. retail volumes, which were further impacted by reduced points of distribution compared to the year ago period.
Although we expect to regain some of this loss distribution in the balance of the year, we anticipate that operating conditions in our us. Retail business will nonetheless remain challenging in the near term.
The year-over-year decrease in US retail net revenue per pound was primarily driven by higher trade discounts, partially offset By changes in product sales mix and the benefit from pricing actions implemented in 2024.
Us retail Channel. Net revenues also included approximately 100,000 dollars of ingredients sales in the, in the F, in the quarter compared to approximately 800,000 in the year ago. Period.
Moving on to us food service. Net revenues, increased, 6.8% to 11.1 million in the second quarter of 2025 compared to 10.4%.
The year-over-year increase in net revenues was primarily driven by a 4.4% increase in net, revenue per pound and a 2.3% increase in volume of products, sold mainly reflecting higher sales of our ground beef and dinner sausage products, broadly.
Net revenue per pound primarily benefited from last year's pricing actions and changes in product sales. Mix partially offset by higher trade discounts.
Now, turning to International.
International retail Channel, net revenues. Decreased 9.8% to 15.9 million in the second quarter of 2025 compared to 17.6 million in the year ago. Period.
The decrease in net revenue was primarily driven by a 13.1% decrease in volume of products sold partially offset by a 3.9% increase in net revenue per pound. The decrease in volume of products sold was primarily driven by reduced sales of our Burger dinner, sausage and ground beef products in Canada, as well as lower sales of our Burger products in the EU.
An fx and changes in product sales mix.
In International Food Service. Net revenues in the second quarter of 2025 decreased 25.8% to 15.1 million compared to 20.4 million in the year ago, period.
The decrease in net revenues, was driven by a 21.6%. Decrease in volume of products, sold mainly attributable to lower sales of burger products to certain qsr customers and a 5.3% decrease in net revenue per pound, primarily driven by changes in product sales mix and partially offset by lower trade discounts and favorable changes in FX.
Moving further down the P&L, gross profit in the second quarter of 2025 was $8.6 million, or a gross margin of 11.5%, compared to gross profit of $13.7 million, or a gross margin of 14.7%, in the year-ago period.
Gross profit and gross margin in the second quarter of 2025 were negatively impacted by the effect of reduced fixed cost absorption. Given the year-over-year decline in volume, and to a lesser extent, the slight reduction in overall, net revenue per pound.
Additionally, gross profit and gross margin in Q2 included, 1.7 million in expenses, related to the suspension of our operational, activities in China, which have substantially ceased at this point.
After taking into account, certain transitory factors. And the impact of softer volumes we are encouraged by the direction of travel of our underlying manufacturing costs. Even as we recognize that, there's still significant work to be done to achieve our longer term objectives,
Total operating expenses, including R&D came in at 4 7. 4 4, 2,
This slight year-over-year Improvement was achieved. Even as we incurred certain large non-routine expenses in Q2 including 4.5 million in expenses, related to retention initiatives 2.5 million in incremental legal expenses, associated, with arbitration proceedings, arising, from a contractual dispute, with a former co-manufacturer.
and approximately 500,000 dollars in expenses related to the partial lease, termination of a portion of our headquarters building in California,
Excluding these items, the year-over-year decrease in operating expenses was primarily driven by reduced marketing and selling expenses.
Below the line total other income. Net was 5.7 million in the second quarter of 2025 compared to Total other expense net of 0.6 million in the year ago. Period.
The year-over-year increase in total other income. Net was primarily attributable to net realized and unrealized foreign currency transaction gains.
All in net loss for the second quarter of 2025 was 33.2 million or a loss of 43 cents per common share compared to net loss of 34.5 million or net loss per common, share of 53 cents in a year ago, period.
Adjusted ibida was a loss of 26 million or minus 34.7% of net revenues in the second quarter of 2025 compared to adjusted ibida loss of 23 million or minus 24.7% of net revenues in the year, go period.
with respect to balance sheet and cash flow highlights are cash and cash equivalents balance including restricted, cash was 117.3 million and total outstanding debt was approximately 1.2 billion dollars as of June 28th, 2025
Net cash used in operating activities was 59.4 million and the 6 months ended June 28th, 2025 compared to 47.8 million in a year ago period while capex totaled. 6.4 million, in the 6 months ended June 28th 2025 compared to 2.5 million in the year ago. Period.
Net cash. Provided by financing activities was 33.6 Million on the 6 months. Ended June 28th 2025 compared to net cash used of 1 million in the year ago. Period.
Net cash provided by financing activities. In the 6 months ended, June 28th, 2025 included an initial draw in the amount of $40 million from the delayed draw Term Loan facility with unprocessed Foods. LLC, partially offset by related debt issuance costs.
You too with negatively affected by certain non- routine, payments, including an amount related to the previously disclosed consumer class action, settlement legal, and financial advisor costs as we seek to strengthen our balance sheet and non- routine. Retention costs to incentivize continuity across key functional areas.
Net of these special items are underlying cash consumption for the quarter was encouragingly lower than in recent quarters. But still a figure, we are aggressively working to lower.
Although we continue to have no near-term debt. Maturities in line with our strategic priorities for the year, we continue to focus on strengthening our balance sheet, including evaluating potential transactions, to address our existing convertible notes, prior to maturity in 2027,
I'll now touch briefly on our Outlook. We continue to experience an elevated level of volatility and uncertainty in our operating environment. Making it extremely difficult to forecast Beyond a very short time Horizon.
As such, we're continuing to provide only limited guidance around our near-term, net revenue expectations specifically. In the third quarter of 2025 we expect net revenues to be in the range of 68 million to 73 million reflecting among other things, persistent softness of demand within the plant-based meat category, and the anticipated impact from recent distribution losses at certain qsr customers.
And with that, I'll turn the call over to the operator to open it up for your questions. Thank you.
At this time, if you would like to ask a question, please press the star and 1 keys on your telephone keypad. Keep in mind, you can remove yourself from the question queue at any time by pressing star and 2 again. It is star and 1 to ask a question today.
We'll take our first question from benur with Barclays. Please go ahead. Your line is open.
Uh yeah, good afternoon. Uh, Ethan Luby, uh, thanks for taking my questions. Um, just 2 questions I have for you gentlemen. Um, the number 1 you you talked about getting somewhat adjusted, EBA positive and the back half of next year as I understood this correctly. So if I just look at some of the Run rate, um operating expenses that you're having right now, A little over call at 40 a million dollars. I just assumed you get this down to a run rate more like in the low 30s, so that would still be an annualized somewhere in like the 120. So, that's like kind of like, your, your gross profit starting point A Little Less on, on DNA adjusted. But in, in order to get there, it really feels like we need higher Top Line, right? And I mean, you've given obviously outlook for the third quarter to be somewhat slightly down, sequentially versus the second quarter. Um, if we just assume low 700s,
Versus the 75. So the question really is
aside from trying to get across margin back up to the 20s close to 30s. You also need the revenues to be maybe closer to like 350 400 and an annualized basis which just with call it 70-ish million, each quarter does doesn't work out. So what can you do?
To really scale up the Top Line.
While at the same time, taking all this hit and trying to to serve a cut on the sgna side. So so the balance of here that that's what I would like to understand. What what are the measures you're doing today to get 1 up and the other 1 down?
Right. Yeah, I can take that and thanks for the question. Um, let me focus on us retail. Uh, Discord. I think that's where
a lot of the issues that we are facing as well as a lot of the, of opportunity we have to, to, to react and and uh, and make make strong changes is available to us and
You know, I made a lot of comments around this in.
A prepared remarks.
but if you, if you look at kind of the reasons that we're experiencing that, you know, it's it's overall category of softness but at the same time you're seeing that
Our products provide something that the consumer is increasingly expressing: high levels of interest. And that's, you know, very high levels of protein.
And then protein that has the right ratio to things like saturated fat, things like cholesterol and things like calories. So we fill that need in Spades, right? We do it. Extremely well.
Right. Um,
But if you go on to the next thing as we does it taste good, right? And then you look at things like, you know, beyond chicken or Beyond steak and the reviews, you see online, I don't need to
Go look and they get really strong taste reviews, right? So there's something going on.
We're fitting a consumer Trend around high levels of protein against low levels of
Calories and saturated fat, and exact nature.
The products, you know, by third party objective standards are being reviewed as tasting really good. So, what's going on, right?
And I think what you have uh are some of the broader issues that I mentioned 1 is this misinformation around the products, right? That that is sticky. It's it's out there. It's been ingrained and for any was interested in the kind of the actual health of our products. You know, I think watching this planting change video we did which is about 9 minutes on YouTube really, really helps.
um, but then the second piece outside of the misinformation,
Is really around the pricing structure of our products, right? We are just a higher price product and it continues to be an issue in an environment where the consumer is. Cash-strapped.
If you look at, for example, our ground beef at, uh, let's say 9.99 a pound in in an average retailer, uh, versus even as ground beef. Rises on the animal side is still, let's say 7.99 a pound that, you know, that $2 matters, right? And so, you got the headwind of the misinformation. You got the headwind of pricing.
But over time, those things will uh start to change, you know, you're starting to see more and more people come out, doctors universities.
National health organizations say wait, this stuff is really good for you to make sure you're including your diet.
And then on pricing, you know, as, as we continue to get our own house in order, in terms of getting the production footprint where it needs to be scaling down to the current size. Uh, that's required for current demand levels. Yeah, I do hope that we can start to do something around pricing to, to maintain our margins increase, our margins, uh but be able to do so. With more competitive pricing and you're seeing us do that in certain value offerings like a classic. We've got a 6 count coming out. Uh, in the burger side that you should be able to do that as well. So we can sort of chip away at these issues.
But there's something more fundamental we can be doing at the street level, that really matters. And I think we'll start to show, uh, some dividends on on the growth side. If you think about what's happened in the US, retail, you know, we went from a beautiful selection of plant-based meat in the fresh section of the supermarket refrigerate section.
A few years ago.
The massive amount to entrance came in, they came out the misinformation, the pricing, all these things hurts the category, the category starts to become unsettled. Then it starts to really, uh, devolve right into just a smattering of offerings and the refrigerator section, then you see us getting pulled out of the refrigerator section and into the frozen section that's happening in a really
Coordinated way.
So we're finally now, starting to get our bearings in the frozen section, where we can build brand blocks, and where we have those brand blocks, you're starting to see much, uh, better velocities than you, see where we don't have that.
And so what our retail team is doing right now is they're going out and they're building these brand box in some of the key retailers and we'll be announcing some distribution later this year uh that reflects that, but making it easier for the consumer to to find our products is just basic blocking the blocking and tackling that we're doing.
And anyone who's a loyal consumer of our brand knows it. It's hard to find our products, right? And so building back that distribution building back those brand blocks and key retailers is something we're very focused on around our core items and that will start working to deliver some. Some, uh, some Top Line We Believe really stabilization.
so,
If you look at the macro stuff, we're going to chip away at that. If you look at the sort of on the street stuff, we're working very hard to to, to fix that. Uh, and those things should offer uh, some stabilization.
Over time. We're starting to extend 1. More thing over time. We're starting to extend the brand, you know, beyond necessarily just
Animal protein, replicates and into things that just deliver these nutritional gains that consumers want. And the most recent product we've used out around that was the Beyond ground product and that has, you know, 27 grams of protein. I mentioned it in my prepared, remarks 1 repeated here, but just the initial T's, we did online around that shows that we can capture this consumer interest around around, really good. Macros levels of protein fiber, low levels of calories, low levels of saturated fat, zero cholesterol and so you're going to start seeing us do that uh in a much more way and we think that also should should lead to to some some, some, some significant Topline growth.
Okay, got it. And then my my second question really. Um you you've kind of like managed um to kind of like sustain the cash balance um compared to March. Uh so it's just wondering I mean obviously we're still we're still seeing
That was a little bit of like offsetting things um, on on the financing side. So just lie. Maybe you can help us Bridge a little bit from the level where we're at right now. The give or take a little over 100 million, um, was a little bit, maybe in restricted, cash, how should we think about the cash and the working capital needs and and everything that you're going to have to outlay for some of these like measures you're taking into the second half and and how comfortable are you with the cash that you have also in light of the maturity in?
2 years time. Give or take. Yeah. So so very quickly before lubby jumps in, you know, 1 of the things that I think it's really important to note on the cash consumption. This quarter is roughly half of it, fully about 19 million.
Is kind of cleaning up certain issues, whether it was the class action settlement, or dealing with some of the structural issues. We're trying to address on the balance sheet, right? So you have a lot of
Exogenous expense going on. Uh, that's not really related to the Core Business. So while it, it feels like a big number of the actual number. We're trying to chop away at is much much lower and Lou we can talk about that. Okay, yeah, okay. I'll eat some kind of stole my thunder, but um, I I think, um, what uh, what I think what Ethan said is absolutely correct that. Um, look, if you look at the, the um, you know, obviously in the in the uh, second quarter of this year, we did, um, do our uh, initial draw on the
The um, on the term, delayed Term Loan facility, and that was in the amount of forty million dollars. Um, so if you excluded that, you know, um, on the face of it, the level of cash consumption. Looks like it's ticked up on a sequential basis. But as Ethan mentioned, you know, there there are some things that were included in, in Q2, you know, pretty significant amount, um, related to things. Like, you know, this was the who was the quarter where we paid, um, the class action, uh, settlement, that we had a crude, for, in, um, in 2024. Um, you know, I mentioned in my prepared remarks, you know, some, some things we did around retention, you know, we have, um, you know, right now, uh, financial and legal advisor, fees related, you know, to some of our balance sheet, um, you know, uh, strengthening work streams that were were pursuing, um, and, and other items and it was a significant amount. But I think like, you know, the to, to get to really the heart of your question, right?
We are super focused on um, you know, slowing the rate of cash burn that, you know, you, you asked the question um before about uh you know you in your uh comments about getting to ibida positive and and how that requires Top Line, I think that that's absolutely right. So, you know, we we we need to not only stabilize the top line and you know eventually get that growing. But at the same time, right? Some of the Investments that we're making right now at in our manufacturing facilities,
I really geared towards increasing the um uh the gross margin profile of the of the entire portfolio and um, you know, taking much more aggressive measures, um, you know, to, to lower, um, operating expenses, right? And, um, you know, so we we, we announced today the, um, you know, the the partnership with, um, with, uh, Alex partners and bringing on John John boen and and that's really, I think a um, uh a symbol of the level of urgency and seriousness. That we're placing on, you know, ensuring that we are able to to drive out cost uh, from the business. Um, as as quickly as we can,
Got it. Thank you very much. I'll pass it on.
Thank you for.
We'll take our next question. From Alexia Howard with Bernstein. Please go ahead. Your line is open.
Thank you. Um, just a couple of questions from me. Um, first of all, the the International Food Service channels uh and the decline in the qsr um chains, it seems as though that was an area of strength up until recently. Uh, can you just drive what's changed there and and how that could be turned around once again?
On the menu that that, uh, that allow them to have higher margin. Um, so it's not 1 particular issue. Um, but we continue, you know, to believe in those Partnerships and, and continue to be active in in our relationships with them. Uh, but this particular quarter and I think, you know, for the next few quarters, I think you will see some softness in in that, in that area.
Thank you and then just as a follow-up.
I guess the question that I'm wrestling with in terms of turning the top round at the Top Line around is how do you get a second bite at the cherry from people that have elapsed? Because obviously there was a time.
few years ago, where many people were trying the products and they tried it again and again and again and eventually they just dropped off and these are the flexitarian meat eaters. And now it, I think you mentioned in your prepared remarks, it's a much smaller group of consumers,
Is there an issue or or how can you go about getting getting those folks back?
Yeah, that's a great look. It's a great question. And I want to just be also refer back to the previous question and it it we're oboli doing everything we can to go to the Top Line. I think we will enough overly exercise about that.
But, you know, I look at this in, you know, a very long over a long period of time. Like oh, you know what, what is the next decade? Look like. Right. And so, you know, the number 1 job we have right now is really just to fit the operating base of the business into the current, current demand levels, right? So we need to stabilize the current, uh, revenue and then make sure that the operating base fits within that,
Once we've done that, uh, then what we can do is sort of get through this period. I mean, it is, as I said, you know, it's not the moment for plan pacemaker right now, right? You've got these, you know,
Cultural moments that occur and we happen to be on the other side of the particular moment, right? And that won't always be the case. But what we shouldn't do is, you know, sort of use a lot of dry powder. Uh trying to to to force growth right now, what we should be doing is stabilizing the business, getting the operating expense to where it needs to be fixing the margins. So that as
We can reach the audience that we need to reach. We're around to be able to do that and that's really the key Focus. Now having said that, I do believe that there are things we can be doing
That are not kind of that the farm activities, uh, on on growing, uh, the top line. And that's some of the things I mentioned. You know, we just continue to lean into the truth about our, our products. Uh, you know, the fact that we do actually fit a very strong consumer Trend, which is around protein and fiber.
And it's particularly around how those 2 macronutrients represented, and that's in the, you know, uh, relation to, to lower calories lower, saturated fat, and things of that nature. We do that in Spades. So we should be getting rewarded for that and the reason we're not. If some of these things we talked about the misinformation, the higher pricing, so on and so forth. So 1 of the opportunity to address that we will and will not only address it through kind of earned and social do a little bit paid on it as well. Um, and as I mentioned before, you know, trying to offer value packs to the consumer, things of that nature to get through on the pricing side.
But how can we use our brand and our technology, uh to serve that need for the consumer in a variety of applications. And so the Beyond ground that we teased out, which is getting really fascinating response uh, online and and uh, a lot of interest from media
Um, is an effort to emphasize those characteristic and attributes of our products, uh, versus emphasizing, you know, how much or, uh, how similar they are to animal protein. And so, if you look at the Beyond ground with the 27 grounds, protein 140 Cal, uh uh, you know, the fiber Etc. That's what the consumer responding to today, and that's where you're going to see beyond meat leaning. And uh, and I think that will help us uh with uh with some of the Topline issues we're having
Thank you very much. I'll pass it on.
And as a reminder, if you'd like to ask a question today, please press the star and 1 keys on your telephone keypad.
We'll take our next question from Robert Moscow. With TD Cohen, please go ahead. Your line is open
Hi. Uh thanks for the question. Um, you know, this is this is from the 10K, so it's it's kind of old it's you know, it's already been out there for a few months but I was just looking at the employee count and it it says 7504 employees. Um,
that that's down from 2 years ago but up a lot from 2023 when you had your first um restructuring announcement and I was wondering if the
Ed and you know, is there, you know, was there an increase in employees in 24 after that? And the reason I'm asking is, you know, that, you know, everyone's, you know, hoping that you can, you know, shrink your your cost base, it may sound kind of Heartless but
To in, in order to to remain, uh, a going concern. So I I wanted to ask that question.
Oh look, it's it's a good question and and you know, you might look at that and say, oh, you know, there's been creeped, these guys are making these Cuts, but then there's adding back, that's not what's happening with what's happening. Is the
1 is a change in composition of our Workforce. Um, so a lot of that is um uh, you know production uh uh related and and as you recall, we went from 13 co-actors down to, you know, 1. Uh and so we have expanded kind of the activities we're doing in our facility. So that's what that looks like. It's not that our you know headquarters are are are chocked full of people. That's not the case.
Yeah, just the other thing that I the, the 1 other thing, I would just add to that. Uh, Rob. Is this, you know, over the the last couple of years we had invested right in our International businesses, um, as well, right? And so, you know, the the EU was expanding, um, you know, we we had a China business, um, as well, right. Which we are, um, you know, we're we're shutting down our operational activities there but that's some of what you're seeing and the time period that you're um referring to
International expanded in 24.
Is that did your know? I don't think. I, I don't we we'll look at the exact numbers. Um, I think he's referencing it from 23 uh, to today, but um, I think the primary issue that you're identifying is this is this contract manufacturing? Yeah. That that makes sense. We basically if you think about all that activity has been brought in house
Okay um my follow-up uh John boen can can you give a little more detail at about what he is going to focus on right out of the gate, um, in order to improve efficiency and it's a temporary position. So you know what, what, what are his goals coming in and and and how long does he have to execute it?
Sure. So we really enjoyed working with Alex partners and, and, uh, and, and working with John specifically, um, and, uh, you know, this, this is kind of the next phase in our relationship and, and the reason that I, I wanted him to come on as a interim manager of the business.
Um is is to to Really Drive 2 major outcomes that we're looking for 1 is to is to get the operational footprint into the current Revenue, right? Uh environment. So that's the first and so looking at how to do that thoughtfully in a way that doesn't
No breaking things, but gets us to where we need to be, um, and he has a ton of experience doing that, right? And then the second is really around margin. Let's accelerate the margin work. We've had issues where we're making good progress on the cost of goods produced.
Uh but you're not seeing that show up in margin uh as much as you should for for for a number of reasons. But but 1 of the ones, it's the most kind of frustrating rate is that with lower volumes running to the facilities, you're having, you know, poor overhead of the door option. And so uh that's obscuring the good progress for making so we just have to take a more holistic. Look at how we're we're we're driving margin expansion. Uh and so those 2 main initiatives are are ones that are going to be a major Focus for them. But also just the, the operational efficiency of the business. You know what I have to do now?
And this relates to Lexus and some of the earlier comments.
How do we make sure that the terrific products that we're developing the, the amazing brand we have? And again, just take a moment to think about this. We've been through all this turmoil. But if you, if you look at some major Publications in the United States 2024, I'm not talking about 2021 20219 20284. You're seeing us identified as you know, world's leading brand and so on and so forth. So we have a great brand, we have very good products. There is a disconnect on 1. My job is CEO right now, is to go out and work on that fundamental connection between our products and the consumer and make sure that that's happening. And so I wanted someone like John, uh, to take a kind of more Global, look at the business.
Just come in and help us meet some of these uh frankly restructuring goals uh to make sure that we can become ibida positive uh within the second half of next year. So so it's a it's a pretty broadly scoped position.
Can't comment on how much time he has. He's, you know, we, we're really enjoying him being here. Uh, so so hopefully, we'll, we'll get, uh,
Get some good work uh, done together.
Great. Thank you.
Anyway, in it is a mediator that uh, you know, is uh, is talking about I guess his wife is talking about his reaction to this product. That's when I need you to try, you're going to like that 1.
Okay, it will be done. Thank you, Ethan. All right. Thank you, my man. Appreciate it.
And once again, if you would like to ask a question, please press the star and 1 keys. We can pause for a moment to allow any further questions to queue.
And there are no further questions on the line at this time, I'll turn the program back to uh Ethan Brown for any closing remarks.
No, thank you. Look, guys, this is, you know, a tough quarter. As I say, we took it on the chin. Um, it wasn't what we wanted. Um, but I think, you know, the reaction is what matters. And if you look at the transformation program...
Work that I outlined. Uh, we're busy doing that. You know, we've obviously known about these results and and, uh, have been been fast after it and I think between the
Um, you know, 10 spot, cost reduction, the gross margin expansion initiatives.
Really focusing on expanding our core distribution, particularly in US retail. And then this opportunity to potentially live outside some of the confines we've been in recently around, you know, looking at things like Beyond ground and the use of the Beyond brand. And and protein occasions for consumers. I'm very optimistic about where we're at and uh, you know, we've got to get this balance sheet stuff worked out, we're working on that. So um, you know, making some fundamental changes and kind of a reset for for for where we are and as a category leader and I'm I'm I think it's uh, it's going to be a
A hopefully, a upper productive. Several years here. Thanks.
This does conclude the beyond meat Inc Tool uh 2025 second quarter conference call. Thank you again for your participation and you may now disconnect