Q1 2026 Guru Organic Energy Corp Earnings Call

March 12, 2026

Speaker #2: At this time, all participants are in listen-only mode. Following management's presentation, there will be a question-and-answer session with financial analysts, instructions will be provided at that time for you to queue up for questions.

Speaker #2: If anyone has any difficulties hearing the conference, please press star, followed by zero, for operator assistance at any time. Guru's press release, MD&A, and financial statements are available in the investor section of its website and on SEDAR+.

Speaker #2: During the call, the company may refer to certain non-GAAP measures, reconciliations are available in its MDNA, also note that all financial figures are expressed in Canadian dollars unless otherwise indicated.

Operator 2: I would also like to remind you that today's presentation may contain forward-looking statements about GURU's current and future plans, expectations, and intentions, results, level of activity, performance goals, or achievements, or other future events or developments. Please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I would now like to turn the call over to Carl Goyette, GURU's Chief Executive Officer.

Operator: I would also like to remind you that today's presentation may contain forward-looking statements about GURU's current and future plans, expectations, and intentions, results, level of activity, performance goals, or achievements, or other future events or developments. Please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I would now like to turn the call over to Carl Goyette, GURU's Chief Executive Officer.

Speaker #2: I would also like to remind you that today's presentation may contain forward-looking statements about Guru's current and future plans, expectations, and intentions results level activity, performance goals, or achievements.

Speaker #2: Or other future events or developments. Please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I would now like to turn the call over to Carl Goyette, Guru's chief executive officer.

Carl Goyette: Thank you, operator. Bonjour à tous. Good morning, everyone, and welcome to Guru's Fiscal 2026 Q1 Results Conference Call. Joining me this morning is our CFO, Ingy Sarraf. Let's turn to slide 5. Q1 2026 marks the third consecutive quarter of positive adjusted EBITDA and the strongest first quarter in Guru's history. We delivered record first quarter net revenue of CAD 8.8 million, up 14.7% year-over-year. Gross margin expansion to 63%, up 345 basis points. Our first EBITDA positive Q1 since going public, achieved during our seasonally softer quarter. Over the last several quarters, we have clearly demonstrated our ability to execute and deliver profitable growth.

Speaker #2: Thank you, operator. Bonjour à tous. Good morning, everyone, and welcome to Guru's fiscal 2026 first quarter results conference call. Joining me this morning is our CFO, Ingy Seraph.

Speaker #2: Let's turn to slide five. Q1 2026 marks the third consecutive quarter of positive adjusted EBITDA and the strongest first quarter in Guru's history. We delivered record first quarter net revenue of $8.8 million, up 14.7% year over year.

Speaker #2: Gross margin expansion to 63%, up 345 basis points. And our first EBITDA positive Q1 since going public achieved during our seasonally softer quarter. Over the last several quarters, we have clearly demonstrated our ability to execute and deliver profitable growth.

Carl Goyette: Our trailing 12-month net revenue rose 17% alongside positive adjusted EBITDA of CAD 0.8 million, a defining achievement that underscores the strength of our business model and marks our first sustained period of growth with profitability as a public company. Let's turn to slide 6 for more details. In Canada, revenue increased 27.9% to CAD 7.2 million. This was driven by rigorous retail execution under the direct distribution model, continued zero sugar innovation momentum, improved promotional discipline, and pricing execution. The transition back to direct distribution is now fully embedded operationally, and we are seeing the benefits flow through both revenue growth and gross margin expansion. We now operate with greater agility, deeper retail engagement, and improved visibility across key banners. Turning to slide 7.

Speaker #2: Our trailing 12-month net revenue rose 17% alongside positive adjusted EBITDA of 0.8 million dollars. By defining achievement that underscores the strength of our business model and marks our first sustained period of growth with profitability, as a public company.

Speaker #2: Let's turn to slide six for more details. In Canada, revenue increased 27.9% to 7.2 million dollars. This was driven by rigorous retail execution under the direct distribution model, continued zero-sugar innovation momentum, improved promotional discipline, and pricing execution.

Speaker #2: The transition back to direct distribution is now fully embedded operationally and we are seeing the benefits flow through both revenue growth and gross margin expansion.

Speaker #2: We now operate with greater agility, deeper retail engagement, and improved visibility across key banners. Turning to slide seven, in the US, Q1 performance was impacted by elevated distributor inventory, levels entering the quarter.

Carl Goyette: In the US, Q1 performance was impacted by elevated distributor inventory levels entering the quarter, as well as strong prior year comparison driven by wholesale club timing. Despite these dynamics, underlying consumer demand remains strong. Consumer scan across our listed US natural retail accounts, including Whole Foods, increased approximately 15% over the last 12 weeks. In addition, early Q2 shipments have shown encouraging signs of recovery, with February shipments up over 50% versus the prior year as distributor inventory levels normalize. Consumer scan data continues to support underlying demand strength. Beyond the near-term recovery, we're also actively in discussions with targeted distributors, partners, and retailers to expand our presence in the US market.

Speaker #2: As well as a strong prior-year comparison driven by wholesale club timing. Despite these dynamics, underlying consumer demand remains strong. Consumers, across our listed U.S. natural retail accounts—including Whole Foods—increased approximately 15% over the last 12 weeks.

Speaker #2: In addition, early Q2 shipments have shown encouraging signs of recovery, with February shipments up over 50% versus the prior year, as distributor inventory levels normalize.

Speaker #2: Consumers can data continues to support underlying demand strength. Beyond the near-term recovery, we're also actively in discussions with targeted distributors, partners, and retailers to expand our presence in the US market.

Carl Goyette: Over the past year, we have proven our ability to compete across our listed US retail partners, reaching top-performing brand at Whole Foods, ranking among the top three natural brands in the natural channel, and delivering rapid growth on Amazon. These achievements underscore our confidence in GURU's significant long-term growth potential in the US. Turning to slide 8. We are very pleased with the evolution of Zero Sugar lineup. Since launching our Zero line in the spring of 2024, we have rapidly expanded to six Zero Sugar offerings, including two new sorbet-inspired innovations launched in Q1 and in Q2. Our Zero line is uniquely positioned as 100% organic, zero sugar, no sucralose, no aspartame. Within two years, we have built one of the most differentiated clean label zero sugar portfolio in the category.

Speaker #2: Over the past year, we have proven our ability to compete across our listed US retail partners. Reaching top-performing brand at Whole Foods, ranking among the top three natural brands in the natural channel, and delivering rapid growth on Amazon.

Speaker #2: These achievements underscore our confidence in Guru's significant long-term growth potential in the US. Turning to slide eight, we are very pleased with the evolution of zero-sugar lineup.

Speaker #2: Since launching our zero line in the spring of 2024, we have rapidly expanded to six zero-sugar offerings, including two new sorbet-inspired innovations launched in Q1 and in Q2.

Speaker #2: Our zero line is uniquely positioned as 100% organic, zero sugar, no sucralose, no aspartame. Within two years, we have built one of the most differentiated clean-label zero-sugar portfolios in the category.

Carl Goyette: Our new sorbet-inspired series reflects our ability to innovate quickly while staying aligned with consumer demand for clean ingredients and modern flavor profiles, and it has already outperformed previous innovation launches. Innovation complements our core portfolio and remains a primary growth driver in Canada and a key velocity builder in the US. Given current momentum, we plan to launch more new products before year-end. I will now turn the call over to Ingy for a deeper look at our financial performance.

Speaker #2: Our new sorbet-inspired series reflects our ability to innovate quickly while staying aligned with consumer demand for clean ingredients and modern flavor profiles. And it has already outperformed previous innovation launches.

Speaker #2: Innovation complements our core portfolio and remains a primary growth driver in Canada and a key velocity builder in the U.S. Given current momentum, we plan to launch more new products before year-end.

Speaker #2: I will now turn the call over to Ingy for a deeper look at our financial performance.

Ingy Sarraf: Thank you, Carl, and good morning, everyone. Let's turn to slide 10. Let me walk you through the key financial and balance sheet highlights for Q1 2026. Net revenue increased 14.7% to CAD 8.8 million, the highest Q1 in GURU's history, driven by strong Canadian performance up 27.9%. Gross profit reached CAD 5.6 million, with gross margin expanding 345 basis points to 63.0% from 59.5% in Q1 2025. This improvement reflects the structural benefits of our direct distribution model in Canada, pricing discipline, trade optimization, and continued operational efficiencies. SG&A expenses were flat year-over-year at CAD 6.1 million, but improved significantly as a percentage of revenue, declining to 68.7% from 78.8%.

Speaker #3: Thank you, Carl. And good morning, everyone. Let's turn to slide 10. Let me walk you through the key financial and balance sheet highlights for Q1 2026.

Speaker #3: Net revenue increased 14.7% to 8.8 million dollars. The highest Q1 in Guru's history, driven by strong Canadian performance, up 27.9%. Gross profit reached 5.6 million dollars.

Speaker #3: With gross margin expanding 345 basis points to 63.0% from 59.5% in Q1 2025. This improvement reflects the structural benefits of our direct distribution model in Canada: pricing discipline, trade optimization, and continued operational efficiencies.

Speaker #3: SG&E expenses were flat year over year at 6.1 million dollars. But improved significantly as the percentage of revenue. The climbing to 68.7% from 78.8%.

Ingy Sarraf: Sales and marketing expenses decreased 7.6% to CAD 3.0 million, reflecting improved marketing efficiency and disciplined investment allocation. Net loss improved to CAD 0.3 million compared to CAD 1.3 million in Q1 2025, a 77.4% improvement driven by revenue growth, margin expansion, and disciplined expense management. Adjusted EBITDA reached CAD 0.01 million, compared to a loss of CAD 1.1 million in Q1 2025. This marks our third consecutive EBITDA positive quarter and our first EBITDA positive Q1 since going public, achieved during our historically softer seasonal quarter, which further demonstrates structural operational leverage. Turning to the balance sheet. We ended the quarter with CAD 28.2 million in cash and cash equivalents, and short-term investments, no debt, and CAD 10 million in unused credit facilities.

Speaker #3: Sales and marketing expenses decreased 7.6% to 3.0 million dollars, reflecting improved marketing efficiency and disciplined investment allocation. Net loss improved to 0.3 million dollars, compared to 1.3 million dollars in Q1 2025.

Speaker #3: A 77.4% improvement driven by revenue growth, margin expansion, and disciplined expense management. Adjusted EBITDA reached 0.01 million dollars, compared to a loss of 1.1 million dollars in Q1 2025.

Speaker #3: This marks our third consecutive EBITDA-positive quarter. And our first EBITDA-positive Q1 since going public. Achieved during our historically softer seasonal quarter. Which further demonstrates structural operational leverage.

Speaker #3: Turning to the balance sheet, we ended the quarter with $28.2 million in cash, cash equivalents, and short-term investments. No debt, and $10 million in unused credit facilities.

Ingy Sarraf: Our strong liquidity position gives us the flexibility to continue investing in high return innovation, support distribution expansion, and maintain financial discipline. With that, I'll turn the call back to you, Carl, for closing remarks.

Speaker #3: Our strong liquidity position gives us the flexibility to continue investing in high-return innovations support distribution expansion and maintain financial discipline. With that, I'll turn the call back to you, Carl, for closing remarks.

Carl Goyette: Thank you, Ingy. Let's turn to slide 12. Q1 confirms three important structural shifts. First, we now operate with structurally improved gross margin profile. Second, we have demonstrated sustained operating leverage, delivering three consecutive EBITDA positive quarters. Third, our innovation engine, led by GURU Zero, continues to strengthen our competitive positioning. Looking ahead, our priorities remain very clear. Expand distribution in high return channels. Continue scaling GURU Zero line. Maintain pricing discipline and trade efficiency. Protect gross margin while selectively investing in growth. We are proud of the progress achieved over the last 12 months. We are energized by the momentum entering Q2. We remain committed to disciplined execution as we continue our path forward, our path towards sustained profitability. Merci. Thank you. Operator, we'll now open the call to questions.

Speaker #2: Thank you, Ingy. Let's turn to slide 12. Q1 confirms three important structural shifts. First, we now operate with structurally improved gross margin profile. Second, we have demonstrated sustained operating leverage, delivering three consecutive EBITDA-positive quarters.

Speaker #2: Third, our innovation engine led by Zero Sugar continues to strengthen our competitive positioning. Looking ahead, our priorities remain very clear. Expand distribution in high-return channels, continue scaling Zero Sugar line, maintain pricing discipline, and trade efficiency, protect gross margin, while selecting investing in growth.

Speaker #2: We are proud of the progress achieved over the last 12 months. We are energized by the momentum entering Q2. And we remain committed to disciplined execution as we continue our path forward towards sustained profitability.

Speaker #2: Merci. Thank you. Operator will now open the call to questions.

Operator 2: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then 2. Our first question comes from Martin Landry with Stifel. Please go ahead.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then 2. Our first question comes from Martin Landry with Stifel. Please go ahead.

Speaker #4: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #4: At any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Martin Laundry with Stifel.

Speaker #4: Please go ahead.

Martin Landry: Hi. Good morning, Carl and Ingy.

Speaker #5: Hi. Good morning, Carl and Ingy.

Carl Goyette: Good morning, Martin.

Ingy Sarraf: Good morning, Martin.

Speaker #6: Good morning.

Speaker #3: Good morning, Martin.

Martin Landry: I was wondering if it would be possible, in order to get a better appreciation of your performance at retail, if we could get your scan data in Canada at retail during the quarter. Any comment on your performance at retail that, at retail channels that are not tracked, that would be super helpful.

Speaker #5: I was wondering if it would be possible in order to get a better appreciation of your performance at retail, if we could get your scan data in Canada at retail during the quarter and any comment on your performance at retail that retail channels that are not tracked?

Speaker #5: That would be super helpful.

Carl Goyette: Yeah, of course, Martin. For consistency, I'll give you the combination of tracked and untracked, which is where the more reliable measure for us. That number is at +15% versus last year. If we look at the last 12 weeks versus the 12 weeks, the same 12 weeks last year, we're up 15%. That's really driven by untracked. Within untracked, you see club, the club channel driving a lot, Dollar Channel and e-com. That's really where the growth is coming from. The US is. As I said in my remarks, the US is the same. It's around 15% as well.

Speaker #6: Yeah, of course, Martin. So, for consistency, I'll give you the combination of tracked and untracked, which is the more reliable measure for us. And that number is at plus 15% versus last year.

Speaker #6: So if we look at the last 12 weeks, versus the 12 weeks, the same 12 weeks last year, we're up 15%. That's really driven by untracked.

Speaker #6: So within untracked, you see club and the club channel driving a lot, and dollar channel and ECOM. So that's really where the growth is coming from.

Speaker #6: The US is, as I said in my remarks, the US is the same. It's around 15% as well. And one other thing that I think might be worth mentioning is we conduct a brand tracker a couple of times a year, a couple of times a year.

Carl Goyette: One other thing that I think might be worth mentioning is we conduct a brand tracker a couple times a year. A couple times a year, we survey consumers to track our brand performance, and it looks at all sorts of brand metrics like awareness and consideration. One important metric that I wanted to share with you, Martin, was the what we call past six months purchases. It somewhat measures household penetration and how many people try our brand. That we've seen a significant increase over the last quarter. Last year we had a number around 25% of consumers who had purchased GURU in the last six months, and this year it went up to 29%.

Speaker #6: We survey consumers to track our brand performance, and it looks at all sorts of brand metrics, like awareness and consideration. But one important metric that I wanted to share with you, Martin, was what we call past six months purchases.

Speaker #6: So it's somewhat measures household penetration and how many people try our brand. And that we've seen a significant increase over the last quarter. Last year, we had something around we had a number around 25% of consumers who had purchased Guru in the last six months.

Speaker #6: And this year, it went up to 29%. And that's usually a really good indicator of trial which is a good leading indicator to share to market share growth when this indicator is grown in the past.

Carl Goyette: That's usually a really good indicator of trial, which is a good leading indicator to share to market share growth. When this indicator has grown in the past, we saw a share growth grow further along after that. We thought that was a positive one that we could share with you, Martin, this morning. The short answer to your answer is 15% growth.

Speaker #6: We saw share growth grow further along after that. So, we thought that was a positive one that we could share with you, Martin, this morning.

Speaker #6: But the short answer to your answer is 15% growth.

Martin Landry: Yeah. Thank you. Super. Thanks for the color on the brand tracker. That's interesting. Just going back on the scan data performance in Canada, up 15%. How does that compare to the industry?

Speaker #2: Yeah. Thank you. Super. Thanks for the color on the brand tracker. That's interesting. Just going back on the scan data performance in Canada, up 15%.

Speaker #2: How does that compare to the industry?

Carl Goyette: It's a little bit ahead. Obviously what we see from the industry is tracked, so it's a little bit ahead of what we see in tracked. We don't have visibility on other brands and untracked, obviously. Yeah, the industry has grown both in Canada and the US. The industry has been growing very healthy. The last number I saw was around 10%, but it varies week to week and month to month, but it's been really around the range of 10% to 15%. Our goal is always to grow faster than the industry and because we believe our brand has so much potential.

Speaker #6: It's a little bit ahead. It's a little bit ahead. Obviously, what we see from the industry is tracked, so it's a little bit ahead of what we see in track.

Speaker #6: We don't have visibility on other brands in untracked, obviously. So yeah, the industry has grown both in Canada and the US. The industry has been growing very healthy.

Speaker #6: The last number I saw was around 10%, but it varies week to week and month to month. But it's been really around a range of 10 to 15%.

Speaker #6: Our goal is always to grow faster than the industry. And because we believe our brand has so much potential.

Martin Landry: Yeah. Okay. Thank you for that. Any comments you can share, Carl, on how Q2 is tracking so far?

Speaker #2: Yeah, okay. Thank you for that. And then, any comments you can share on how Q2 is tracking so far?

Carl Goyette: Yes.

Martin Landry: Especially in Canada, Carl. You gave a lot of information on the US. That was helpful, but maybe a bit more on Canada.

Speaker #6: Yes.

Speaker #2: In Canada, Carl, you gave a lot of information on the US. That was helpful. But maybe a bit more in Canada.

Carl Goyette: Yeah. It's still very early, only 6 weeks in. Sometimes we speak and we're a little bit deeper in the quarter, so it's a little bit harder to say. So as I said in my remarks, the US we thought was really important, like gives you that visibility, especially that the February was really strong at 50%. What I can say about Canada is that so far, you know, it's aligned to our plans, so there is no surprise in the last month. It's aligned to our plans. It's aligned to what we wanna achieve.

Speaker #6: Yeah. It's still very early. Only six weeks in. Sometimes we speak and we're a little bit deeper in the quarter. So it's a little bit harder to say.

Speaker #6: So as I said in my remarks, the US, we thought it was really important. That gives you that visibility. Especially that the February was really strong at 50%.

Speaker #6: What I can say about Canada is that so far, it's aligned to our plan. So there is no surprise in the last month. It's aligned to our plans.

Speaker #6: It's aligned to what we want to achieve. And usually, Q2 is for us, Q1 is always a little bit of a slower seasonal quarter.

Carl Goyette: Usually Q2 is for us, like Q1 is always a little bit of a slower seasonal quarter, like we've seen in pretty much every single year in the past. Q2 is hopefully the spring, and the sun is gonna show up in Canada. That's usually always helpful. Our brand tends to be somehow a little bit more seasonal than in the industry. Somehow our consumers are a little bit, I guess they purchase a little bit less as a habit. When the sun starts shining and the weather is nicer, we see it, well, significantly. We will dial this up with a lot of activities. We just announced a launch of the new GURU Zero Orange Raspberry Sorbet.

Speaker #6: We've seen in pretty much every single year in the past. Q2 is hopefully the spring and the sun is going to show up in Canada.

Speaker #6: That's usually always helpful. Our brand tends to be somehow a little bit more seasonal, the industry. Somehow our consumers are a little bit I guess they purchase a little bit less as a habit.

Speaker #6: So when the sun starts shining and the weather is nicer, we see it go up significantly. And we will dial this up with a lot of activities.

Speaker #6: We just announced a launch of the new Xero Orange Raspberry Survey. So not only are we launching this, but there's a marketing campaign that's going to come and support this.

Carl Goyette: Not only are we launching this, but there's a marketing campaign that's gonna come and support this. We have some spring activations in Costco, so stay tuned for that. We have some exciting stuff that's coming on the way. Obviously, purely from a field activation, especially in the convenience stores, but also in the grocery stores, spring is usually a season where we see a lot more activity than in Q1. Like November, December, January is not a big activity month for energy drinks versus the spring. A lot of exciting things coming in Canada. Too early to give you any sort of guidance on where we're gonna finish, but lots of positive things going on in the quarter.

Speaker #6: We have some spring activations in Costco. So stay tuned for that. But we have some exciting stuff that's coming on that way. And obviously, from a purely from a field activation, especially in the convenience stores, but also in the grocery stores, spring is usually a season where we see a lot more activity than in Q1.

Speaker #6: November, December, January is not a big activity month for energy drinks versus the spring. So a lot of exciting things coming in Canada. Too early to give you any sort of guidance on where we're going to finish.

Speaker #6: But lots of positive things going in the quarter.

Martin Landry: Okay. Thank you. My last question, you know, you have talked a little bit about the US. It looks like it's a growth engine for you guys. Last year, you know, you've added two new board members that are American. I was wondering, you know, how helpful have they been to unlock some opportunities for you guys in the US? If you can, you know, just give us a little bit of color as to how that's played out for you guys.

Speaker #2: Okay, thank you. And my last question—a bit about the US. It looks like it's a growth engine for you guys, and last year you added two new board members who are American.

Speaker #2: So I was wondering, how helpful have they been to unlock some opportunities for you guys in the US? If you can just give us a little bit of color as to how that's played out for you guys.

Carl Goyette: Yeah, of course. First, it's been great to bring people who have the experience, the knowledge of the US market, and people who have done it before, who understand how big of a challenge this is for us, right? Who are really deeply committed to making it work and believe in the potential of this brand. That's been very refreshing for me and the management team to be surrounded by board members like this. That's the first thing. Obviously, like, board members are not there to do our job. They're there to support us, and that's exactly what they've been doing. Like, from, I would say the biggest benefit would be around clarity and alignment around the strategy.

Speaker #6: Yeah. Of course. First, it's been great to bring people who have the experience, the knowledge, of the US market. And people who have done it before, who understand how big of a challenge this is for us, right?

Speaker #6: And who are really deeply committed to making it work and believe in the potential of this brand. So that's been very refreshing for me.

Speaker #6: And the management team to be surrounded by board members like this. So that's the first thing. Obviously, board members are not there to do our job.

Speaker #6: They're there to support us, and that's exactly what they've been doing. From—I would say—the biggest benefit would be around clarity and alignment around the strategy.

Carl Goyette: You know, we've been able to bounce this back, go back to who our G consumer is, where they shop, where we should market, what should be the right strategy. Having US board members really helped us bring clarity and alignment. That clarity and alignment really helps us from a speed of execution point of view. I would say this is at a higher level, and I understand your question might be a little bit more tactical around what do they do for you. There are a few examples of this, right?

Speaker #6: And we've been able to bounce this back, go back to who our consumer is, where they shop, where we should market, what should be the right strategy.

Speaker #6: And having US board members really helped us bring clarity and alignment. And that clarity and alignment really helps us from a speed of execution point of view.

Speaker #6: I would say this is at a higher level. And I understand your question might be a little bit more tactical around what do they do for you.

Carl Goyette: First and foremost, their role is on strategy, but they have been able to help us, like, opening doors with retailers, distributors, contacts on from a support, from a marketing support, point of view, bringing new people that can help us either on a fractional point of view or also on a permanent basis. It's been really helpful and really thankful that they're there with us.

Speaker #6: And there are a few examples of this, right? But first and foremost, their role is on strategy. But they have been able to help us open new doors—opening doors with retailers, distributors, contacts from a support, from a marketing support point of view—bringing new people that can help us either on a fractional point of view or also on a permanent basis.

Speaker #6: So it's been really helpful. And really thankful that they're there with us.

Martin Landry: Super. Thanks for all the color, guys, and best of luck.

Carl Goyette: Thank you, Martin.

Speaker #2: Super. Thanks for all the color, guys. And best of luck.

Ingy Sarraf: Thank you.

Operator 2: The next question comes from Sean McGowan with Roth Capital Partners. Please go ahead.

Operator: The next question comes from Sean McGowan with Roth Capital Partners. Please go ahead.

Speaker #6: Thank you, Martin.

Speaker #3: Thank you.

Speaker #1: And the next question comes from Sean McGowan with Roth Capital Partners. Please go ahead.

Sean McGowan: Thank you. Good morning.

Carl Goyette: Good morning, Sean.

Sean McGowan: I have a couple of modeling questions.

Speaker #4: Thank you. Good morning.

Ingy Sarraf: Good morning, Sean.

Sean McGowan: Morning, Angie. I have a couple of modeling questions, but first, I wanted to ask something kind of bigger picture, Carl. The category, both in the US and in Canada, I think it's been performing better than anybody expected, like a year ago. You know, I think we're kind of afraid that we'll be facing a lot of difficult comparisons in 2026, and so far, you know, the category is outperforming my expectations anyway. Are you as a company doing anything different because of that category growth? You know, are you more aggressive? Are you pouncing on more opportunities, or is it affecting your strategy in any other way?

Speaker #6: Good morning, Sean.

Speaker #7: Good morning, Sean.

Speaker #4: Good morning, Angie. I have a couple of modeling questions. But first, I wanted to ask something kind of bigger picture, Carl. The category, both in the US and in Canada, I think it's been performing better than anybody since a year ago.

Speaker #4: I think we're kind of afraid that we'll be facing a lot of difficult comparisons in '26. And so far, the category is outperforming my expectations, anyway.

Speaker #4: Are you, as a company, doing anything different because of that category growth? Are you more aggressive? Or are you pouncing on more opportunities? Or is it affecting your strategy in any other way?

Carl Goyette: Well, on our side, it really confirms our strategy. We're on the right path, right? We're still a very small player in this huge industry that keeps growing beyond, I would say, most people's wildest expectations. It just makes the category a lot more attractive. But for us, even if the category wasn't growing, there's still so much room for us to grow as a better for you option in this massive industry. We're happy to see the industry growing, but there's still a lot of room to grow for us, even if the industry wasn't growing. But obviously, we're happy that there's new consumers coming into this category every week, every day. It just reaffirms that we're on the right path.

Speaker #7: Well, on our side, it really confirms our strategy. We're on the right path, right? We're still a very small player in this huge industry that keeps growing beyond, I would say, most people's wildest expectations.

Speaker #7: So there is just it makes the category a lot more attractive. But for us, even if the category wasn't growing, there's still so much room for us to grow as a better-for-you option in this massive industry that we're happy to see the industry growing.

Speaker #7: But there's still a lot of room to grow for us, even if the industry wasn't growing. But obviously, we're happy that there are new consumers coming into this category every week, every day.

Carl Goyette: Because if you look at what's driving, if you dive a little bit deeper and you dive into what's driving the category growth, right, there are a few things. First, it's zero sugar. Zero sugar is really driving the growth. There's also a notion of cleaner ingredients. Sometimes it's perceived like many brands are growing and are perceived as being cleaner, even though they're not necessarily cleaner. We offer a real, clean, organic, better for you option, and we think long-term this is gonna pay off. The other thing that's really driving growth is anything around flavors, right? A lot of flavor innovations, nostalgic flavors, playing on the nostalgia and stuff. On those three fronts that are driving the growth, we are there.

Speaker #7: And

Speaker #1: It just reaffirms that we're on the right path . Because if you look at what's driving , if you dive a little bit deeper and you dive into what's driving the category growth , it's there's a few things .

Speaker #1: First is it's zero sugar , zero sugar is really driving the growth There's also a notion of cleaner ingredients . Sometimes it's perceived , like many brands are growing and are perceived as being cleaner , even though they're not necessarily cleaner .

Speaker #1: We offer real clean , organic , better for you option , and we think long term this is going to pay off . And the other thing that's really driving growth is anything around flavors .

Speaker #1: A lot of flavor innovations, nostalgic flavors, playing on nostalgia and stuff. And so we are playing in that as well.

Speaker #1: So on those three fronts that are driving the growth , we we are there , as I mentioned in my remarks , we launched six zero sugar SKUs in the last two years .

Carl Goyette: As I mentioned in my remarks, we launched six zero sugar SKUs in the last two years. I think this is remarkable. I think the team should get some credit for that. It's been a lot of work, and we're very proud of the performance of this. In a nutshell, I would say this is it. Obviously, with so much potential, the work is in our camp. There's a lot of competition because the industry is so attractive, so we need to do the work to put more eyeballs on our brand. We need to put more liquid on lips. We need to get more people to try GURU, because once they try GURU, we know how well and how much they repeat.

Speaker #1: I think it's is this is remarkable . And I think the team . Should get some credit for that . And there's been a lot of work and we're very proud of the performance of this .

Speaker #1: In a nutshell , I would say this is this is it . But obviously with so much potential , the work is in is in our camp , there's a lot of competition because the industry is so attractive .

Speaker #1: So we need to do the work to put more eyeballs on our brand . We need to put more liquid on lips . We need we need to get more people to try guru because once they try guru , we knew .

Carl Goyette: That's always been the strong part of our brand is, once people try it, they repeat so much. Need to get more people into GURU.

Speaker #1: We know how well and how much they repeat . And that's always been the strongest , the strongest part of our brand is once people try it , they repeat so much .

Sean McGowan: Yeah, that's a good segue then to the other follow-up questions, because one of the things we're hearing from the Monster and Celsius is you know new users coming in, but also more occasions, you know, kind of increased frequency or times that people will drink energy drinks that are not just, you know, I'm about to work out or I'm feeling pooped, you know, or I'm playing video games. There's a lot more occasions. Given that, does that lead to any changes in your plans for distribution, you know, outside of kind of the traditional cadre that that is so important to the category? Does it open up potential for expanding distribution even further?

Speaker #1: So we need to get more people into guru .

Speaker #2: Yeah , that's a good segue then to the other part of my question , because one of the things we're hearing from , from the monsters in Celsius is , you know , new users coming in , but also more occasions , you know , kind of increased frequency or times that people will drink energy drinks that are not just , you know , I'm about to work out or I'm feeling pooped .

Speaker #2: You know , or I'm playing video games . So there's a lot more occasions . So given that does that lead to any changes in your plans for distribution outside of the traditional cadre ?

Speaker #2: That is so important to the to the category ? Does it open up potential for expanding distribution , even further

Carl Goyette: The short answer is yes, but I would say it's all anchored in the consumer, as I've mentioned before. We start with who is the GURU consumer? Where do they shop? What are the main occasions that we can go after? What are they looking for? Once you have clarity on that, which we do, it becomes much easier to say, okay, which occasions are we going after, which retailers are we going after? Our plans in the last few years, we've been quite transparent, are aligned to that, right? We've been very clear that e-commerce, Amazon was a big portion of our plan. We've put a lot more efforts on the club channel because the category is becoming more mainstream.

Speaker #1: The short answer is yes , but I would say it's it's all anchored in the consumer . As I mentioned before , we start with who is the guru consumer ?

Speaker #1: Where do they shop ? What are the main occasions where we can go after ? What are they looking for ? And then from that , once you have clarity on that , which we do , it becomes much easier to say , okay , which occasions are we going after ?

Speaker #1: Which retailers are going after ? And our plans in the last few years , we've been quite transparent , are aligned to that right ?

Speaker #1: We've we've been very clear that e-commerce , Amazon was a was a big portion of our plan . We've put a lot more efforts on the club channel because the category is becoming more mainstream .

Carl Goyette: As the category is becoming more mainstream, it's, you know, some people are saying energy is the new soda. It's replacing some coffee occasions, right? We try to capture this. As the category is becoming more mainstream or it's a household staple, people are buying a little bit more in bulk, right? Especially the health-conscious white collar consumer that we're targeting, which is less, a little bit less of a convenience channel, especially outside of Quebec. In Quebec, our consumer is mainstream, so they do shop in convenience. Outside of Quebec, we have a consumer that tends to stock up, right, on GURU. They want to have GURU in their pantry. This is where, you know, take home format, for example, is something that we wanna look at.

Speaker #1: And as they become, the categories are becoming more mainstream. It's, you know, some people are saying energy is the new soda.

Speaker #1: It's replacing some it's replacing some coffee occasions , so we , we try to capture this . And as categories becoming more mainstream or it's a household staple , people are buying a little bit more in bulk , right ?

Speaker #1: Especially the , the health conscious white collar consumer that we're targeting , which is less , a little bit less of a convenience channel , especially outside of Quebec .

Speaker #1: And in Quebec . Our consumer is mainstream . So they do shop in convenience , but outside of Quebec , we have a consumer that's tends to stock up right on Google .

Speaker #1: They want to they want to have guru in their pantry . And this is where , you know , take home format , for example , is something that we we want to look at variety something that we are increasingly putting emphasis on .

Carl Goyette: Variety packs is something that we are increasingly putting emphasis on, right? It's really part of a how do we align with a category that's really becoming mainstream, and that's part of really multiple day parts. Energy drinks are no longer something that you consume once in a while because you're falling asleep. It's really becoming something that people have as a daily habit, and that's really what's driving the growth, right.

Speaker #1: So it's , it's really part of a , how do we align with the category that's really becoming mainstream ? And that's part of really multiple dayparts .

Speaker #1: It's no longer that energy drinks are something you consume once in a while because you're falling asleep. It's really becoming something that people have as a daily habit.

Sean McGowan: Yeah. I think another growth driver for some of the other companies has been identifying maybe where they were weak with the female consumer. I don't think that's the weakness that GURU has had traditionally, but even Celsius, which was pretty well-balanced, has picked up a lot, you know, more penetration into the female user. Is this something that, you know, you would consider or do you feel like you're already pretty well-balanced?

Speaker #1: And that's really what's driving the growth , right ?

Speaker #2: Yeah , I think another growth , growth driver for some of the other companies has been identifying maybe where they were weak with the female consumer .

Speaker #2: I don't think that's the weakness that guru has had traditionally . But even Celsius , which was pretty , pretty well balanced , has picked up a lot more penetration into the to the female user , is this something that , you know , you would consider or do you feel like you're already pretty well balanced

Carl Goyette: Yeah, we're very well-balanced. Obviously, we're more balanced than the industry. The industry has been historically a lot more masculine, and that's changing gradually, especially with some new brands that are coming that are really female specific. We have always kept this brand very balanced from that point of view, and that's our intention, like, to remain like this.

Speaker #1: Yeah , we're very well balanced . Obviously we're we're more balanced than the industry . The industry has been historically a lot more masculine .

Speaker #1: And that's changing gradually , especially with some new brands that are coming that are really female specific . We , we , we have always kept this brand very balanced from a , from that point of view .

Sean McGowan: Okay. If I can shift over to some modeling questions for Ingy. Can you talk a little bit about the phasing of revenue this year? Is there anything kind of unusual that we should expect? You know, you did call out the US being down in Q1, but up a lot in February. What other issues year-over-year should we be looking at in terms of phasing of revenue?

Speaker #1: And that's our intention to remain like this .

Speaker #2: Okay . If I can shift over to some modeling questions for , for Ng , can you talk a little bit about the phasing of revenue this year ?

Speaker #2: Is there anything kind of unusual that we should expect ? You know , you did call out the US being down in the first quarter , but up a lot in February .

Speaker #2: What other issues year over year should we be looking at in terms of phasing of revenue From from .

Ingy Sarraf: From a Q2 standpoint, even the club experience that we had in the US last year in Q1 had a bit also in Q2. Other than that, no, both in Q2 we're good on that front. In Q3, remember it was the first quarter post PepsiCo, so there was a one-time adjustment there. That's something to look out for. After that, it should be fine in Q4. We have good things planned like we did last year. I don't see any other top of mind kind of things.

Speaker #3: From a Q2 standpoint, we continued—even the club experience that we had in the US last year in Q1 had a bit also in Q2.

Speaker #3: But other than that , no , both in Q2 were were good on that front . In Q3 . Remember , it was the first quarter post PepsiCo .

Speaker #3: So there was a one time adjustment there . So that's something to look out for . And after that , it should be fine .

Speaker #3: In Q4 , we have a good things planned like we did last year . So I don't see any other other top of mind kind of thing .

Sean McGowan: Can you talk a little bit about what drove the, you know, the gross margin expansion? Was there anything unusual or is there anything that's gonna reverse itself? You know, what should we expect there at the gross margin level?

Speaker #2: Can you talk a little bit about what drove the , you know , the gross margin expansion ? Was there anything unusual or is there anything that's going to reverse itself ?

Ingy Sarraf: The gross margin expansion was really a structural change, right? That came with the direct distribution and continued promotional and trade spend, kind of rigor and discipline. Same thing from a cost standpoint. It's really structural change and not one-time items that we're seeing at the gross margin level.

Speaker #2: What should we expect there at the gross margin level?

Speaker #3: The gross margin expansion was really a structural change , right ? That came with the direct distribution and continued promotional and trade spend kind of rigor and discipline .

Speaker #3: Same thing from a cost standpoint. So it's really structural change and not a one-time item that we're seeing at the gross margin level.

Sean McGowan: Okay, helpful. These marketing expenses were lower than I thought they would be.

Speaker #2: Okay , helpful . And how about at the , the marketing expenses were lower than I thought they would be . Is that a timing issue or are you just getting a lot more bang for the buck ?

Ingy Sarraf: Mm-hmm.

Sean McGowan: Is that a timing issue or are you just getting a lot more bang for the buck?

Ingy Sarraf: Well, there's two things in there. There is of course the fact, like we've been saying, right, Sean, and you know, we're working hard to make sure we invest in high return initiatives, very targeted. There's that mindset and that discipline that's really something that we're embracing and making sure we continue. Of course, there's some timing, like Carl mentioned, much lower seasonality period in Q1. You'll see much more activity in Q2, Q3, with our innovations and with consumers coming out to play, right? Especially in Quebec, you know how it is. We just passed a severe ice storm, and we can't wait for the nice weather. What comes with that.

Speaker #3: Well , there's two things in there . There is , of course , the fact that we've been saying . Right . Sean .

Speaker #3: And you know , we're working hard to make sure we invest in high return initiatives . Very targeted . So there's that mindset and that that discipline that's really something that we're embracing and making sure we continue .

Speaker #3: And of course , there's some timing like Carl mentioned , much lower seasonality period in Q1 . You'll see much more activity in Q2 , Q3 with our innovations and with consumers coming out to play , right , especially in Quebec , you know how it is .

Speaker #3: We just passed a phase I , ice storm and we can't wait for the nice weather . It comes with activation

Sean McGowan: Tell me about it. I'm looking at my phone, and it's telling me how warm it is where I used to live. All right. Thank you very much.

Speaker #2: Tell me about it . I'm looking at my phone . It's telling me how warm it is . Where I used to live .

Speaker #2: So Thank you very much . Thank you . Thank you . Sean

Ingy Sarraf: Thank you.

Carl Goyette: Thank you, Sean.

Ingy Sarraf: Thank you.

Operator 2: This concludes our question and answer session. I would like to turn the conference back over to Carl Goyette for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Carl Goyette for any closing remarks.

Speaker #4: This concludes our question-and-answer session. I would like to turn the conference back over to Carl Goyette for any closing remarks.

Carl Goyette: I just want to thank everybody for joining us and sharing good energy. Have a great day.

Speaker #1: I just want to thank everybody for joining us and sharing good energy . Have a great day .

Operator 2: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q1 2026 Guru Organic Energy Corp Earnings Call

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