Global X Guru Index ETF Price & Performance (GURU)

We're excited to share GURU' strongest first quarter performance on record.

We remain focused on expanding in The U. S. Reinforcing our leadership position in clean energy, and progressing towards profitability. Today, we'll walk you through the key drivers of our success, how we're strengthening our position and what's ahead as we continue to execute on our strategy. Our net revenue grew by 8% to $7,700,000 fueled by strong consumer demand particularly in The U. S. Where sales momentum continues to build. U. S. Sales surged 46% year over year, reaching $2,100,000 or 27% of net revenue. Gross margin expanded to 59.5% from 52.9%. Net loss improved by 31% to $1,300,000 marking our lowest loss since Q2 of twenty twenty one. Adjusted EBITDA loss improved to $1,100,000 Our cash position remains strong at $25,200,000 with no debt. These results underscore the strength of our brand our disciplined approach to profitability and the growing consumer shift towards better for you energy options. Turning to Slide six, The U. S. Remains a major growth engine for Google. We continue to gain momentum in key channels, expand our distribution and strengthen our position in the better for you energy space. [indiscernible] continue to expand in key retail channels with natural channels can sales up 20% in Q1 over last year and Whole Foods, up 37%. [indiscernible] Our top national accounts, which represent 80% of our volume in this channel, all experienced double digit growth.

Reinforcing Glu's position as a leader in the natural energy drink segment. The Pasco Los Angeles roadshow featuring our Zero lineup allowed us to connect with health conscious consumers, increase brand trial and expand our visibility in a key growth market. At the same time, our online business continues to thrive. Amazon U. S. Consumer unit sales increased 58% in the last twelve weeks. While Amazon Canada grew 43%. Repeat purchase rates reached a non GAAP high reaching 65% in The U. S. Demonstrating strong brand loyalty. These results show that GOO is not only growing, but gaining momentum in key channels. Consumers are actively choosing good energy with no artificial sweeteners zero sucralose and zero aspartame. And GURU is delivering exactly that. Turning to Slide seven, Ag GURU innovation is a key driver of our success. It fuels our growth, strengthens our brand and reinforces our leadership a better for you energy. Our Zero Line continues to perform exceptionally well in The U. S. Reinforcing a position in the fast growing Zero Sugar Energy segment. Q2, we launched Zero Wildberry Wild Will Be Red and Wild Ice Pop in Canada. With zero Wild Ice Pop also launching in The U. S. As our fourth Zero product in that market.

While still early, we are already seeing strong initial traction reinforcing our leadership in the fast growing Zero Sugar Energy segment and highlighting the strength of consumer demand for clean, [indiscernible] Plant based alternatives. But innovation is not just about flavors. About staying true to our values. Unlike many so called better for you brands that still use artificial ingredients, Puro offers the only zero sugar organic energy drink with no sucralose in no aspartame. Consumers today are looking for clean, healthy plant based energy we're delivering it without compromise. A strong demand for authentic better free alternatives, we see significant opportunities to continue expansion in The U. S, Canada and online. I will now turn the call over to Angie Saraf, our CFO. To discuss our financial results in more details. Angie, over to you.

Thank you, Karl, and good morning, everyone. Let's take a closer look at our financial results for Q1 twenty twenty five on Slide nine. [indiscernible] delivered net revenue growth of 8%, reaching $7,700,000 driven by strong U. S. Performance and expanding consumer base. Gross profit increased by 21% to $4,600,000 supported by higher pricing and execution, and a more efficient promotional strategy. A result, gross margin expanded to 59.5% from 52.9%. Reinforcing our ability to scale profitably. At the same time, SG and A expenses improved as a percentage of net revenue. Declining to 79% from 85%. Reflecting greater operating efficiency. With these strong financial fundamentals, net loss improved by 31% to $1,300,000 marking our lowest quarterly loss since Q2 twenty twenty one. Our adjusted EBITDA loss also improved to $1,100,000 as we continue to leverage scale while driving margin expansion. On the balance sheet, we remain well positioned to fund our growth initiatives. We ended the quarter with $25,200,000 in cash and no debt. Giving us the financial flexibility to execute our strategic priorities. This compares to $25,500,000 in Q4 twenty twenty four. Our $10,000,000 in unused credit facilities further strengthens our ability to invest in high impact growth opportunities.

Let's turn to Slide 10. As we continue through fiscal twenty twenty five, our key financial priorities remain. Expanding our presence in The U. S, by increasing sales velocity and distribution optimizing gross margin through pricing execution and disciplined ensuring a seamless and flawless transition with PepsiCo, optimizing supply chain efficiencies and maintaining strong and managing costs, minimizing tariffs impact and driving efficiencies. While maintaining a strong cash position to support our long term profitable growth.

We remain confident in our past to sustain profitability. And we'll continue to execute with discipline to drive long term value for our shareholders. With that, I'll now turn the call back over to Carl for closing remarks.

Thank you, Angie. Let's turn to Slide 12. [indiscernible] Q1 was a strong start of the year. Building on the foundation laid in 2024 with our Zero Line and the momentum that has followed. Our record quarterly performance continued margin expansion and financial discipline put us in a great position to accelerate our growth in 2025. In the coming quarters, we will continue to focus our energy on areas where we expect to see to achieve significant growth. By successfully executing our transition with PepsiCo, ensuring operational excellence and uninterrupted growth. Scaling our presence in The U. S. Through innovation and expanding expanded retail distribution launching our Zero line in Canada and continuing to differentiate and optimizing our brand investment strategy to drive long term profitability. We're just getting started. Consumers are embracing clean, good energy and gurus at the forefront of this movement. With a strong momentum expanding Zero Line and disciplined execution, we are well positioned to accelerate growth in 2025 and beyond. We're excited about the opportunities ahead and look forward to continuing this journey with you. You for your time today. This concludes our formal remarks. I will now turn the call over to the operator for the Q and We will now begin the question and answer session.

And your first question today will come from Martin Landry with Stifel. Please go ahead. Hi, good morning, Karl and Angie. Good morning. Good morning, Mark. Thanks.

Karl, my first question as usual is I was I was wondering if you could provide us with the growth of your revenues at retail all channels, tracks and untracked, in Canada for the quarter, if that would be possible?

Yes. For the last twelve weeks, it'd be flat, Martin. The reason for that is December and December and January were a little bit softer we delayed some promotions that were not sustainable or not profitable, but we saw an acceleration in February with some of those permissions kicking in, namely very successful promotion at Costco and the strong start of our innovation is at Busch Tower.

So all in all, flat in tracked and untracked.

Okay. That's helpful. Ingi, I was wondering your gross margin expanded significantly this quarter. It's tracking really well sequentially. Would it be possible to provide a gross margin bridge so that we better understand all the moving parts related to your gross margin expansion? On a year over year basis?

Yes, for sure, Martin.

So yes, we're really proud that our gross margin improved significantly. So, it went up by six sixty basis points And if we break it down, the majority of it, so $590,000,000 came really from pricing and like Carl mentioned, timing and lower promotional spend. So our sales team, like he also said, made strategic decisions to discontinue some of the promotions that weren't profitable So So that's the majority of it and the remaining, the 70 basis points, were really driven by more favorable COGS. So overall, we continue on the path of a disciplined a disciplined approach for our gross margin with our pricing, with our promotions, and with our operational efficiencies.

Okay.

That's helpful. Thank you. [indiscernible] on the eve of the company transitioning its distribution in Canada. So obviously, when we look at that from an outsider, there are some risks that you could have some out of stock position at retail during that transition. So would like to understand a little bit better how you intend to mitigate that risk those risks during transition?

Yes, of course. We expect you to ask questions like this because this is an important project. We're all I'd say this is our main focus for me and pretty much the Homegirl team is focused on that transition and it's going very well so far. The best way to give you a simple answer to your question Martin would be to use the traditional eightytwenty rule. Right? So for 80% of the business for us, 80% of the business are comprised of very large corporate accounts.

Retail and wholesale, right? So it's a combination of Sobeys Kosta, Metro, Costco, Loblaws, right? These are the big guys that comprise 80% of our business in Canada. And customer sentiment has been very good. They've been very receptive. They're happy to deal with us directly again. So honestly, this is very good. We're in the final stages. I'm going to say it's all done. You're finalizing the last details, but this is in very, very good shape. Then in the 20%, right, there's a longer list of regional a lot of independents, it's call it the long tail, so a much longer list of smaller retailers that still are important, right, but that are often dependent on how our distribution is going to be structured with the bigger guys. So it's progressing. It's not as advanced. So the 20% is not as advanced as the 80%, but we're confident that we're going to be there on time. Obviously, the goal and we have a special target for the team is that there's not going to be any disruption for [indiscernible] but mainly for consumers, right? So there's going to be in the switch between like on the week one and week two, some retailers will delay an order or two for one week or two.

But it should be very transparent for consumers. And obviously, you're number one goal is to make sure we are we don't have any out of stocks in for consumers. So we're putting a lot of a lot of effort behind this, some strong promotions for transition, the sales lot of our salespeople are saying this is going to be the good old guru days. Right, because people love selling directly. As you know, we had a distribution partner that was doing sales for us and we're excited to be doing sales again directly. For salespeople, this is exciting. Okay.

Great. Thank you. And maybe my last question, with the the political tensions that we've seen recently, the by Canadian trends have emerged. And I was wondering if that had an impact on you and on your products recently?

Yes, I'm glad you asked because in the beginning, right, it's been going back and forth. It's hard to follow. And in the beginning, we were not seeing we were not seeing any accelerated momentum. But I would say that a portion of our stronger February, I would say, is is linked to this. When we look and it's very recent data, but we look at the latest weeks, we're seeing an acceleration in some of our customers For example, the Costco promotions, the strong start of innovation we've mentioned about and we look at our scan data on a weekly basis and we're seeing some acceleration. And we're starting to hear some other stories which is good news as well from other manufacturers in Canada that are seeing an acceleration in their sales. So clearly, there seems to be now something we are not necessarily seeing and retailers would have seeing in January, it seems like there is a little bit more of a movement which obviously we see very positive for Canadians to stand together for being proudly Canadian and encouraging Canadian products. So very happy with that.

Okay, cool. That's great to hear. Thank you for that's it for me.

Thank you, Martin. Thank you, Martin.

Your next question today will come from Sean McGowan with ROTH Capital Partners. Please go ahead.

Good morning. Thanks.

Good morning, Matt.

This is good morning. This is the highest quarterly gross margin I think you've had in any quarter.

Since entering the Pepsi agreement in late twenty twenty one. And thanks to the breakdown on what drove that, But would you say there are any unusual factors that drove that Like the lower promotion, should we expect that to to sustain? Or is that kind of an unusual benefit that we won't see in future quarters?

Yes. So I'll start, Karl, and feel free to jump in. [indiscernible] Sure.

Yes.

So I think it's I wouldn't call it unusual. I think we're going to sustain strong margins moving forward. I think that yet promotional activity will normalize and we know, right? We're entering the spring period with innovations coming in and summer So they will normalize in the upcoming quarters.

But I also think that we'll continue to apply our pricing discipline and continuously also improves our operations. So efficiency will also continue will continue benefiting from it. But yes, promotional activities will increase.

Okay.

Thank you. Yes. But they will improve really I think I would first want to add that, yes, they will promotional increase and we intend to have strong promotions in the future. Obviously, especially in the context of the transition. But let's all remember that when we transition, we will there will be some positive momentum for our gross margins. Remember last quarter, we spoke about that in our previous distribution prior to PepsiCo, we had gross margins that were in the 60% range. So this is still the target to go back to that 60% range. So even in promotion promotional activities normalize, we expect gross margins to improve in the future. But that's post PepsiCo transition. So the next quarter, you might see some normalization as Inji said.

Right. And that's where I was heading MacRennair's question. I mean, if you're able to get this kind of gross margin now before the benefit of that changeover, how much higher could it get? I mean, could it get to levels higher than what we saw before? Before the Pepsi distribution came on in late twenty twenty one?

It's hard to say now.

It's hard to say. That's the goal. I'd say that's the goal. It's not to commit to that now because we're finalizing price and discussions and distribution model. We'll give you full transparency. I guess the next time we speak, Sean, we'll be in June. After our Q2 call and then we'll have more of a model because at that point we will be transitioning so we will know what the new distribution model is and what the margins are and the price the pricing is. So we'll be able to better model this But yes, the goal would be to even have better margins than what we had in the past.

Okay.

And are your margins now on U. S. Sales actually lower than in Canada?

At this rate?

No, they're very comparable.

Thank you. A question following up on my 's question about the risks of this transition. Can you what can you tell us about the new distributors you're working with? And what does the changeover do to your ability to forecast your shipments compared to how it was working with much larger big guy like Pepsi?

We can't tell you much about the new distribution system because we intend to obviously make formal announcements as we go. But one thing is it's going to be like clearly from a forecasting perspective, like having a direct distribution model has significant benefits for us in terms of first, driving performance. We think that we will be better at driving performance we deal directly with retailers. Right? It will also improve our ability to forecast because we will be building promotional calendars with them and promotions and how we work and we'll know exactly what the planogram is going to be and when we intend So just more information will give us better ability to forecast. And if you look at how good we were at forecasting prior, having an exclusive distributor versus before after, Like we were caught a few times with big inventory fluctuations, for example, that we did not see coming. Obviously, that will not be the case because we will control a lot more of the inventory. So to your question on our ability to forecast, we obviously think it's going to be easier, not necessarily in this transition, I would say like Q2 and Q3 because of transition, it's going to be harder to control how much invent how much initial inventory new distributors are going to take.

And then when exactly is Patrico going to start depleting the inventory they have? There's going to be a little bit of a transition But post that transition, we think we're going to be able to drive a stronger performance, stronger forecasting and better overall control on our business.

I don't know if Angie, you wanted to add anything from an impact on financial impact of this or SG and A and all that? Or I think we're committed to finding to really planning our SG and A care structure. So yes, it will fluctuate in the short term, but I believe that you'll see some improvements since we want to return to profitability and that doesn't change.

Okay. My last question is about the reduction in inventory. I would have thought that as you prepare for this switchover, you might actually see an increase in inventory kind of getting ready to to handle buffer or just handle on your own. So should we expect to see that in the second quarter? So I mean, it was a pretty big source of cash. In the first quarter. Should we see that reverse itself?

Yes. You could see some small fluctuations in the coming quarter to your point. But overall, we're trying to tighten our inventory as much as possible because to your point, because of the cash pull that it takes.

But yes, we want to make sure we're secure. We want to make sure our retailers and our new customers will have enough inventory on hand and we're able to fulfill, especially considering also the demand we're seeing with our new zero lines. And what's going on as well on the other side of the border, right? We're managing this very proactively in a way that's sustainable in the long term and in the short term.

Okay. Good luck and elbows up.

Thank you, Sun.

Thank you, Sun.

Would like to turn the conference back over to Carl Goiette for any closing remarks.

I just want to simply thank everybody for joining and have a great day.

The conference has now concluded. Thank you for attending today's presentation. May now disconnect. [indiscernible]