Vita Coco Company, Inc.
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
COCO$62.45-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001482981-24-000127
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001482981-25-000082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 120 previous paragraphs and 118 current paragraphs.
74 unchanged; 28 reworded; 16 added; 18 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
During the first quarter of 2025, the U.S. government announced tariffs on certain imports, including imports from Mexico, and Canada. We currently believe that our production in Mexico and Canada is exempt from these tariffs under the United States-Mexico-Canada Agreement ("USMCA"). On April 2, 2025, the U.S. announced a new universal baseline tariff of 10%, plus significant additional country-specific tariffs for select trading partners, on all U.S. imports. The reciprocal country-specific tariffs were subsequently paused for 90 days on most countries. The uncertainty around the long-term tariff rates that could be applied to our importation of products into the U.S. presents significant challenges to our operations and supply chain, and may result in future results being significantly different than any outlook given. We cannot predict what additional actions might be considered or implemented by the U.S. or its trade partners, particularly in the current geopolitical environment. We anticipate that the imposition of the baseline 10% tariff will increase our cost of goods sold. The uncertainty could also cause disturbances in ocean shipping capacity that could affect our ability to secure ocean freight containers for our products, and create inflationary effects on our costs, in addition to the direct impact of tariffs. We are closely monitoring the evolving tariff landscape and attempting to mitigate these impacts, including using pricing adjustments, sourcing strategies and other cost-mitigation measures. However, there can be no assurance that we will be able to fully mitigate the impacts of such tariffs or that the imposition of tariffs, and the resulting economic impact on the U.S. market and consumer, will not be material to our financial results. We primarily source from the Philippines and Brazil, with additional sourcing from Sri Lanka, Thailand, Malaysia, Vietnam, Canada, and Mexico. There have been significant proposed reciprocal tariffs on certain of these countries. At this time, the overall impact on our business related to tariffs remains uncertain and depends on multiple factors, including the duration and potential expansion of current tariffs, future changes to tariff rates, scope, or enforcement, reciprocal measures by impacted trade partners, inflationary effects, changes to consumer purchasing behavior, and the effectiveness of our responses in managing these challenges.
Current report
Our sales to one of our major customers include branded and private label product. As discussed in our Form 10-K, the private label coconut oil business with this customer discontinued in early 2024 and we expect private label coconut water net sales with this customer to be impacted by the loss of some regions during 2025.
Current report
Volume in Case Equivalents
Current report
Vita Coco Coconut Water net sales increased $16.6 million, or 23.9%, to $86.1 million for the three months ended March 31, 2025, from $69.5 million for the three months ended March 31, 2024. The increase was the result of CE volume growth of 23.5% due to increased demand.
Current report
Net sales from Other products increased by $3.0 million, or 130.2%, to $5.3 million for the three months ended March 31, 2025 from $2.3 million for the three months ended March 31, 2024, primarily due to the national rollout of Vita Coco Treats.
Current report
International net sales increased by $2.7 million, or 17.4%, to $18.3 million for the three months ended March 31, 2025, from $15.6 million for the three months ended March 31, 2024. The increase of 27.2% is primarily driven by CE volume growth in Germany and the United Kingdom.
Current report
Vita Coco Coconut Water net sales increased by $3.5 million, or 36.3%, to $13.2 million for the three months ended March 31, 2025, from $9.7 million for the three months ended March 31, 2024. The increase was driven by higher volume in both Europe and the Asia Pacific region due to strong demand of our product.
Current report
Private label net sales decreased $0.4 million, or 7.6%, to $4.8 million for the three months ended March 31, 2025 from $5.2 million for the three months ended March 31, 2024. The decrease was driven primarily by a decrease in the private label coconut oil business, partially offset by growth in private label water.
Current report
Net sales from Other products decreased 51.3% for the three months ended March 31, 2025, primarily driven by the decrease in sales of Vita Coco coconut oil.
Current report
On a consolidated basis, cost of goods sold increased by $18.3 million, or 28.4%, to $82.8 million for the three months ended March 31, 2025, from $64.5 million for the three months ended March 31, 2024. On a consolidated and segment basis, the increase was primarily driven by higher sales volume and higher rates for finished goods and transportation costs.
Current report
During the three months ended March 31, 2025, SG&A increased by $0.6 million, or 2.0%, versus the three months ended March 31, 2024. The increase in SG&A expense was primarily driven by an increase of $1.8 million in personnel related expenses for the three months ended March 31, 2025 versus the prior year period, and $0.4 million related to the overlap of rent expense for the new New York and London offices with that of the current offices. This increase was partially offset by a $2.0 million decrease in selling related expenses.
Current report
Foreign Currency Gain
Current report
Other Income
Current report
For the three months ended March 31, 2025, the change in Other income is due to the sale of intellectual property.
Current report
(c)Other adjustments include $0.6 million related to a one-time 2023 incentive program that is measured based on full-year 2025 performance and is structured differently from our other ongoing employee incentive programs, and $0.4 million of non-cash rent charges related to our new New York City office that overlap with our current New York City office rent charges. These amounts were offset by $0.1 million of partial recoveries of prepaid inventory from a supplier (refer to the 2024 Form 10-K for further details) and a gain of $0.2 million from a sale of intellectual property.
Current report
During the three months ended March 31, 2025, cash used in operating activities increased $9.5 million compared to the three months ended March 31, 2024, driven by timing differences in the collection of accounts receivable and payments made in the three months ended March 31, 2025 period for inventory build-up during the end of 2024. The decreases in operating cash used were partly offset by an increase in net income after non-cash adjustments.
Removed paragraphs (18)
Previous report
In early October 2024, the east coast ports of America experienced a labor strike that temporarily shut those ports, resulting in some delays even after the ports reopened. The work stoppage was temporarily resolved, but certain matters are still being negotiated, with a deadline for resolving these issues set as January 2025. It is possible that we may experience a port stoppage related to these negotiations in early 2025 if agreement is not reached. Related to the October 2024 work stoppage, some of the ocean freight carriers issued notices of impending surcharges to be applied if the port closures resulted in disruptions. We currently do not expect to pay any of these surcharges, but if further port disruptions occur in early 2025, we may see similar attempts to charge customers disruption-related charges.
Previous report
Interest Expense
Previous report
Interest expense consists of interest payable on our credit facilities and vehicle loans.
Previous report
Volume in Case Equivalent
Previous report
Vita Coco Coconut Water net sales increased by $4.3 million, or 4.8%, to $94.0 million for the three months ended September 30, 2024, from $89.7 million for the three months ended September 30, 2023. The increase was the result of CE volume growth of 2.9% coupled with net pricing benefits. Vita Coco Coconut Water net sales increased by $8.2 million, or 3.2%, to $262.0 million for the nine months ended September 30, 2024. The increase was primarily driven by net pricing benefits due to the timing of pricing promotions with a CE volume increase of 0.6%.
Previous report
Net sales from Other products decreased by $1.0 million, or 35.6%, to $1.7 million for the three months ended September 30, 2024 from $2.7 million for the three months ended September 30, 2023, driven by a CE volume decrease of 38.9% due to lower sales of innovation products and cycling of opportunistic commodity sales. Net sales from Other products decreased by $0.6 million, or 7.7%, to $6.9 million for the nine months ended September 30, 2024.
Previous report
International net sales increased by $3.2 million, or 18.6%, to $20.7 million for the three months ended September 30, 2024, from $17.4 million for the three months ended September 30, 2023. The increase is primarily driven by CE volume growth of 17.4%. International net sales increased by $7.1 million, or 14.5%, to $55.9 million for the nine months ended September 30, 2024, from $48.8 million for the nine months ended September 30, 2023. The increase is primarily driven by CE volume growth of 10.9%.
Previous report
Vita Coco Coconut Water net sales increased by $3.5 million, or 31.1%, to $14.9 million for the three months ended September 30, 2024, from $11.3 million for the three months ended September 30, 2023. The increase was driven by both Europe and the Asia Pacific region which both had strong net sales and volume performance. Vita Coco Coconut Water net sales increased by $4.9 million, or 14.5%, to $38.5 million for the nine months ended September 30, 2024 from $33.6 million for the nine months ended September 30, 2023. The increase was primarily driven by strong growth in Europe partially offset by lower volumes in the Asia Pacific region.
Previous report
Private label net sales decreased by $0.6 million, or 11.5%, to $4.8 million for the three months ended September 30, 2024 from $5.4 million for the three months ended September 30, 2023. The decrease was driven primarily by supply constraints along with some impact from the expected decrease in private label coconut oil. Private label net sales increased by $1.6 million, or 12.4%, to $14.8 million for the nine months ended September 30, 2024, from $13.1 million for the nine months ended September 30, 2023. The increase was driven primarily by Europe, which had strong volume driven by new distribution, partially offset by the private label coconut oil decrease.
Previous report
Net sales from Other products increased 51.0% for the three months ended September 30, 2024 and 29.4% for the nine months ended September 30, 2024 largely due to opportunistic commodity sales.
Previous report
On a consolidated basis, cost of goods sold decreased by $0.5 million, or 0.7%, to $81.3 million for the three months ended September 30, 2024, from $81.9 million for the three months ended September 30, 2023. On a consolidated and segment basis, the decrease was primarily related to the overall lower CE volume and lower finished goods costs which were partly offset by transportation cost increases. Cost of goods sold decreased by $15.3 million, or 6.2%, to $231.2 million for the nine months ended September 30, 2024. On a consolidated basis, the decrease was primarily related to lower finished goods costs, which were partially offset by volume CE growth and higher transportation costs.
Previous report
During the three months ended September 30, 2024, SG&A decreased by $1.7 million, or 5.2%, versus the three months ended September 30, 2023. The decrease was primarily driven by reduced marketing expense of $1.8 million due to reduced spending in light of product supply constraints. During the nine months ended September 30, 2024, SG&A decreased by $1.9 million, or 2.1%, versus the nine months ended September 30, 2023. The decrease was primarily driven lower marketing expense of $4.6 million and reduced bad debt expense of $0.9 million, partially offset by increased personnel related expenses of $3.6 million.
Previous report
Foreign Currency Gain/(Loss)
Previous report
Interest Expense
Previous report
The change in interest expense is immaterial.
Previous report
(c)Reflects other non-recurring expenses related to costs associated with two secondary offerings in which Verlinvest Beverages SA sold shares of the Company in an underwritten public offering that closed on May 26, 2023 and a block trade that was executed on November 9, 2023. The amounts for the three and nine months ended September 30, 2023 relate to costs for the May 26, 2023 offering. The amounts for the three and nine months ended September 30, 2024 relate to an expense waiver of certain costs incurred during the November 9, 2023 block trade. The Company did not receive any proceeds from the sale of the shares. For additional information regarding the expense waiver for the three and nine months ended September 30, 2024, see Note 14, Related Party Transactions, in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Previous report
(d)Reflects other charges primarily related to the impairment loss of assets held for sale in 2023 and other non-recurring expenses.
Previous report
During the nine months ended September 30, 2024, cash provided by operating activities decreased $34.0 million compared to the nine months ended September 30, 2023. The decrease in cash provided by operating activities was primarily driven by higher inventory purchases partly offset by increase in net income, net of non-cash adjustments.
Reworded paragraphs (28)
Previous wording
The Vita Coco Company is a leading platform for brands in the functional beverage category. We pioneered packaged coconut water in 2004 and have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world. We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water.
Current wording
The Vita Coco Company pioneered packaged coconut water in 2004 and have extended our business into other categories. Our mission is to deliver great tasting, natural and nutritious products that we believe are better for consumers and better for the world. We are one of the largest brands globally in the coconut and other plant waters category, and a large supplier of private label coconut water.
Previous wording
Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the United States, and also includes coconut oil, juice, and milk offerings. Our other brands include Ever & Ever, a sustainably packaged water, and PWR LIFT, a protein-infused fitness drink. We also offered Runa, a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023. We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies.
Current wording
Our branded portfolio is led by our Vita Coco brand, which is the leader in the coconut water category in the United States, and also includes coconut oil, juice, and milk offerings. Our other brands include Ever & Ever, a sustainably packaged water, and PWR LIFT, a protein-infused fitness drink. We also previously offered Runa, a plant-based energy drink inspired by the guayusa plant native to Ecuador, which we ceased selling in December 2023. We supply private label products to key retailers in both the coconut water and coconut oil categories. Additionally, we generate revenue from bulk product sales to beverage and food companies.
Previous wording
As of September 30, 2024, we source our coconut water from a diversified global network of 15 factories across six countries supported by thousands of coconut farmers. As we do not own any of these factories, our supply chain is a fixed asset-lite model designed to better react to changes in the market or consumer preferences. We also work with co-packers in America and Europe to support local packaging and repacking of our products to better service our customers’ needs.
Current wording
As of March 31, 2025, we source our coconut water from a diversified global network of 16 factories across six countries supported by thousands of coconut farmers. As we do not own any of these factories, our supply chain is a fixed asset-lite model designed to better react to changes in the market or consumer preferences. We also work with co-packers in U.S., Canada, Mexico, and Europe to support local packaging and repacking of our products to better service our customers’ needs.
Previous wording
Vita Coco is available in over 30 countries, with our primary markets in North America, the United Kingdom and China. Our primary markets for private label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce and food service channels. We are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports and educational institutions.
Current wording
Vita Coco is available in over 35 countries, with our primary markets located in North America, the United Kingdom and Germany. Our primary markets for private label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce and food service channels. Our products are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports and educational institutions.
Previous wording
Uncertainty in the macroeconomic environment resulting from geopolitical and economic instability (including the effects of current wars and other international conflicts) and variability in interest rates, foreign exchange rates and inflationary cost environments may affect our global supply chain. It is not currently possible to ascertain the overall impact of these macroeconomic uncertainties on the Company’s business, results of operations, financial condition or liquidity. Future events and effects related to these macroeconomic uncertainties cannot be determined with precision and actual results could significantly differ from estimates or forecasts. For a further discussion of the risks and challenges posed by these events, please see Part I, Item 1A. “Risk Factors” of the Form 10-K.
Current wording
Uncertainty in the macroeconomic environment resulting from geopolitical and economic instability (including the effects of current wars and other international conflicts) and variability in interest rates, foreign exchange rates, tariffs and other import related fees, and inflationary cost environments may affect our global supply chain. Additionally, the extent and duration of tariffs imposed by the U.S. government on other countries and reciprocal tariffs placed on U.S. goods in response thereto remains uncertain and may depend on various factors, including negotiations and relationships between the U.S. and affected countries, tariff exemptions, negative sentiment toward U.S. companies and products, and availability of domestic alternatives in our supply chain. It is not currently possible to ascertain the overall impact of these macroeconomic uncertainties on our business, results of operations, financial condition or liquidity. Future events and effects related to these macroeconomic uncertainties cannot be determined with precision and actual results could significantly differ from estimates or forecasts. For a further discussion of the risks and challenges posed by these events, please see Part I, Item 1A. “Risk Factors” of the Form 10-K.
Previous wording
The Company provides trade promotions and sales discounts to its customers and distributors. Since these sales promotions and sales discounts do not meet the criteria for a distinct good or service, they are primarily accounted for as a reduction of revenue and include payments to customers and distributors for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices. These condensed consolidated financial statements include accruals for these promotion and discounts. The accruals are made for invoices that have not yet been received as of the end of the reporting period and are recorded as a reduction of sales, and are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels.
Current wording
We provide trade promotions and sales discounts to its customers and distributors. Since these sales promotions and sales discounts do not meet the criteria for a distinct good or service, they are primarily accounted for as a reduction of revenue and include payments to customers and distributors for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices. The accompanying condensed consolidated financial statements include accruals for these promotions and discounts. The accruals are made for invoices that have not yet been received as of the end of the reporting period and are recorded as a reduction of sales, and are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels.
Previous wording
Selling, general and administrative expenses ("SG&A") include marketing expenses, promotional expenses, and general and administrative expenses. Marketing and promotional expenses consist primarily of costs incurred promoting and marketing our products and are primarily driven by investments to grow our business and retain customers. General and administrative expenses include payroll, employee benefits, stock-based compensation, broker commissions and other headcount-related expenses associated with supply chain & operations, finance, information technology, human resources and other administrative-related personnel, as well as general overhead costs of the business, including research and development for new innovations, rent and related facilities and maintenance costs, depreciation and amortization, and legal, accounting, and professional fees. We expense all SG&A as incurred.
Current wording
Selling, general and administrative expenses ("SG&A") include marketing expenses, promotional expenses, and general and administrative expenses. Marketing and promotional expenses consist primarily of costs incurred promoting and marketing our products and are primarily driven by investments to grow our business and retain customers. General and administrative expenses include payroll, employee benefits, stock-based compensation, broker commissions and other headcount-related expenses associated with supply chain & operations, finance, information technology, human resources and other administrative-related personnel, as well as general overhead costs of the business, including research and development for new innovations, rent and related facilities and maintenance costs, depreciation and amortization, and legal, accounting, and professional fees.
Previous wording
•Private Label—This product category consists of all private label product offerings, which includes coconut water and oil. The Company determined the production and distribution of private label products represents a distinct performance obligation. Since there is no alternative use for these products and the Company has the right to payment for performance completed to date, the Company recognizes the revenue for the production of these private label products over time as the production for open purchase orders occurs, which may be prior to any shipment.
Current wording
•Private Label—This product category consists of all private label product offerings, which includes coconut water and coconut oil. The Company determined the production and distribution of private label products represents a distinct performance obligation. Since there is no alternative use for these products and the Company has the right to payment for performance completed to date, the Company recognizes the revenue for the production of these private label products over time as the production for open purchase orders occurs, which may be prior to any shipment.
Previous wording
•Other—This product category consists of all other products, which includes Runa(until we ceased selling it in December 2023), Ever & Everand PWR LIFT product offerings, Vita Coco product extensions beyond coconut water, coconut milk products, and other revenue transactions (e.g., bulk product sales). For these products, control is transferred upon customer receipt, at which point the Company recognizes the transaction price for the product as revenue.
Current wording
•Other—This product category consists of all other products, which includes Vita Coco product extensions beyond coconut water, consisting of coconut milk products, including Vita Coco Treats; Ever & Ever and PWR LIFT product offerings; Vita Coco coconut oil sold internationally; and other revenue transactions (e.g., bulk product sales). For these products, control is transferred upon customer receipt, at which point the Company recognizes the transaction price for the product as revenue.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Comparison of the Three Months Ended March 31, 2025 and 2024
Previous wording
The following table summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023, respectively:
Current wording
The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024, respectively:
Previous wording
For the three months ended September 30, 2024, the primary driver of the consolidated net sales decrease of 3.7% was a 36.8% decrease in private label net sales, which was in part due to the transition out of private label coconut oil sales to a key customer, coupled with lower private label coconut water volumes, which were impacted by supply constraints. Vita Coco Coconut Water net sales increased 7.8% with a case equivalents ("CE") volume increase of 6.3%. For the nine months ended September 30, 2024, the net sales increase of 0.3%, was driven by Vita Coco Coconut Water, which had a 4.5% net sales increase, partially offset by private label net sales decrease of 13.1%.
Current wording
For the three months ended March 31, 2025, the primary driver of the consolidated net sales increase of 17.2% was strong Vita Coco Coconut Water volume growth. Vita Coco Coconut Water net sales increased 25.4%, with a case equivalents ("CE") volume increase of 25.2%. This was partially offset by a 11.8% decrease in private label net sales, which was in part due to the transition out of private label coconut oil sales to a major customer, partially offset by higher private label coconut water volumes.
Previous wording
The following table provides a comparative summary of the percentage change in our volume in CE for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, by operating segment and product category:
Current wording
The following table provides a comparative summary of the percentage change in our volume in CE for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, by operating segment and product category:
Previous wording
Americas net sales decreased $8.4 million, or 7.0%, to $112.2 million for the three months ended September 30, 2024 from $120.6 million for the three months ended September 30, 2023. The decrease was primarily driven by CE volume decline in private label due to the transition out of private label oil at a key customer and supply constraints impacting private label coconut water shipments, which was partially offset by Vita Coco Coconut Water CE volume growth of 2.9%. Americas net sales decreased $5.8 million, or 1.7%, to $332.8 million for the nine months ended September 30, 2024 from $338.7 million for the nine months ended September 30, 2023. The decrease was primarily driven by an decrease in CE volume of 1.7%.
Current wording
Americas net sales increased $16.5 million, or 17.2%, to $112.6 million for the three months ended March 31, 2025 from $96.1 million for the three months ended March 31, 2024. The increase was primarily driven by CE volume growth of 23.5% of Vita Coco Coconut Water and private label coconut water growth, partially offset by private label oil due to the transition out of private label coconut oil at a major customer.
Previous wording
Private label net sales decreased by $11.8 million, or 41.6%, to $16.5 million for the three months ended September 30, 2024, from $28.3 million for the three months ended September 30, 2023, due to the expected decrease in the private label oil business and supply constraints driving CE volume decline of 32.1%. Private label net sales decreased by $13.5 million, or 17.4%, to $63.9 million for the nine months ended September 30, 2024, due to the expected private label oil decrease in addition to supply constraints, with a CE volume decline of 7.6%.
Current wording
Private label net sales decreased $3.1 million, or 12.7%, to $21.2 million for the three months ended March 31, 2025, from $24.3 million for the three months ended March 31, 2024, due to a decrease in the private label coconut oil business, resulting in CE volume decline of 2.3%. The decrease was partially offset by 7.2% CE volume growth in private label coconut water.
Previous wording
On a consolidated basis, gross profit decreased by $4.6 million, or 8.2%, to $51.6 million for the three months ended September 30, 2024, from $56.2 million for the three months ended September 30, 2023. Gross margin decreased approximately 1.9% percentage points to 38.8% for the three months ended September 30, 2024, as compared to 40.7% for the three months ended September 30, 2023. The decrease in gross profit resulted from the lower CE volume and consequent net sales, along with higher transportation costs, which were partially offset by lower finished goods costs and improved net pricing on Vita Coco Coconut Water. Gross profit increased by $16.6 million, or 11.7%, to $157.5 million for the nine months ended September 30, 2024. The increase resulted from volume CE growth and lower finished goods costs, partly offset by higher transportation costs.
Current wording
On a consolidated basis, gross profit increased by $0.9 million, or 1.9%, to $48.1 million for the three months ended March 31, 2025, from $47.2 million for the three months ended March 31, 2024. The increase in gross profit resulted from higher CE volume and slightly improved net pricing on Vita Coco Coconut Water, which were partially offset by higher finished goods and transportation costs. The decrease in gross margin resulted from higher year-on-year ocean freight rates and finished goods product costs, partially offset by branded coconut water pricing and favorable product mix.
Previous wording
For the three months ended September 30, 2024 and 2023, we recorded gains of $2.6 million and losses of $4.0 million, respectively, for the mark-to-market changes in fair value on the outstanding derivative instruments for forward foreign currency exchange contracts, with the largest gain for the three months ended September 30, 2024 related to the contracts hedging the BRL and THB. For the nine months ended September 30, 2024 and 2023, we recorded losses of $5.9 million and losses of $1.8 million, respectively, for the mark-to-market changes in fair value on the outstanding derivative instruments for forward foreign currency exchange contracts, with the largest loss for the nine months ended September 30, 2024 related to the contracts hedging the BRL, partially offset by gains on THB, GBP, and CAD hedges.
Current wording
For the three months ended March 31, 2025 and 2024, we recorded gains of $2.8 million and losses of $2.5 million, respectively, for the mark-to-market changes in fair value on the outstanding derivative instruments for forward foreign currency exchange contracts, with the largest gain for the three months ended March 31, 2025 related to the contracts hedging the BRL and THB.
Previous wording
For the three months ended September 30, 2024, the change in foreign currency gain was $1.8 million as compared to September 30, 2023. For the nine months ended September 30, 2024, the change in foreign currency gain was $0.9 million as compared to September 30, 2023. The change in all periods was a result of movements in various foreign currency exchange rates related to transactions denominated in currencies other than the functional currency.
Current wording
For the three months ended March 31, 2025, the change in foreign currency gain was $0.5 million as compared to March 31, 2024. The change in all periods was a result of movements in various foreign currency exchange rates related to transactions denominated in currencies other than the functional currency. See "Quantitative and Qualitative Disclosures about Market Risk -Foreign Currency Exchange Risk" for further information.
Previous wording
For the three months ended September 30, 2024, the increase in interest income was $1.1 million as compared to September 30, 2023. The increase was primarily due to higher levels of cash invested with financial institutions during the third quarter of 2024 compared to the third quarter of 2023. For the nine months ended September 30, 2024, the change in interest income was $3.9 million as compared to the same period ending September 30, 2023. The increase in interest income period over period was due to the cash investment program that began in April 2023, in addition to higher levels of cash invested with financial institutions compared to prior year.
Current wording
The change in interest income was immaterial.
Previous wording
For the nine months ended September 30, 2024 and 2023 our effective tax rate was 23.9% and 20.2%, respectively. The effective tax rate for the current period is higher than the US statutory rate of 21% primarily as a result of state income taxes for the US company and other nondeductible expenses for tax purposes, and is partially offset by lower statutory tax rates in countries outside the US that we operate in. The change in effective tax rates between the periods is primarily driven by the jurisdictional mix of our pre-tax profits and the impact of higher non-deductible expenses this year related to covered employees' compensation in relation to the pre-tax profits.
Current wording
For the three months ended March 31, 2025 and 2024, our effective tax rate was 22.5% and 21.0%, respectively. The effective tax rate for the period is higher than the U.S. statutory rate of 21% primarily as a result of state income taxes for the U.S. company and other nondeductible expenses for tax purposes, and is partially offset by lower statutory tax rates in countries outside the U.S. that the Company operates in. The increase in the effective tax rate when comparing the periods was primarily driven by the increase in pre-tax profits in jurisdictions outside the U.S. with higher statutory tax rates and the relative impact of other nondeductible expenses in relation to the pre-tax profits.
Previous wording
These non-GAAP measures are a key metric used by management and our Board of Directors to assess our financial performance. We present these non-GAAP measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance and because we believe it is useful for investors to see the measures that management uses to evaluate the Company.
Current wording
These non-GAAP measures are a key metric used by management and our Board to assess our financial performance. We present these non-GAAP measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance and because we believe it is useful for investors to see the measures that management uses to evaluate the Company.
Previous wording
Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans. We had $156.7 million and $132.5 million of cash and cash equivalents as of September 30, 2024 and December 31, 2023, respectively. From time to time, we may supplement our liquidity needs with incremental borrowing capacity under the 2020 Credit Facility.
Current wording
Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans. We had $153.6 million and $164.7 million of cash and cash equivalents as of March 31, 2025 and December 31, 2024, respectively. From time to time, we may supplement our liquidity needs with incremental borrowing capacity under the 2020 Credit Facility.
Previous wording
During the nine months ended September 30, 2024, cash used in investing activities was $0.8 million as compared to $0.5 million for the nine months ended September 30, 2023, the increase was due to equipment purchases and higher technology related capital expenditures.
Current wording
During the three months ended March 31, 2025, cash used in investing activities was $0.6 million as compared to $0.1 million for the three months ended March 31, 2024. The increase was primarily due to capital expenditures related to the new New York and London offices.
Previous wording
During the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, net cash used by financing activities was $16.3 million higher primarily driven by share repurchases that occurred in 2024 and lower proceeds from stock award exercises. See Note 10, Stockholders' Equity, for further discussion on share repurchases.
Current wording
During the three months ended March 31, 2025 compared to the three months ended March 31, 2024, net cash used by financing activities decreased by $8.0 million, primarily driven by less share repurchases in the three months ended March 31, 2025 compared to the prior year period. See Note 10, Stockholders' Equity, in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, for further discussion on share repurchases.
Previous wording
In May 2020, the Company entered into the 2020 Credit Facility, which currently provides for committed borrowings of $60 million. The maturity date on the 2020 Credit Facility is May 12, 2026.
Current wording
In May 2020, the Company entered into the 2020 Credit Facility, which currently provides for committed borrowings of $60 million. On February 14, 2025, the 2020 Credit Facility was amended, extending the maturity five years to February 13, 2030.
Previous wording
Starting in December 2022, borrowings on the 2020 Credit Facility bear interest at rates based on either: 1) a fluctuating rate per annum determined to be the sum of Daily Simple SOFR plus the Spread; or 2) a fixed rate per annum determined to be the sum of the Term SOFR plus the Spread. The Spread ranges from 1.00% to 1.75%, which is based on the Company’s leverage ratio (as defined in the credit agreement) for the immediately preceding fiscal quarter as defined in the credit agreement. In addition, the Company is currently subject to an unused commitment fee ranging from 0.10% and 0.20% on the unused amount of the line of credit, with the rate being based on the Company’s leverage ratio (as defined in the credit agreement).
Current wording
Starting in December 2022, borrowings on the 2020 Credit Facility bear interest at rates based on either: 1) a fluctuating rate per annum determined to be the sum of Daily Simple SOFR plus the Spread; or 2) a fixed rate per annum determined to be the sum of the Term SOFR plus the Spread. The Spread ranges from 1.00% to 1.75%, which is based on the Company’s leverage ratio (as defined in the credit agreement) for the immediately preceding fiscal quarter as defined in the credit agreement. In addition, the Company was subject to unused commitment fees ranging from 0.10% and 0.20% on the unused amount of the line of credit in the year ended December 31, 2024, with the rate based on the Company’s leverage ratio (as defined in the credit agreement). As of February 14, 2025, the effective date of the amendment, the unused commitment fees ranges from 0.13% and 0.23% on the unused amount of the line of credit, with the rate being based on the Company’s leverage ratio (as defined in the credit agreement).
Previous wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K and the notes to the unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q. During the nine months ended September 30, 2024, there were no material changes to our critical accounting policies from those discussed in the Form 10-K.
Current wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K and the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies from those discussed in the Form 10-K.
Previous wording
A description of recently adopted and issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.
Current wording
A description of recently adopted and issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements, included in this Quarterly Report on Form 10-Q.