10-K: Once Upon a Farm Reports Strong Sales Growth, IPO Boosts Liquidity

Once Upon a Farm, PBC announced a 53% increase in net sales for 2025, reaching $240.7 million, driven by product innovation and expanded distribution, while narrowing its net loss and completing a significant IPO.

Summary

• Net sales increased by 53% to $240.7 million for the year ended December 31, 2025, up from $156.8 million in 2024.
• The company reported a net loss of $17.2 million for 2025, an improvement from a $23.8 million net loss in 2024.
• Gross margin decreased slightly to 42% in 2025 from 44% in 2024, primarily due to increased trade spending and changes in sales mix.
• Selling, general, and administrative expenses rose by 44% to $107.6 million in 2025, driven by increased marketing, headcount, warehouse, distribution, and public company preparation costs.
• The company completed its Initial Public Offering (IPO) on February 9, 2026, raising approximately $139.3 million in net proceeds, which were used to repay outstanding debt.
• Once Upon a Farm is a Public Benefit Corporation focused on childhood nutrition with organic, farm-fresh food, and is the #1 growth brand in its categories.
• The company has deployed over 3,400 coolers nationally as of December 31, 2025, with a goal to expand to over 15,000 in North America.
• New product launches, including Refrigerated Oat Bars and Dry Baby Snacks, contributed significantly to growth, with new products representing 40% of the portfolio and driving 74% of growth contribution in 2025.
• E-commerce sales are a strong channel, with Thrive Market revenue growing 150% and Amazon revenue growing 457% year-over-year from 2024 to 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong sales growth, a narrowing net loss, and a successful IPO that significantly improved liquidity. While profitability is not yet achieved, the operational improvements and strategic growth initiatives are promising.

Positives

• Net sales grew significantly by 53% to $240.7 million in 2025, demonstrating strong market traction and consumer demand.
• The net loss narrowed to $17.2 million in 2025 from $23.8 million in 2024, indicating improved operational efficiency despite increased expenses.
• Successful IPO in February 2026 generated $139.3 million in net proceeds, significantly improving liquidity and enabling debt repayment.
• The company is the #1 growth brand in its categories and holds a Net Promoter Score (NPS) of 45, indicating high customer loyalty and satisfaction.
• Rapid expansion of cooler installations, with over 3,400 deployed and a target of 15,000, is a key growth engine and drives incremental category growth for retailers.
• Strong innovation pipeline, with 80 new SKUs launched since 2024 (45 in 2025), contributing 74% of growth and expanding into new categories like Dry Baby Snacks and Refrigerated Oat Bars.
• High e-commerce penetration, with 40% of sales volume starting with a click in 2025, and significant growth on platforms like Thrive Market (+150%) and Amazon (+457%).
• Gross margins of 42.3% in 2025 are among the best of public company peers, supported by a strategically differentiated supply chain and ongoing optimization efforts that delivered over $25 million in annual savings.
• Commitment to social responsibility, with 73.1% of domestic ingredients sourced from EFI certified farms, and a 'A Million Meals' program in partnership with Save the Children.

Negatives

• The company continues to incur net losses, reporting $17.2 million in 2025, indicating it has not yet achieved sustained profitability.
• Gross margin decreased by 2% in 2025 compared to 2024, primarily due to increased trade spending, including slotting fees for new cooler placements.
• Selling, general, and administrative expenses increased substantially by 44% to $107.6 million in 2025, outpacing net sales growth percentage.
• Interest expense increased by 70% to $2.7 million in 2025 due to increased borrowings prior to the IPO.
• Reliance on a limited number of customers, with four customers accounting for approximately 61% of net sales in 2025, poses a concentration risk.
• The company has a history of losses, with accumulated deficit reaching $135.7 million as of December 31, 2025.

Risks

• Adverse public relations, product recalls (e.g., June 2024 Listeria recall), and product liability claims if products are contaminated, mislabeled, or cause illness/injury.
• Disruptions in operations or impact on inputs, commodities, and ingredients due to macroeconomic factors, government regulation, price increases, inflation, tariffs, or labor shortages.
• Failure to effectively manage the supply chain, including inventory levels and transportation services, leading to increased costs or inability to meet demand.
• Availability of natural, plant-rich, and organic ingredients, which are subject to factors like climate conditions, increased demand, and global unrest.
• Cybersecurity risks, including data breaches and system failures, which could result in legal/financial exposure and reputational harm.
• Damage to the reputation of the company, products, management team, or co-founders (e.g., Jennifer Garner's affiliation).
• Adverse weather conditions, natural disasters, pestilence, and climate change disrupting operations or ingredient supply.
• Failure to retain and motivate the management team or other key team members, including co-founders, or to attract new qualified talent.
• Reliance on a limited number of independent contract manufacturers and suppliers, including co-packers, for equipment, ingredients, and packaging materials.
• Loss of a significant customer or adverse actions/requirements by a significant customer, given high sales concentration.
• Changes in consumer preferences, perceptions, and spending habits in the natural food industry, particularly for kid and baby food products, or failure to develop new products that appeal to these trends.
• Inability to successfully implement growth strategies, including cooler deployment and international expansion, on a timely basis or at all.
• Disruptions in the worldwide economy, including inflation, recession, geopolitical tensions, and wars, impacting demand and costs.
• Inability to compete successfully in highly competitive markets against larger conventional and natural/organic food companies.
• Damage or disruption at any of the limited number of warehouse facilities where finished goods inventory is located.
• Customers not being obligated to continue purchasing products, or early termination/non-renewal of multiyear contracts.
• Inaccurate estimates of market opportunity and growth forecasts.
• Need for future capital for business development, with no assurance of availability on acceptable terms.
• Manufacturing capacity and expansion plans not aligning with demand, leading to underutilized assets or inability to meet growth.
• Failure of enterprise resource planning (ERP) system or deficient information sharing capabilities.
• Insufficiency or ineffectiveness of marketing and trade spending programs.
• Fluctuations in business due to promotional activities and seasonality impacting financial results.
• Inability to successfully implement initiatives to improve productivity and streamline operations to control or reduce costs.
• Significant governmental regulation and potential failure to comply, leading to penalties, recalls, or operational disruptions.
• Changes in existing laws or regulations, or adoption of new ones (e.g., front-of-package nutrition labeling, plastic pollution laws), increasing costs or affecting product appeal.
• Litigation, government investigations, or proceedings, including class action lawsuits (e.g., 'Fruit & Veggie Blend' claim).
• Inability to adequately protect intellectual property rights (trademarks, trade secrets) or claims of infringement by others.
• Information technology systems (including AI technologies) failing to perform adequately or accurately, or inability to integrate new systems.
• Changes in tax laws impacting financial position and results of operations, or limitations on using net operating losses (NOLs).
• Indebtedness potentially affecting financial condition, limiting additional financing, or increasing vulnerability to adverse conditions.
• Public benefit corporation status potentially not resulting in anticipated benefits, impacting financial performance, or leading to increased derivative litigation.
• Volatility or decline in the market price of common stock, especially given the short public trading history.
• Future sales of common stock by existing stockholders causing stock price decline due to lock-up expiry or registration rights.
• Lack of sustained active trading market for common stock or failure to meet NYSE listing standards.
• Increased costs and management time due to operating as a public company.
• Reduced disclosure requirements as an emerging growth company potentially making common stock less attractive to investors.
• Anti-takeover provisions in organizational documents making mergers or proxy contests difficult.
• Certificate of incorporation renouncing interest in certain corporate opportunities, potentially diverting opportunities to CAVU or S2G affiliates.

Future Outlook

The company anticipates continued growth by expanding brand awareness, increasing household penetration, deepening retail partnerships through cooler deployment and product assortment, and driving innovation in new product lines and functional offerings. It expects to achieve sustainable, profitable growth through ongoing operational efficiencies and strategic investments. The company also plans to expand into new retail customers and international markets. Elevated commodity and supply chain costs, including inflation, are expected to continue in 2026, but the company aims to mitigate these through diversification and operational efficiency.

Management Comments

• "We are driving systemic change in childhood nutrition with real, organic, farm-fresh food made with no added sugar, no preservatives, and nothing artificial."
• "We revolutionized the childhood nutrition category with what we believe is the first-ever cold-pressed Pouch, setting a new standard for nutrition that parents love and kids crave."
• "Our mission and commitment to our consumers guide every decision we make and are at the heart of our identity and journey ahead."
• "We believe we are the first baby through kid parent-ally brand with a deep commitment to superior, fresh products with high nutritional standards and incredible taste."
• "Our playbook is effective as we unlock incremental traffic and growth in the aisles our products are presented in, and our velocities have remained best-in-class as our distribution has expanded."
• "We believe we are a pioneer in modern childhood nutrition with a deep connection to our consumers built on trust, quality, and transparency."
• "One of the most exciting opportunities ahead of us is the opportunity to broaden our cooler installations and presence in the baby aisle."
• "We believe we have identified the right strategy to drive a broader and more emphatic cooler presence, as we have over 3,400 coolers deployed nationally as of December 31, 2025, and are well-positioned to continue to steward this initiative into a meaningful growth engine."
• "Our differentiated supply chain, along with our manufacturing and procurement expertise, enables us to produce products of the highest quality, which we believe will be difficult for new or incumbent competitors to replicate."
• "We believe we have one of the most talented C-suites in the industry for a business of our size. This is purposeful, as we are building Once Upon a Farm for the future."
• "We are confident that through innovation in new products, product line extensions, and packaging types, we will continue to drive meaningful growth for our Company."
• "We expect that our existing cash and cash equivalents, including net proceeds from our IPO, along with available borrowing capacity under the Revolving Credit Facility and Term Loan Facility, will be sufficient to support our operations for at least the next 12 months and well as to meet our cash requirements for the longer term."

Industry Context

StockSavvy.ai notes that Once Upon a Farm operates within the growing U.S. Natural and Organic Food and Beverage industry, valued at approximately $82 billion in retail sales for the 52 weeks ended December 31, 2025. The company is strategically positioned to capitalize on the secular shift towards health and wellness, particularly among younger millennials and Generation Z consumers who prioritize organic and healthy products for their children. Its focus on fresh, organic, no-added-sugar products directly addresses the increasing consumer demand for cleaner options in the childhood nutrition category, which has historically been dominated by less healthy, shelf-stable alternatives. The company's innovative cold-pressed pouches and expansion into refrigerated and dry snacks align with evolving consumer preferences for convenience without compromising quality, differentiating it from traditional competitors like Nestle S.A. and General Mills, Inc., as well as smaller organic brands.

Comparison to Industry Standards

• Once Upon a Farm's Net Promoter Score (NPS) of 45, as of January 15, 2025, significantly outpaces established category players, indicating superior customer loyalty and satisfaction compared to the broader baby and kid food market.
• The company's gross margin of 42.3% for 2025 is stated to be among the best of its public company peers, suggesting strong cost management and premium product positioning relative to the industry.
• As the #1 growth brand in its categories for the 52 weeks ended December 28, 2025, Once Upon a Farm demonstrates industry-leading growth, outperforming many competitors in the natural and organic baby and kid food segments.
• The company's e-commerce sales penetration is notably higher than competitors, with 24% of its business done online compared to a typical 10% for other brands within key retail customers, highlighting its digital channel strength.
• Once Upon a Farm is the #1 velocity Baby & Toddler Snack brand in the United States for the 12 weeks ended December 28, 2025, specifically leading in Puffs, Melts, and Toddler Bars, indicating strong product appeal and sales efficiency compared to other snack brands like Serenity Kids, Cerebelly, and Little Spoon.
• The Soft-Baked Bars, launched in 2024, are the fastest-growing brand driving segment growth in the Natural / Organic Breakfast Bar category where carried, suggesting strong performance against competitors in the $7.6 billion bar category.

Management Changes

Corporate Governance

Legal Proceedings

• The company has been named in a putative nationwide class action lawsuit alleging that its Wild Rumpus Avocado pouch should be described solely as a 'Fruit Blend' rather than a 'Fruit & Veggie Blend'.
• Previously, the company faced legal claims in California for its use of phrases like '4g Plant Protein', 'Omega-3s', and 'Excellent Source of Choline' in product descriptions, which were resolved and settled for an immaterial amount.

Related Party Transactions

• The company entered into a Director Nomination Agreement with CAVU on February 9, 2026, granting CAVU the right to nominate directors based on their beneficial ownership percentage.
• A Registration Rights Agreement was entered into on February 9, 2026, with certain stockholders, including CAVU and S2G, enabling them to sell shares without restriction under the Securities Act.
• The Amended and Restated Personal Brand Services Spokesperson/Co-Founder Master Agreement with Jennifer Garner (a director and co-founder) includes cash payments and stock option grants for her services. Upon the IPO, remaining cash payments of $7.0 million were accelerated and paid to Ms. Garner, and her stock options vested in full.

Stakeholder Impact

• **Shareholders**: The IPO and debt repayment significantly improve the company's financial stability and growth prospects, potentially increasing shareholder value. However, future equity issuances could dilute ownership, and the public benefit corporation status means directors balance shareholder pecuniary interests with other stakeholder interests, which may not always maximize short-term shareholder value.
• **Employees**: The company's remote-first policy, competitive compensation, high-quality benefits, 401(k) matching, and incentive equity compensation aim to attract and retain top talent. The new 2026 Omnibus Incentive Plan and Employee Stock Purchase Plan further incentivize employees. However, the clawback policy introduces a new layer of accountability for executive officers.
• **Customers**: Continued product innovation, expansion of distribution (especially through coolers), and a focus on high-quality, organic, and nutritious products aim to enhance customer satisfaction and loyalty. The direct-to-consumer platform provides valuable insights into customer preferences.
• **Suppliers/Farmers**: The company maintains strong relationships with contract manufacturers and suppliers, sourcing 73.1% of domestic ingredients from EFI certified farms, indicating a commitment to fair labor practices and sustainable sourcing. However, reliance on a limited number of suppliers and macroeconomic factors pose risks to supply chain stability.
• **Creditors**: The repayment of $43.0 million in outstanding debt post-IPO significantly reduces the company's leverage and improves its credit profile, making it a less risky borrower.
• **Community/Society**: As a public benefit corporation, the company is committed to driving improvements in childhood nutrition, supporting organic foods and sustainable agriculture, and engaging in community initiatives like the 'A Million Meals' program with Save the Children, aiming for a positive societal impact.

Next Steps

• Expand and extend the age distribution of end consumers upwards to establish a comprehensive baby through big kid portfolio.
• Leverage the highly disruptive baby portfolio as a critical entry point and further establish the brand as a trusted ally for parents.
• Expand presence in retail locations and optimize distribution by deepening existing product assortment through increased SKU counts.
• Continue the capital-efficient execution of the national baby cooler deployment, aiming for a footprint of more than 15,000 coolers in North America.
• Increase e-commerce retail sales and expand into new retail customers and international markets.
• Continue innovation-led category disruption by exploring new ingredient combinations, functional benefits, and formats.
• Build out the functional portfolio across formats, temperature states, and key elements such as protein, brain health support, and gut health support.
• Drive sustained, profitable growth through ongoing optimization efforts, investments in infrastructure, and scalable production platforms.
• Adopt ASU 2023-09 for financial statements for the year ending December 31, 2026, to enhance income tax disclosures.
• Evaluate the impact of ASU 2024-03 and ASU 2025-05 on consolidated financial statements and related disclosures.

Key Dates

Recommendation

Once Upon a Farm demonstrates strong growth in net sales and has significantly improved its liquidity through a successful IPO and debt repayment. The narrowing net loss and positive Adjusted EBITDA for 2025 are encouraging signs of operational improvement. However, the company still operates at a net loss, and its gross margin saw a slight decline. The business faces substantial competition and a wide array of risks, including supply chain volatility, customer concentration, and the inherent challenges of balancing public benefit objectives with shareholder value. While the growth trajectory and market positioning are compelling, the continued unprofitability and the early stage of its public market trading suggest a 'hold' recommendation. Investors should monitor the company's progress towards sustained profitability, the effectiveness of its growth strategies, and its ability to navigate competitive and macroeconomic pressures before considering a stronger position.

Keywords

Childhood Nutrition, Organic Food, Baby Food, Kids Snacks, Public Benefit Corporation, SEC Filing, 10-K, IPO, Consumer Packaged Goods, CPG, Cold-Pressed Pouches, Refrigerated Oat Bars, Dry Baby Snacks, E-commerce, Retail Distribution, Supply Chain, Financial Performance, Growth Strategy, Jennifer Garner, Corporate Governance, Risk Factors