Freshpet, Inc. Q4 FY2024 earnings call

• 2024 was a strong year with net sales growth driven by volume gains, household penetration and buy rate growth. Added ~2 million households, 800,000 of which were super heavy and heavy users. Added 1,300 new stores and nearly 900 second and third fridges. • Maintained over 99% fill rates while selling 27% more volume. Beat longer-term targets for input, quality and logistics costs, and adjusted gross margin. Added 650 basis points of adjusted gross margin in 2024 and over 1,000 basis points over two years. • In 2024, achieved positive net income for the first time, generating $0.94 per share of EPS and $154 million in operating cash flow. • Retail perspective: Added over 1,300 new stores, total stores 28,141. Total fridges 36,544. Household penetration 13.5 million households, ahead of pace to meet 20 million by 2027. • Capacity expansion: Successfully started up fifth and sixth roll lines, next bag line expected in Q1 2025. Focus on maximizing existing line throughput and developing new technologies.

Fourth quarter net sales were $262.7 million, up 22% year-over-year. Full year 2024 net sales were $975 million, up 27% year-over-year. Fourth quarter adjusted gross margin was 48.1% compared to 41.1% in the prior year period. Fiscal year 2024 adjusted gross margin was 46.5%, an increase of 650 basis points. Fourth quarter adjusted EBITDA was $52.6 million, up from $31.3 million in the prior year. Full year 2024 adjusted EBITDA was $161.8 million, up from $66.6 million in the prior year. Household penetration at year-end was 13.5 million households, up 17% year-over-year. Buy rate was up 6% year-over-year to $104.89.

• 2025 net sales expected to be approximately $1.18 billion to $1.21 billion, up 21%-24% year-over-year. • Adjusted EBITDA expected to be at least $210 million in 2025. • Raised 2027 margin targets: adjusted gross margin to 48% vs previous 45%, adjusted EBITDA margin to 22% vs previous 18%. • Anticipate modest adjusted gross margin expansion in 2025, with first quarter 2025 negatively impacted by ~150 basis points due to inventory return to normal levels. • Expect to be free cash flow positive by 2026.

• Change in pet specialty channel distribution partner may have nonrecurring effects. • Macro-economic pressures could impact sales and margins. • Competitive pressures in the pet food category. • Supply chain issues may affect capacity and fill rates.

Q: None A: None (no Q&A session after the call this quarter)