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Guru Organic Energy, which had long operated profitably before going public in 2020, finally returned to the black in its fiscal Q3 even as its topline hit a record $10.4 mil (Canadian), up 31.4% from year-earlier. Gross margin widened to 65.9% from 55.4% excluding 5.4-pt one-time lift as co accounted for exit from PepsiCo as strategic distribution partner in Canada. Net income of $1.3 mil, also a record, reversed prior-year loss of $2.2 mil. Guru shares, which have been on a tear since mid-Aug, spiked further in trading today. Tho Montreal-based co has poured its resources mainly into Canada, both its Quebec bastion and English-speaking provinces, smaller US biz continues to grow. For Q3, sales rose 16.4% to $1.8 mil, fueled by innovations like Zero Wild Berry flavor that's on track to become top sku at launch partner Whole Foods. Sales on Amazon are booming, including 96% pop on Prime Day, and brand refresh has yielded 3X the engagement of typical category benchmarks, prexy/CEO Carl Goyette enthused on earnings call this morn.For 9 mos, net revenues were up 6.7% to $24.6 mil and adjusted EBITDA loss narrowed by 90% to $714K.On call, Goyette described improving arc of co that has successfully navigated split with one-time distribution partner, never mentioned by name, with margins strengthening and co quickly filling out-of-stocks and reclaiming banners that were lost during transition. As initial energy partner for Pepsi in Canada, Montreal-based brand was eclipsed of course by PEP's subsequent alliance with Celsius, but Goyette has consistently argued that unwinding of Pepsi alliance has been a boon, returning co to direct connection with its retail partners as it rebuilt indie distribution network to 27 partners as of Jul. "Best of all, we now call all the shots," he declared of transition. Despite complexity of switch, supply chain team maintained fill rate of 99.5% and Quebec already has recovered all its lost ACV with English-speaking Canada closing gap. Tho pair of Guru trackers who participated in call sought to ferret out how much of elevated growth level may prove to be unsustainable, Goyette and his CFO Ingy Sarraf argued that the gains are for real as rebrand delivers, innovations are embraced and co continues to find ways to operate more efficiently.As for the prospect of continued profitability, Goyette has reminded investors that in the 15 yrs before Guru went public via SPAC deal in 2020 it had always operated profitably, meaning it wasn't such a stretch to return to the black when Wall Street sentiment shifted away from earlier growth-at-all-costs mentality. Still, with $24 mil in cash on the books, no debt and an untapped $10 mil in credit facilities, Guru won't hesitate to invest in the right opportunities, even at temporary hit to profitability, CEO reminded. "Profitability is now in reach every quarter unless we choose to invest," as he put it. One tempting investment target as fall approaches: college campus activations, where brand has strong base. Strikingly, tho, even as it scored record growth in Q3, Guru actually cut its SG&A by 9.4% and its sales & marketing by 15.7% as it continued to optimize its investments. Of the 10-pt improvement in gross margin, CEO and CFO attributed two-thirds to the exit from PEP distribution and one-third due to higher pricing and better-timed promo periods. Since Guru maintained margins in 62-67% range prior to Pepsi deal, there's no reason it can't maintain that level, Sarraf argued.That innovation continues to resonate, Goyette argued, as co proliferates flavors in once-tite lineup and rides zero-sugar wave - in Guru's case, using stevia as sweetener rather than the sucralose or aspartame that give other zero-sugar brands a better-for-you halo that consumers may eventually unmask. Among newcomers, Island Breeze Punch - which plays in vibe-y lifestyle segment pushed by Celsius lately - launched at retail in Quebec and online across North America. An 18-unit Zero variety pack is off to strong start in Costco's Canada stores. More broadly, co continues to rapidly build out zero-sugar assortment, tapping into fastest-growing energy segment.No mention of tariffs in earnings announcement or in prepped remarks on call, but of course one analyst asked about them. No question they're creating some cost pressure, Sarraf replied, but Guru has "contained it so far." A lifting of some reciprocal Canadian tariffs has helped on some ingredient costs.

No Pepsi? No Problem, as Guru Energy Scores Record Qtr & Returns to the Black Following Dissolution of Distrib Alliance in Canada; Smaller US Biz Scores 16% Lift

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