Growth, Decline

Revenue increased 92% y/y to $5.6 million, exceeding guidance of $5.0–$5.2 million, driven by stronger Arps milk contribution. However, gross margin declined to 18% from 31% y/y due to lower‑margin milk mix and facility startup costs. The company’s manufacturing transition remains a key near‑term drag on margins, but the bridge to recovery is becoming clearer. As throughput improves, new equipment is installed, and school‑year volume shifts toward core Barfresh products, consolidated gross margin should begin recovering from the 1Q26 trough.