Key Takeaways
- Local Bounti reported a 38% year-over-year increase in Q1 2025 sales, reaching $11.6 million.
- The company forecasts reaching positive adjusted EBITDA in Q3 2025, supported by operational efficiencies and retail expansion.
- Significant yield improvements are expected at Georgia, Texas, and Washington facilities in H2 2025.
- Local Bounti continues distribution expansion with major retailers including Walmart, HEB, and Brookshire’s.
- A recent debt restructuring resulted in $197 million of debt and interest cancellation, with long-term financial implications outlined under U.S. GAAP.
Local Bounti Q1 2025 Financial Results and Strategic Update
Local Bounti Corporation (Profile), a U.S.-based indoor agriculture company, released its financial results for the quarter ending March 31, 2025. Sales rose to $11.6 million, a 38% increase compared to $8.4 million in the prior year period. The growth was attributed to increased output at the Georgia facility and expanded sales from newer operations in Texas and Washington.
Kathleen Valiasek, President, CEO, and CFO of Local Bounti, said the company’s commercial and operational progress in Q1 2025 sets the stage for a potential shift to positive adjusted EBITDA in Q3. “The dedication from our entire organization—where everyone from operations to sales to finance is aligned around reaching positive adjusted EBITDA—has been truly remarkable,” she stated.
Local Bounti Sees Margin Improvement Amid Cost Optimization
Gross Margin and Expense Management
Adjusted gross margin reached approximately 29%, up from 24% in the prior year, excluding depreciation and stock-based compensation. Adjusted general and administrative expenses totaled $5.8 million, up from $4.3 million. The company reported steps to reduce annualized G&A and COGS by approximately $7 million during Q1 and into Q2 2025.
Net loss for the quarter was $37.7 million, compared to $24.1 million in the same period last year, largely due to increased interest expenses. Adjusted EBITDA loss stood at $8.8 million, compared to $6.9 million in Q1 2024 and $9.3 million in Q4 2024.
Facility Reconfiguration and Expansion Plans
Texas, Washington, and Georgia Updates
Local Bounti continues to adjust operations at its Texas facility by converting three acres to a flexible production model for both head lettuce and cut products. Commercial production in this section is expected to begin in Q2, with permanent harvesting equipment installation scheduled for early Q3.
At the same time, the company reports meaningful yield improvements in its Georgia facility and expects similar results from its Washington and Texas locations in the second half of the year. Planned expansions, including potential growth into the Midwest, remain under evaluation pending ongoing retailer discussions.
Local Bounti Expands Retail Presence and Product Offerings
Distribution and Product Development Highlights
During Q1 2025, Local Bounti expanded its Texas-grown arugula line with Brookshire’s (80 stores) and launched Organic Living Butter Lettuce to HEB in California. New basil programs also began with regional retailers in the Pacific Northwest.
The company is increasing its distribution through Walmart, adding 13 distribution centers for its Conventional Living Butter Lettuce. Local Bounti also advanced its salad kit offerings with new flavors and formats, including a family-sized Caesar kit set to launch with a multinational retailer in Q3.
Capital Restructuring and Cash Position
Financial Agreements and Share Structure
As of March 31, 2025, Local Bounti reported $28.4 million in cash, cash equivalents, and restricted cash. A $25 million equity investment was secured in March from new and existing investors, alongside a $2.5 million capex financing term sheet.
Debt restructuring in March reduced principal and accrued interest by approximately $197 million. Under U.S. GAAP, the original $480 million debt remains on the balance sheet with a $168 million premium to be amortized over a 10-year term. This structure will significantly lower quarterly reported interest expense starting in 2025.
As of March 31, 2025, the fully diluted share count was approximately 28.3 million. On a pro forma basis, adjusted to include 10.7 million preferred shares, the share count stood at 21.4 million.
Outlook for Second Quarter and H2 2025
Local Bounti projects Q2 2025 sales between $12.0 million and $12.5 million. The company expects stronger sales in the second half of 2025, supported by operational improvements, new product introductions, and expanded customer relationships.
The company maintains its guidance of achieving positive adjusted EBITDA in Q3 2025, driven by sales growth and ongoing cost reduction measures.
Read the complete financial results here.
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