Local Bounti Corporation Q3 FY2025 earnings call

• Craig Hurlbert highlighted the market shift in controlled environment agriculture (CEA), with retailers now having active strategic discussions about long-term supply partnerships instead of exploratory ones.
• Kathleen Valiasek detailed Q3 results: 19% YoY revenue growth, improved adjusted EBITDA loss YoY, and completed critical facility upgrades. Texas automated harvesting system operational, doubling productive output; Georgia Tower upgrades driving yield improvements. Labor productivity in Texas increased ~19% and direct labor cost per pound reduced ~17% from July to October. Tower upgrades in Texas and Washington completed, with expected yield increases >10% post optimization. Patent application related to optimizing growing process with computer vision and AI advancing. Seed cost reduction program ongoing in Texas and Washington. Commercially, new Chief Commercial Officer Dane Almassy leading efforts, including Walmart expansion with launch of 10-ounce Romano Caesar family-sized salad kit in Pacific Northwest Walmart stores, distribution expansions of salad kits in Pacific Northwest, home delivery channel launches of 4 new Grab-and-Go offerings, and private label partnership with Markon Cooperative for Living Butter Lettuce.

Third quarter revenue increased 19% to $12.2 million, driven by increased production from Georgia, Texas, and Washington facilities. Adjusted gross margin percentage was approximately 29% excluding certain items. No specific product segment breakdown provided.

• Expect improved adjusted EBITDA performance in Q4 with Texas at full capacity and cost initiatives reaching full run rate.
• Aim to achieve positive adjusted EBITDA in early 2026, driven by revenue growth and product mix optimization, operational efficiency from tower upgrades and seed cost reduction, and cost discipline from annualized cost reductions.
• New value-added product launches ramping through late Q4 and 2026 to improve unit economics.