SunOpta Inc.

SunOpta reported third-quarter revenue of $205 million, up 17% year over year, entirely driven by volume. Gross profit increased to $25.5 million from $22.9 million, while gross margin declined to 12.4% from 13.0% and adjusted gross margin declined to 13.6% from 16.6% a year ago. Operating income rose to $6.9 million from $0.8 million; earnings from continuing operations were $0.8 million versus a loss of $6.2 million; adjusted EPS was $0.05 versus $0.02; and adjusted EBITDA was $23.6 million, up 13% from $20.8 million. For full-year 2025, the company now expects revenue of $812 million-$816 million, adjusted EBITDA of $90 million-$92 million, interest expense of $24 million-$26 million, capital expenditures of about $30 million-$35 million, free cash flow of $20 million-$22 million, and year-end leverage of 2.8x. For 2026, management introduced revenue guidance of $865 million-$880 million and adjusted EBITDA of $102 million-$108 million, with leverage targeted at 2.8x by year-end.

Brian Kocher framed the quarter as another period of strong commercial momentum, saying categories are “roaring” and customers are “voting” for SunOpta with their business. He stressed that the company chose to accelerate customer volume because it believes the business is long-term accretive, even though that created short-term inefficiencies and delayed margin work. His tone was confident but candid: he said he is disappointed in the near-term margin flow-through, yet he believes the issues are time-bound and that SunOpta can get back to its margin-expansion path by mid-2026 and outperform in 2027 and beyond.

Greg Gaba highlighted the quarter’s hard numbers: revenue of $205 million, gross profit of $25.5 million, gross margin of 12.4%, adjusted EBITDA of $23.6 million, and adjusted EPS of $0.05. He pointed to specific headwinds behind the margin compression, including incremental labor and infrastructure spending, maintenance expense, overtime, higher waste, and temporary limitations tied to wastewater issues at Midlothian. He also outlined balance-sheet and cash details: debt of $266 million, net leverage of 2.8x, operating cash flow of $34 million in the first nine months, and updated 2025 free cash flow of $20 million-$22 million, with essentially all of that allocated to mandatory debt and notes payable repayments.

Analysts focused on why higher demand was not translating into better short-term margins and whether the Q4 and 2026 pressure was temporary or recurring. Management said the Q4 drag is caused by a mix of wastewater limitations, maintenance recovery spending, extra labor and overtime, delayed margin projects, and a one-week October shutdown for infrastructure work; Greg Gaba clarified these issues should ease through Q1 and Q2 2026 and be largely resolved by the end of Q2. Questions also probed whether SunOpta could charge more for constrained capacity and whether the new volume was durable; Brian Kocher said the company has taken price where possible, can rationalize lower-return relationships, and took this business because it sees multi-year benefits into 2026-2028, with many customers on multi-year agreements.