SunOpta Inc.

Third-quarter revenue was $205 million, up 17% year over year, entirely from volume growth. Gross profit rose to $25.5 million from $22.9 million, while gross margin fell to 12.4% from 13.0% and adjusted gross margin fell to 13.6% from 16.6%. Operating income was $6.9 million versus $0.8 million a year ago; earnings from continuing operations were $0.8 million versus a loss of $6.2 million; adjusted earnings from continuing operations were $6 million, or $0.05 per diluted share, versus $1.8 million, or $0.02 per diluted share; and adjusted EBITDA was $23.6 million, up 13% from $20.8 million. For 2025, the company now expects revenue of $812 million to $816 million, adjusted EBITDA of $90 million to $92 million, interest expense of $24 million to $26 million, capex of about $30 million to $35 million, free cash flow of $20 million to $22 million, and year-end leverage of 2.8x. For 2026, initial guidance calls for revenue of $865 million to $880 million and adjusted EBITDA of $102 million to $108 million, with leverage targeted at 2.8x by year-end and remaining under 3x through the year. The company also said the new $35 million capacity investment should increase network capacity by approximately 10% and come online in late 2026.

Brian Kocher framed the quarter as a case of strong demand and intentional long-term decision-making, saying the company chose to take volume when customers accelerated decisions rather than defer it. He emphasized that SunOpta is winning with marquee customers across growing categories and channels, and that the new business should benefit 2026, 2027 and beyond. At the same time, he was candid that he is disappointed in the short-term gross margin pressure, but said the company has a clear, time-bound plan to restore margin expansion by the second half of 2026 and remain confident in the long-term algorithm.

Greg Gaba highlighted the hard numbers behind the quarter: $205 million of revenue, $25.5 million of gross profit, 12.4% gross margin, $6.9 million of operating income, $0.8 million of earnings from continuing operations, $0.05 adjusted EPS, and $23.6 million of adjusted EBITDA. He said the margin decline was caused by incremental variable labor and infrastructure, maintenance, overtime, higher waste, and temporary volume limitations tied to wastewater issues at Midlothian, partially offset by higher production volumes. On the balance sheet, debt was $266 million and net leverage was 2.8x, with $34 million of operating cash flow in the first nine months and $23 million of investing cash outflow; he also said essentially all 2025 free cash flow will be used for mandatory debt and notes payable repayments.

Analysts focused on why margin pressure is showing up now, how much of the Q4 hit is temporary, and whether demand strength will translate into sustained top-line growth. Management said the Q4 pressure comes from four temporary issues: wastewater limitations at Midlothian, unplanned downtime and higher maintenance/labor costs from the volume surge, delayed margin-improvement work, and a one-week plant shutdown in October for infrastructure work. They also said the issues should unwind through the first half of 2026, with the second half of 2026 back on track, and stressed that the new volume is long-term in nature, supported by multi-year relationships and customer retention.