Barfresh Food Group (NASDAQ:BRFH) reported second-quarter 2026 revenue growth driven by its Arps Dairy acquisition, but the company lowered its full-year outlook after a slower-than-expected production ramp at its existing Ohio facility pressured margins and adjusted EBITDA.
Revenue for the quarter totaled $4.7 million, up 190% from $1.6 million in the prior-year period. Arps Dairy contributed $3.2 million in revenue, including $2.9 million in raw and processed milk sales. Revenue in the company’s Frozen Beverage and Food segment, which primarily includes legacy Barfresh products, increased 9% year over year.
Arps Facility Ramp Weighs on Results
Founder and CEO Riccardo Delle Coste said Barfresh is working to shift from reliance on third-party co-manufacturers toward controlling its own production through Arps Dairy and a larger facility under construction in Defiance, Ohio.
However, the existing Arps Dairy facility required more repairs and infrastructure work than the company anticipated after Barfresh began producing its own products at higher volumes. Delle Coste said the age and condition of the facility’s equipment became clearer as the company increased production and attempted to operate both its Barfresh product lines and ice cream operations.
“The ramp at our existing Arps Dairy facility took longer than we had modeled,” Delle Coste said. “The extra cost that came with that slower ramp pulled down both our gross margin and adjusted EBITDA more than we planned for when we gave guidance back in May.”
The company moved ice cream production out of the facility to focus capacity and improvement efforts on Barfresh products. Delle Coste said the company expects to resume the ice cream business after production is stabilized and it is consistently achieving expected volumes and efficiencies.
During the question-and-answer session, Delle Coste said Barfresh fulfilled all school contracts for its Twist & Go product and has been building inventory during the summer. He said production throughput has improved as the company repairs, services or replaces components at the existing plant.
CFO Lisa Roger said the lower gross margin reflected startup and implementation costs as well as lower-than-expected productivity at the processing facility. General and administrative expenses rose to $794,000 from $673,000, largely due to personnel, recruiting and administrative expenses associated with Arps Dairy.
Company Reduces 2026 Outlook
Based on first-half results and the slower production-efficiency ramp, Barfresh revised its fiscal 2026 guidance. The company now expects revenue of $23 million to $26 million, representing growth of 62% to 83% compared with fiscal 2025.
Barfresh forecast adjusted EBITDA of negative $1 million to negative $2 million for the full year and expects adjusted EBITDA of negative $500,000 to breakeven during the second half.
Roger identified several factors affecting the EBITDA outlook:
- About $1.8 million of higher processing spending at Arps Dairy.
- Approximately $800,000 related to the loss of ice cream mix business resulting from equipment and infrastructure constraints.
- Approximately $800,000 in material-cost increases.
- About $600,000 from delayed revenue recovery in legacy Barfresh product lines.
- Another $600,000 from synergies that have not yet been realized, primarily involving inbound freight, storage freight and cold-storage costs.
Management said it expects revenue to improve sequentially in the third and fourth quarters as new school district customers begin the 2026-2027 school year and existing-facility efficiency continues to improve. Roger said the raw and processed milk business is expected to remain relatively stable, while projected growth is expected to come from Barfresh products.
Defiance Facility Remains Operational Priority
Barfresh is completing construction and equipment installation at a 44,000-square-foot facility in Defiance, Ohio. The company is targeting partial commissioning of core products by the end of 2026, with the balance of products expected shortly afterward.
The company has been approved for a $2.4 million grant for specialized equipment that must be used in 2026. It also secured $7.5 million in senior convertible note financing in March, using proceeds to pay off the mortgage on the Defiance property and other obligations. Delle Coste said the company now owns the property and building free and clear.
Still, he said project costs have risen beyond initial expectations and financing plans remain under review. Barfresh continues to plan for a new mortgage and additional equipment financing to complete the project, though Delle Coste said the company may need to adjust its approach to make the economics work.
As of June 30, Barfresh had about $1.4 million in cash and accounts receivable and approximately $2.2 million of inventory.
Delle Coste said the education channel remains the company’s primary near-term commercial opportunity. Several recent school wins began using products during the 2025-2026 school year and are expected to expand across all locations in 2026-2027. He said Barfresh expects additional education-channel customer wins as school bids are completed ahead of the new academic year.
“Right now, we remain focused on serving our core education customers reliably,” Delle Coste said, adding that the company expects the new production platform to improve capacity, efficiency and profitability once operational.
About Barfresh Food Group (NASDAQ:BRFH)
Barfresh Food Group, Inc develops, manufactures and distributes a line of fresh-frozen, portion-controlled beverage and breakfast products for the foodservice and retail channels. The company’s flagship offerings include smoothie base blends, pancake and waffle mixes, and related griddle products designed to deliver convenience, consistency and controlled portions. Barfresh products require only the addition of liquid and blending or mixing prior to service, catering to operators seeking quick-serve solutions without sacrificing quality.
Operating from a single, fully certified manufacturing facility in Miami, Florida, Barfresh adheres to strict quality and safety protocols throughout its production processes.
