Thank you, operator. Bonjour à tous.

Good morning, everyone, and welcome to Guru's fiscal 2026 second quarter results conference call. Joining me this morning is our CFO, Ingy Sarraf.

Let's turn to slide 5. Since establishing our direct distribution model in Canada, we have invested in how we show up at shelf, how we price, and how we build the brand.

That took time. Q2 is where that time has paid off.

Net revenue grew 31.6%. Canada sales grew 46.8%.

Gross margin expanded by nearly 4 percentage points. On a trailing 12-month basis, we achieved approximately 30% revenue growth with positive adjusted EBITDA of $1.2 million.

This is the second consecutive trailing 12-month period since Guru went public where we achieved positive adjusted EBITDA. This is what structural improvement looks like.

What you are seeing is real and repeatable: better pricing control, better trade investment, better retail execution, and a product lineup that consistently converts consumer demand for good energy into market share. Turning to slide 6.

Canada is the clearest example of the benefit of controlling your own distribution in this business. Our revenue grew because we improved both our shelf presence and our margin at the same time.

We did not have to trade one for the other. The whole market is healthy, and the zero-sugar platform is the engine driving its growth.

Subsequent to quarter end, May Canadian retail shipments more than tripled year-over-year. The Sorbet lineup specifically is outperforming our expectations across every channel.

Guru Zero Dragon Fruit Cherry Sorbet, launched in January and activated in the market during Q2, is now a top five SKU on guruenergydrink.com. The strength of our digital execution also showed up on Amazon.

During the Amazon Spring Sale, Guru was the number one best seller in the energy drink category on Amazon Canada. We continue to hold the number three energy drink brand in the category.

In late May, we also activated a first-of-its-kind 18-pack Sorbet variety format with a leading Canadian wholesale club partner. It's the first time that Guru has had this kind of large-format, limited-time offer at a club retailer.

The early sales read is strong. Turning to slide 7.

US revenue was essentially flat in Q2 as distributor inventory levels continue to normalize. However, consumers are telling us a different story.

Scan sales in the natural channel were up approximately 15% over the last 12 weeks. We are growing roughly 1.7 times faster than the category.

The brand is performing well at the consumer level. Subsequent to quarter end, May US retail shipments were four times the level recorded in May of last year.

Guru set a new all-time revenue record on Amazon USA in May 2026. June US retail is already tracking two times higher than last year.

In Q3, we are expanding US distribution through a partnership with Sprouts Farmers Market. Sprouts operates more than 480 stores across 25 states.

Guru will be available nationwide beginning June 22nd. Sprouts is exactly the retail partner that fits our strategy: a highly engaged, health-conscious shopper base that is already looking for what Guru offers.

Once we earn our space there, we have a clear path to the premium conventional grocery channel in priority urban markets. Turning to slide 8.

The zero-sugar platform is the asset that keeps showing up in everything we report: six SKUs in just over two years, all organic, zero sugar, no sucralose, no aspartame. There's nothing else in the category that combines these four attributes at scale.

Guru Zero Orange Raspberry Sorbet, launched in Q2, is performing ahead of internal expectations. In July, we will launch another Guru Zero Sorbet in Quebec and online across North America.

Innovation will keep driving growth in Canada and building momentum in the US. I also want to address Quebec's proposed legislation to restrict energy drink sales to those 16 and older.

We support it. That position isn't new.

I testified publicly on this issue in 2019 and again in December 2025, and signed the coalition petition well before the current legislative momentum. Guru has never marketed to minors.

Our brand, our formula, and our entire commercial strategy are built for adults. In fact, our entire zero-sugar line already carries 18+ adults-only labeling on every can.

This is who we sell to. Energy drinks should not be marketed to kids and should not be mixed with other powerful stimulants like ADHD drugs or alcohol.

We do not expect this legislation to have meaningful impact on our business. Frankly, we're proud of our responsible marketing, our consistent public stance, and our mission to clean up the energy drink industry.

I will now turn the call over to Ingy for a deeper look at our financial performance.

Thank you, Carl, and good morning, everyone. Let's turn to slide 10.

I want to walk you through the four things that explain Q2. Not just what the numbers are, but also how they came together.

First, the revenue story. Net revenue grew 31.6% to $8.5 million, our highest second quarter ever.

Canada was the engine, up 46.8%. Growth was driven by continued momentum in the zero-sugar innovation line, strengthened retail execution under the direct distribution model, and seasonal demand acceleration entering spring.

In the US, reported revenue was down 3% in Canadian dollars, but in US dollar terms, we were essentially flat at +0.6%. The reported decline was entirely a function of the stronger Canadian dollar, not the underlying business performance.

Second, the gross margin story. Margin expanded 390 basis points to 63.6%.

This was achieved despite meaningful pressures, including tariffs and broader geopolitical factors. Despite these headwinds, we expanded our margin by nearly 400 basis points.

That is the direct distribution model working: better pricing control, more efficient trade investment, and improved promotional discipline. We believe that our gross margin is in a better place now that it is under the all-distribution model, and we expect that to hold.

Third, the SG&A story. Although SG&A grew 20.3% in absolute dollars, it improved as a percentage of revenue from 84.8% to 77.6%.

In other words, revenue grew faster than the cost base needed to support it. This is what we mean by operating leverage.

The absolute increase reflects three specific investment decisions taken during the quarter. First, planned marketing behind the Guru Zero Orange Raspberry Sorbet launch.

Second, consumer research and strategic planning investments to support our US expansion priorities. Third, unusual professional fees related to the matters described under recent developments in our MD&A.

We expect those fees to normalize once these matters are resolved. On the Pepsi matter, the litigation is progressing as expected.

The details are fully disclosed in our MD&A and notes 15 and 16 of the financial statements. We do not view it as material to our long-term strategy, and we will not comment further on an active legal matter.

Fourth, the trailing 12-month picture. This is the one I want you to focus on.

The quarter itself shows an adjusted EBITDA loss of $0.8 million. The trailing 12-month picture tells the structural story.

Over the last 12 months, we have achieved approximately 30% revenue growth and generated $1.2 million of positive adjusted EBITDA. This is now the second consecutive 12-month period since Guru went public where we have combined these two things.

Quarterly results will continue to reflect seasonal patterns and the timing of marketing investment. What the trailing 12-month period shows is that the underlying engine is working.

Turning to the balance sheet. We ended the quarter with $24.3 million in cash and short-term investments, no long-term debt, and a $10 million undrawn credit facility.

Total available liquidity is $34.3 million. That gives us the flexibility to continue investing in growth.

Back to you, Carl.

Thank you, Ingy. Let's turn to slide 12.

I would like to conclude with work-- what we are focusing on for the remainder of fiscal 2026. We are entering the second half of the year in a strong position.

Our gross margin is structurally improved. We have an operating model that has proven it can grow without costs growing at the same pace.

We also have the most differentiated clean-label zero-sugar portfolio in the category, which is about to grow to seven products with a launch in July. On the US side, we just announced a meaningful distribution expansion.

We will continue to invest selectively in brand and innovation, and we will continue to do this with the same financial discipline that has now produced two consecutive 12-- trailing 12 months of positive adjusted EBITDA. Over the past year, we have asked investors to trust that the work that we were doing would sho-- would show in the numbers.

Today, it has. May and June shipments accelerated across both Canada and the US, with May US retail shipments four times those of May 2025 and a new-- and a new all-time revenue record on Amazon USA.

We are entering the peak selling sea-- selling season in-- in a strong position, and we intend to make the most out of it. Merci.

Thank you. Operator, we'll now open the call to questions.

Thank you. A couple questions.

I want to start with questions about cost and implications for margins. Pretty impressive improvement in gross margin.

What should we expect to see in terms of improvement given what we're hearing aluminum costs, other input costs, and what can you say about pricing action that can offset some of those costs?

Hi, Sean. From a pricing action standpoint, we did not take any price increase in the last year in Canada.

That was a conscious decision that we made as we rebuilt the distribution model. Considering our gross margin at over 63%, we are in a solid position.

We remain industry-leading, and I believe that we're in a strong position. It's all due not to pricing, but rather to trade investment efficiencies.

Of course, we are seeing, like you mentioned, like everyone, some cost headwinds. The way we will go about this, of course, is looking at the complete value chain, making sure that it works for everybody in the chain, not just us, but the retailer and the consumer as well.

We will always focus on that, and we take this to heart in our decisions.

Okay. Thank you.

Does that answer your question?

Yes. I guess where I was going with it is should we expect to see further improvement or might some of these headwinds eat away at the improvement that you've made?

I think we're going to continue to see a strong gross margin. That's something that we're really proud of and that we'll continue to work on.

Of course, we're feeling these headwinds, we're always making sure through our various suppliers, through our trade investment strategies to kind of make sure it balances out. We're kind of reconsidering that on a quarterly basis.

We review that and make sure that it works. I can't, of course, make any promises for the future, but our history and our discipline so far has really helped us and it will continue to do so.

Okay. Thanks.

Carl, maybe for you. Limited-time offers are kind of a big part of what the other energy drink companies try and other categories as well.

Is this a big part of your strategy? How much does LTO kind of stuff contribute to your growth?

Yes, it's an interesting question considering how competitive this industry has become and how much innovations play a role. I would say that our focus over the last few years, especially over the last two years has really been on permanent innovations, and we've been very quickly successful at this.

The first focus is really around completing our zero portfolio. The zero-sugar is driving the growth and we still have some room for some permanent innovations that are driving permanent velocities day in, day out.

That's really the core of the focus. LTOs, I really believe, can play a role.

Not as good as a role as a permanent SKU, but I think they can play a role. What we've seen, we've started testing a little bit with LTOs in the multi-pack space, and I think this is where when you launch an LTO, if you're getting incremental space in a retailer, for example, if you end up in the perimeter instead of the energy drink section, if this creates an opportunity for incremental promotional activity, then I think it's really worth looking at.

I spoke about the Costco pack in my remarks as well, this is something that's driving a lot of growth for us. We do have a limited-edition pack for the summer in Costco right now in Quebec, and it's performing well, so that's exciting.

It's also in the multi-pack, right? Four-packs, multi-packs is something that we are really interested in because it drives incremental sales.

We want to solidify our permanent zero portfolio first, and then obviously we'll look at bringing some LTOs, but that's more to create excitement from a consumer point of view and it gives you a great plug value from a marketing perspective.

Okay. Great.

My last question for now is about Sprouts. It's obviously a perfect fit for the brand.

First question: how are you going to be merchandised in the stores? Is it cold or warm or both?

Second, do you kind of put Sprouts in context of what portion of the energy drink market might they account for, and who else is there already? Are you displacing somebody, or are you sitting next to another brand?

A little bit about that, if you can.

We're obviously very excited about this news. This is a really important retailer, and they obviously saw our performance.

They saw our performance and our velocities increasing in the natural channel, and this was a big gap in our natural channel strategy. It is significant from the natural point of view.

It's going to increase our distribution. When we look at our total weighted distribution, our ACV in the natural channel, it's going to give us a significant bump, something around 10% bump in the distribution.

It is significant in terms of gain with 480 stores. It will become fairly rapidly one of our top retailers in the US.

From an importance point of view, it is significant, and we're very excited about it. We have built a very aggressive launch plan to make sure we support and we win with them.

Obviously, I can't disclose all the specifics because usually your competitors are listening on this call, but I can tell you that it's activating multiple touch points, in-store activation, digital support. We intend to make this an outstanding success for us, but also for Sprouts by growing their category, bringing new consumers into their stores who are looking for a natural offer, but that has a conventional taste.

That's kind of the long answer on the context. To your question, we'll have multiple placements in the stores, right, cold and warm.

That's also really exciting. We will be aggressive on promotions and demos in the beginning.

I think there was another question. Was there another question?

Yes. Are they expanding their presence in energy or are they swapping someone else out for you?

Are you replacing somebody? Who shares--

I don't know the specifics of that. I haven't seen the final planogram because this is being implemented now.

My understanding is that they're not increasing the energy drink category, but replacing some other lower-performing brands. That's my understanding, but I could be wrong on that, right?

So

Thank you very much.

Thank you.

Hi. Good morning, Carl and Ingy.

Bonjour, Martin.

Hi.

Great performance in Canada. Your sales were up 47% year-over-year.

Was wondering what proportion of that was sell-in versus sell-through. Can you give us your estimate of scan data at retail in both tracked and untracked channel during the quarter?

Yes. It's 15%, Martin.

It's coincidence, but the growth in scan in Canada and the US has been at the same level in the US and in Canada. It's 15% in Canada.

That's obviously considering tracked and untracked, and untracked is driving most of that growth, right? It's really coming in these channels.

Exactly like the same last quarter.

Okay. Is it fair to say that there's a little bit of channel fill that happened during the quarter?

There's a distribution model change, if you remember, right? There was also weaker months last week, we're comparing to lower comps.

Spring season is the season where we are the most active with our retailers building summer displays. I wouldn't call it summer channel fill.

I would call it heavy promotional activity in order to get ready for the summer.

Okay. Then your comments on subsequent to quarter, you're saying that in May your Canadian shipments more than tripled on a year-over-year basis.

I just want to understand that clearly. Triple is a big number.

Are we comping very weak May last year? Can you just give a little bit more color around that cuz yeah, just trying to understand what that means exactly.

Yes. It's on a lower comp, but it's still a strong month, right?

We were on the tail end of our previous distribution partnership. We were just starting our new distribution model last year in May.

Yes, you're comping on the lower May, but May was also a very strong month.

Okay. We should expect June and July shipments to revert back to normal levels, right?

We should expect to continue to see growth, but not necessarily in the same four times as you saw in or two two times, three times the numbers that you saw that we quoted in our remarks. Yes.

We should normalize growth. Yes.

Yeah. Just you said your scan retail sales were up 15% year-over-year during the quarter.

How does that compare to the industry?

It's a little bit faster than the industry. I'd say twice as fast.

Twice as fast as the industry.

The industry is growing in the 7%, 8% in the last time I checked, right?

Okay. Wanted to touch a little bit on Sprouts, your new listing there.

You've obviously been looking at Sprouts and have that retailer on your radar for several years. Can you give us a little bit of color as what triggered the listing to happen now?

Yes. There's a great job from our sales team.

I want to congratulate them. The sales team did a great job in building relationship with them and making Sprouts realize that there was a gap in their portfolio.

It was also, honestly, even the greatest sales team, if you don't have the supporting numbers to support why a retailer should carry your brand, then it's not going to work. They're seeing the same numbers that we're disclosing.

They're seeing increased velocities in all of the natural retailers we are partnering with. They are seeing a brand that's actually growing their category.

They're seeing a brand that can perform not only with the natural consumer, but that offers natural ingredients with a mainstream taste. For them, it's really an opportunity to grow their energy drink category.

It's also an opportunity for them to bring new consumers in, which is critical, right? All natural retailers want to bring more of the conventional energy drink consumers because it's such a big category outside of the natural stores that Guru offers them a tool to bring artificial energy drink consumers into natural stores and sell them a better product.

Okay. You mentioned that you're going to have a pretty active promotional campaign around the launch.

Do you expect this to be margin-dilutive in the near term?

Ingy worked the business case, maybe, Ingy, you want to speak about that?

Yeah. Of course, for the initial launch, there's a lot of investments, like you pointed out.

Beyond that, however, it will be margin accretive. We expect it to be profitable.

We do do business cases for all of them, there's always an initial period, which we're all conscious of and it's to make sure the brand is known. Then after that, it must be positive for us to continue, and it is.

Okay. Just to be clear, how long is the initial investment?

Are we talking about Q3, or could it spill into Q4?

Yes, it could spill into Q4.

Okay. Q3 and Q4.

Okay. That's it for me.

Best of luck.

Merci, Martin.

Thank you.

Thank you. Appreciate it.

Just wanted to kind of clarify something Martin was just referring to. Are you seeing anything in the May numbers that might be triggered by Prime Day being a little earlier?

Or is that still too far out to matter for May? Are your shipments in May affected by Prime Day being moved up 2.5 weeks or something this year?

Ingy, you want to take that?

Sorry, I didn't understand the question. Prime what?

The question was if the sales in May were impacted by Prime Day being a little bit earlier this year.

Oh, not yet. That's going to be in June.

Prime Day is going to be in June, right?

Yeah. There's no impact.

No,

there's no impact, Sean.

Oh, no, no. There's no impact.

No, no. It will be in June.

We hope it's going to have a big impact on June, though, but not in May.

Yeah. Exactly.

Not in May, no.

Okay. All right.

Thank you.

Thank you.

Thank you, operator, and thanks, everyone, for joining and choosing good energy. Have a great day.