Earnings Call Highlights: Turning Point Brands (TPB) Q4 2025
Management Commentary
• Graham Purdy, CEO, said the company closed the year with strong momentum heading into 2026. “Revenue increased 29% to $121 million in the fourth quarter, including $41.3 million in Modern Oral net revenue. Adjusted EBITDA rose 14% to $30 million for the quarter,” he noted. The company also introduced 2026 Modern Oral guidance, projecting gross revenue of $220 million to $240 million and net revenue of $180 million to $190 million.
• Purdy emphasized that the company is increasing investments to accelerate growth in its white pouch portfolio. Plans include reallocating sales and marketing resources, expanding the sales force, strengthening online presence, increasing chain-account investments, growing international distribution, and building U.S. manufacturing capacity. “We will continue refining our route-to-market strategy to prioritize FRE and ALP while maintaining strong cash flow from our heritage brands,” he said.
• Chief Revenue Officer Summer Frein highlighted continued progress in the company’s go-to-market strategy. “We remain focused on expanding distribution, improving merchandising, and maintaining strong inventory positions,” she said. “We finished 2025 with solid momentum in large national chains and expect further progress throughout 2026.”
• CFO Andrew Flynn added that fourth-quarter sales growth was driven primarily by the Modern Oral category. “Revenue rose 29% year-over-year to $121 million, led by strong Modern Oral performance as we continue investing in sales and marketing to support expansion,” he said.
Outlook
• Turning Point Brands introduced 2026 Modern Oral gross sales guidance of $220 million to $240 million, with net sales expected between $180 million and $190 million.
• First-quarter 2026 consolidated adjusted EBITDA is expected to range from $24 million to $27 million, reflecting increased marketing and sales spending tied to white pouch launches.
• Purdy added, “We are working on several major sales and marketing initiatives around white pouch, which makes it difficult to project EBITDA beyond the first quarter at this stage.”
Financial Results
• Fourth-quarter consolidated revenue totaled $121 million, supported by strong Modern Oral growth, including $41.3 million in net revenue from the category.
• Adjusted EBITDA reached $30 million, up 14% year-over-year, representing a 24.8% margin.
• Gross margin for the quarter was 55.9%, essentially flat compared with the prior year.
• The Stoker’s segment delivered $81 million in net revenue, up 70% year-over-year, with legacy brands growing 9% and Modern Oral surging 266%.
• The Zig-Zag segment recorded $40 million in revenue, down 13%, as the company continued prioritizing Modern Oral growth.
• White pouch products represented 34% of consolidated net sales, up from 12% a year earlier.
• Turning Point Brands ended the quarter with $222.8 million in cash and generated $19.2 million in free cash flow.
