OATLY GROUP AB (NASDAQ:OTLY) reported financial results for the fourth quarter and full year of 2025, delivering a mixed performance that has elicited a positive initial market reaction. The oat drink company surpassed revenue expectations but reported a wider-than-anticipated loss per share, while simultaneously announcing its first full year of profitability and providing a measured outlook for the year ahead.
Earnings and Revenue Versus Estimates
The company's top-line performance for the quarter exceeded analyst forecasts, while profitability on a per-share basis fell short of consensus.
- Revenue: Oatly reported Q4 2025 revenue of $233.8 million, which came in above the analyst estimate of approximately $220.4 million. This represents a 9.1% increase over the prior year period.
- Earnings Per Share (Non-GAAP): The company reported a net loss attributable to shareholders of $19.1 million, or a loss per share of $0.61. This was slightly wider than the estimated loss of $0.59 per share.
For the full year 2025, Oatly achieved a significant milestone by reporting its first full year of positive Adjusted EBITDA, which CEO Jean-Christophe Flatin described as the result of "disciplined, strategic actions" taken over the past three years to strengthen the business foundation.
Market Reaction and Price Action
Following the earnings release, Oatly's shares traded higher in pre-market activity, indicating investor approval of the overall report. The positive price action, with a pre-market gain of over 5%, suggests the market is focusing on the revenue beat, improved profitability metrics, and the company's forward guidance rather than the slight miss on the bottom-line EPS figure. This reaction underscores a shift in investor sentiment, rewarding the demonstrated path to profitability and cash flow improvement after a period of significant restructuring.
Key Highlights from the Quarter
The fourth quarter results highlighted a story of geographic divergence and continued operational improvement:
- Strong Performance in Europe & International: This segment was the primary growth driver, with revenue surging 23.3% to $133.7 million, fueled by volume growth in Barista products.
- Challenges in North America: Revenue declined 8.8% to $64.4 million, primarily due to reduced sales to a large foodservice customer, though the segment improved its product and channel mix.
- Margins Expand Significantly: Gross profit margin expanded by 579 basis points to 34.5%, driven by supply chain efficiencies and improved product mix across all regions.
- Improved Cash Flow: Net cash used in operating activities improved dramatically to $23.7 million for the full year, down from $114.4 million in 2024. Free cash flow also showed substantial improvement.
Forward Outlook and Analyst Comparisons
Management provided its financial outlook for 2026, which offers a basis for comparison against existing analyst estimates.
- Revenue Guidance: Oatly expects constant currency revenue growth of +3% to +5% for 2026. This includes an expected headwind from the aforementioned large foodservice customer in North America. This projected growth rate appears modest when set against the current analyst consensus, which estimates sales of approximately $902.4 million for the full year 2026—a figure that would imply a growth rate significantly higher than the guided range.
- Profitability Guidance: The company forecasts Adjusted EBITDA between $25 million and $35 million for 2026, building upon the profitability achieved in 2025.
The provided guidance, particularly on revenue, is conservative and may temper expectations for rapid top-line expansion, instead emphasizing continued profitable growth and cash generation.
Strategic Considerations
The earnings report also noted that the strategic review of the Greater China business is ongoing, with an expectation to complete the process within 2026. This introduces a potential catalyst for the stock later in the year, though the company cautioned that there is no assurance the review will result in any transaction.
For a detailed breakdown of past performance and future estimates, you can review more earnings data and analyst projections for Oatly Group AB (NASDAQ:OTLY).
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
