Annual report [Section 13 and 15(d), not S-K Item 405]

Revenue

v3.25.1
Revenue
 12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

Note 2 – Revenue

 

The Company records revenue net of discounts, which primarily consist of trade promotions, certain customer allowances and early pay discounts.

 

The Company excludes sales taxes collected from revenues. Retail-partner based customers are not subject to sales tax.

 

The Company’s DTC loyalty program enables customers to accumulate points based on their spending. A portion of revenue is deferred at the time of sale when points are earned and recognized when the loyalty points are redeemed. The Company closed its DTC channel effective June 1, 2024 and expired the loyalty program as of June 30, 2024. Deferred revenue related to the loyalty program as of the closing of the DTC channel was immaterial. Net sales for the period ended June 1, 2024 was $2.0 million.

 

Revenue channels

 

The Company groups its revenue channels into three categories: Digital, which includes the sale of product to online retailers such as Amazon and Chewy, as well as DTC sales, which included the sale of product through the Company’s website through June 1, 2024; Brick & Mortar, which primarily includes the sale of product to Pet Specialty retailers, independent pet stores, and regional distributors; and International, which includes the sale of product to foreign distribution partners and to select international retailers (transacted in U.S. dollars).

 

Information about the Company’s net sales by revenue channel is as follows (in thousands):

  

    Year Ended December 31,  
    2024     2023  
Digital (1)   $ 16,482       47 %   $ 19,002       49 %
International (2)   $ 16,210       46 %   $ 13,720       36 %
Brick & Mortar (3)   $ 2,283       7 %   $ 5,870       15 %
Net Sales   $ 34,975       100 %   $ 38,592       100 %

 

(1) The Company’s Digital channel includes two wholesale customers that amounted to greater than 10% of the Company’s total net sales for the years ended December 31, 2024 and 2023, respectively. Additionally, DTC sales within the Digital channel amounted to greater than 10% of the Company’s total net sales for the year ended December 31, 2023. DTC sales within the Digital channel were approximately $5.6 million for the year ended December 31, 2023. As of June 1, 2024, the Company has exited its DTC channel in an effort to improve profitability. The Company historically reported the sales in this channel as E-commerce and DTC separately and has been consolidated into one revenue stream as of December 31, 2024.
   
(2) One of the Company’s International customers amounted to greater than 10% of the Company’s total net sales and represented $12.8 million and $11.0 million of net sales for the years ended December 31, 2024 and 2023, respectively.
   
(3) None of the Company’s Brick & Mortar customers represented greater than 10% of net sales for the years ended December 31, 2024 and 2023. For the year ended December 31, 2023, Petco was included within the Brick & Mortar channel. Beginning in Q1 2024, Petco is presented within Digital as a result of the strategic exit out of Petco stores, while remaining on Petco.com.