Greetings, and welcome to the Black Rifle Coffee Company Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matthew McGinley, Vice President of Investor Relations. Thank you, sir. You may begin. Good morning, everyone, and thank you for joining Black Rifle Coffee Company's Second Quarter 2025 Financial Results Conference Call. We released our results yesterday, and the press release and related materials are available on our investor relations website at ir.blackriflecoffee.com. Before we begin, I would like to remind you of the company's safe harbor statement regarding forward-looking statements. During today's call, management may make forward-looking statements, including guidance in the underlying assumptions. These statements are based on expectations that involve risks and uncertainties, which could cause actual results to differ materially. For a further discussion of these risks, please refer to our previous filings with the SEC. Additionally, this call will include non-GAAP financial measures such as adjusted EBITDA. Whenever we refer to EBITDA, we mean adjusted EBITDA unless otherwise noted. Reconciliation of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release, which was furnished to the SEC and is available on our investor relations website. Now, please refer to the presentation on our investor relations website and turn to slide four. I would now like to turn the call over to Chris Mondzelewski, CEO of Black Rifle Coffee Company. Mons? Thanks, Matt. Good morning, everyone. Joining me today are Evan Hafer, our Executive Chairman, Matt Amigh, our new Chief Financial Officer, and Matt McGinley, our Head of Investor Relations. As we enter the second half of the year, I want to acknowledge our team here at Black Rifle. Over the past year, we've taken meaningful steps to build a more disciplined and resilient organization, tightening execution, investing in critical capabilities, and preparing the business to scale more efficiently. That foundation enabled us to deliver results in line with our expectations this quarter, even as the macro cost environment became more challenging. As I noted last quarter, our organizational nimbleness has allowed us to navigate change and stay on course. We remain highly focused on positioning the business for long-term growth. We'll continue to expand our footprint with key retail partners to build momentum in both packaged coffee and ready-to-drink beverages, and to ensure that every dollar we invest in the brand drives meaningful, measurable impact. That includes leaning into what's working while staying disciplined in our execution and continuing to innovate. We're encouraged by the progress and confident in the opportunities that lie ahead. Let's move to slide six. During the second quarter, Nielsen data showed a modest decline in unit volume for the U.S. coffee category within the food, drug, and mass channels. Despite this, category sales grew, driven largely by pricing actions taken across the industry. Black Rifle significantly outperformed the category, delivering 32% sales growth on a 29% increase in unit volume, well ahead of the category's 9.6% sales growth and 1% decline in units. Our distribution momentum continued this quarter with strong gains in grocery and mass merch retailers. In grocery, ACV increased by 19 percentage points year- over- year to reach 46.5%, while total ACV across all tracked channels rose 15 points to 56.6%. We continue to see significant room for expansion, both through new retail partnerships and by deepening our presence with existing customers. While we launched with a strong assortment at our largest retail customer, averaging 19 items on shelf and capturing 9.3% share in the bagged category, we typically begin with a smaller presence at new grocery and mass accounts. Our land and expand strategy is working as intended. We start with a few SKUs to establish presence, then grow assortments as performance warrants. We continue to see that play out across key accounts where strong velocities are translating into additional shelf space. In addition to gains in grocery and mass, we've expanded in club and secured national distribution with the leading rural lifestyle retailer. These moves increase visibility, drive trial and repeat, and grow household penetration. Moving to slide seven, our direct-to-consumer channel remains a key pillar of our broader digital strategy, offering a direct connection to our most loyal customers and generating valuable insights that shape brand and product decisions. Whether purchasing directly from Black Rifle or through a digital retail partner, consumers have ample opportunities to have our products delivered to their door directly. While the majority of our recent growth has come from brick-and-mortar retail, I'm pleased to report, consistent with what we've shared on prior calls, that our digital channel stabilized in the quarter and returned to growth. In the second quarter, DTC revenue was 7.8% lower year- over- year. However, after adjusting for a $2.4 million loyalty reserve benefit that was recognized in the prior year, sales in the channel were actually slightly positive. We also saw strong growth across key third-party e-commerce platforms, underscoring our ability to capture demand in high-traffic digital marketplaces and meet consumers where they prefer to shop. We've made meaningful enhancements to both the subscription and non-subscription experience. Updates to our website and mobile app have improved usability, while backend improvements have enabled more precise merchandising and SKU optimization. For Coffee Club members, we've expanded perks, introduced prepaid subscription options, and launched a new brand portal featuring partner benefits and members-only gear. Our digital business remains a vital channel for fostering loyalty, testing new offerings, deepening customer relationships, and supporting our expansion with some of the nation's largest retailers. We're committed to evolving it in ways that drive long-term growth. On slide eight, our ready-to-drink coffee business continues to outperform the broader category. In the second quarter, we delivered 7% sales growth in a category that declined 4%, according to Nielsen. Unit volume for Black Rifle was up 9%, while category units fell 6%, a clear testament to the strength of our brand and our ability to grow in a contracting market. We've maintained our position as the third-largest RTD coffee brand in the U.S., and during the quarter, we expanded ACV by 6 points year- over- year to reach 53.5%. While we've made meaningful progress, we're still in the early stages of realizing the full opportunity, with approximately half the market still available to be penetrated. Similar to our bags and pods business, we will continue to drive outsized growth through new retail partnerships and expanded shelf presence with existing customers. Slide nine. We've made strong progress in the launch year of Black Rifle Energy and are pleased with its momentum building at retail. Since launching in January, distribution has steadily expanded, and by the end of the second quarter, the product was available in over 15,000 retail locations, reaching 23% ACV. While the energy drink category is highly competitive, the early traction gives us confidence in the brand's ability to continue gaining shelf space and driving sales. We're executing a disciplined rollout in partnership with Keurig Dr Pepper and their national direct store delivery network, supported by marketing efforts aimed at building awareness and trial, particularly in the convenience channel, where the energy drink category is most active. Our entry into energy is grounded in clear consumer data. The majority of our coffee customers also purchase energy drinks, and a significant portion of our digital audience engages with the brand, even if they don't drink coffee. We see this as a natural extension of our brand and a compelling long-term growth opportunity, one that expands our reach, adds consumption occasions, and brings new consumers into the franchise. We're encouraged by the early results and excited about what's ahead. Finally, I want to take a moment to highlight the work we continue to do at the intersection of brand, mission, and service, a focus that remains central to who we are. For Evan, myself, and our organization, this serves as the long-term bellwether of what truly defines Black Rifle. In the second quarter, we deepened our engagement with the communities that define our brand: service members, veterans, first responders, and their families. From major Fourth of July activations at Fort Campbell and Camp Lejeune, where we supported tens of thousands of military families, to events commemorating the Army's 250th birthday, to on-the-ground disaster responses in Kerrville, Texas, our team showed up in meaningful ways. In Kerrville, we remained on site for several weeks following severe flooding, distributing hot coffee, thousands of cans of Black Rifle Energy and RTD coffee, and offering support to first responders working through a challenging recovery. This work isn't about marketing or optics, it's about impact. It's about showing up when and where we're needed and standing behind the people who represent the very best of our country. That sense of purpose continues to drive our brand forward. It's what makes Black Rifle more than a beverage company, it's what makes us a community. Before we dive into the financials, I also want to take a moment to welcome Matt Amigh, our new Chief Financial Officer. Matt brings nearly 30 years of experience in the consumer packaged goods industry. He's been with us for just under a month, but he's hit the ground running, and we're excited to have him on board. With that, I'll turn it over to Matt to walk through the quarter. Thank you, Mons. I've been a huge fan of Black Rifle since the business was founded nearly a decade ago, and it's a real honor to join this team. The brand has a significant opportunity for growth across packaged coffee, ready-to-drink, and energy, and multiple other channels. I'm excited to be part of that momentum and help support the team as we scale this business together. I'll begin my remarks on the quarter with slide 11. Second quarter net revenue increased 7% year- over- year, driven primarily by growth in the wholesale segment. We are cycling a net $3 million impact from prior year barter transactions and a $2.4 million benefit related to a change in loyalty reward accruals recognized in the second quarter of 2024. Excluding these items, second quarter revenue increased 14%. Our wholesale segment, which primarily sells packaged coffee and ready-to-drink beverages to retail, grew 14% year- over- year. Adjusting for the $3 million in non-recurring revenue in the prior year, sales in this segment increased 21% in the second quarter. Growth was led by strong performance from Black Rifle Energy, as well as new distribution gains and expanded shelf presence in grocery and mass merchandise retailers. Revenue in our direct-to-consumer segment was 8% lower in the second quarter. Excluding the $2.4 million impact from the prior year loyalty rewards accrual change, revenue in this segment increased modestly. Our focus remains on ensuring that Black Rifle products are available wherever our consumers shop, whether it's in brick-and-mortar retail or online platforms like blackriflecoffee.com, Amazon, or walmart.com. While we will continue allocating resources towards the wholesale channel, we're encouraged by the progress we've made in stabilizing our direct-to-consumer business. The outpost segment grew revenue by 11.3%, driven by higher franchise fees and an increase in average order value, supported by enhanced merchandising and more effective bundling strategies. Slide 12. Gross margin was 33.9% in the second quarter, reflecting a 790 basis point reduction compared to the prior year. The decrease was primarily driven by a 430 basis point impact from green coffee inflation, a 290 basis point impact from trade and pricing, and a 160 basis point impact related to the change in loyalty reward accruals. These margin pressures were partially offset by 170 basis points, a benefit from productivity gains and more favorable product mix. Slide 13. Given the ramp-up in wholesale distribution, seasonal factors, and the timing of the trade and advertising spend, we anticipated that both revenue and EBITDA would be more heavily weighted towards the back half of the year. In the second quarter, gross margin pressure, partially offset by higher volume, contributed to a $5.1 million decline in adjusted EBITDA from the same period last year, bringing the total to $2.4 million for the second quarter. Operating expenses were relatively flat compared to the second quarter last year and did not have a material impact on the change in adjusted EBITDA. Our quarter-end headcount was approximately 20% lower year- over- year, resulting in lower salaries, wages, and benefits. We largely reinvested those savings into marketing to support growth. General and administrative expenses increased 31%, primarily due to legal costs related to matters resolved after quarter end and higher depreciation tied to capitalized software, both of which are added back in the calculation of adjusted EBITDA. Moving to slide 15, we are maintaining our full-year revenue guidance of $395 million - $425 million. We continue to expect a sequential step-up in revenue throughout the year, driven by ongoing distribution gains in both packaged coffee and energy, as well as targeted marketing and trade investments to drive brand awareness and repeat purchases. While the step-up remains on track, current pacing implies that we may finish towards the lower end of the range. As a reminder, we are cycling $30.4 million of prior year revenue that was driven by one-time factors and not expected to recur in 2025. This represents a $5.8 million headwind in the second quarter and is expected to have a $3.6 million impact in the third quarter. We continue to expect full-year gross margins in the range of 35% - 37%. We delivered 35% in the first half and expect a modest improvement in the second half as pricing and productivity gains help partially offset the new impact of tariffs. Since the U.S. does not have geography suitable for large-scale coffee production, we import the majority of our green coffee from Central America, Colombia, and Brazil. We have flexibility to shift purchases between origins if pricing becomes unfavorable. As we noted on the last quarter's call, tariff-related cost pressures were incremental to our original expectations on gross margin and adjusted EBITDA. We indicated last quarter that both metrics would likely fall below the midpoint of our full-year guidance ranges, and that remains our expectation. Key drivers of the margin outlook compared to the prior year include: at least 300 basis point headwind from green coffee inflation net of pricing actions, a 250 basis point impact from incremental trade investment behind the energy line, and a more normalized promotional cadence. At least 100 basis point margin impact from recently implemented import duties, with the full effect expected in the second half. These pressures are expected to be partially offset by at least 200 basis points of productivity initiatives and a more favorable product mix. Looking ahead to 2026, we've secured approximately 40% of our expected coffee needs through forward purchase agreements and will continue to lock in additional supply through the end of the year. If green coffee spot pricing remains stable, we expect it to have a neutral impact on gross margins in 2026, representing neither a material headwind nor tailwind. We remain focused on improving gross margins through productivity initiatives that we continue to work on across our supply chain, and we'll evaluate further adjustments for our pricing architecture, consistent with actions taken by other packaged coffee manufacturers. For adjusted EBITDA, we're maintaining our full-year guidance of $20 million - $30 million. We remain focused on driving operating leverage by tightly managing gross profit and expenses to ensure we can scale efficiently while supporting the long-term growth of the business. We remain on track to achieve $8 million- $10 million of annualized cost savings from organizational efficiency initiatives launched this quarter. Subsequent to quarter end, we raised $40.25 million in gross proceeds through an equity offering of our Class A common stock. While the capital will ultimately support the continued rollout of the energy portfolio, the immediate use of the proceeds was to retire outstanding balances on our revolver. We were impressed with the quality of the investor base brought in through the raise and expect the offering to enhance trading liquidity going forward. In addition to strengthening our balance sheet, this also helps mitigate potential risk to our investment and growth plan as we look to 2026, particularly if coffee prices or tariffs were to move unfavorably and result in at least $1 million of interest expense savings this year. Before we move to Q&A, I want to thank both the internal team and our external partners and investors for the warm welcome and continued support. I am grateful for the opportunity to step into this position and join a company with a strong foundation and meaningful growth ahead. I believe deeply in the mission, the team, the strategy, and of course, the brand. I'm excited about what we can accomplish together and look forward to what's ahead. Operator, we are now ready for the Q&A session. Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. That's star one at this time. One moment while we profile the first question. The first question comes from Mike Baker with D.A. Davidson. Please proceed. Thanks, guys. Good quarter. I wanted to ask you about the three-year outlook which you maintained in your presentation. It requires a pretty significant ramp in 2026 and 2027 versus the 2025 outlook. Can you talk about the key drivers to that? Is it energy drink? Is it ready-to-drink? Is it more retail customers, more doors per customer, more SKUs per door, et cetera? Just one of the building blocks to get that kind of ramp in 2026 and 2027. Thank you. Hey, Mike. It's Chris. Thanks for the question. Let me frame things up a little bit, kind of how we look at it strategically, and then I'm going to kick it over to Matt here, who can elaborate a little bit on it. We're going to continue to maintain that guidance. I think, you know, when you look at our business right now, one of the things we're very proud of is that all aspects of our business are growing. While we don't give, you know, segment guidance at this point, every piece of our business, whether you're talking the pods, the bags, the RTD coffee, and of course, energy, which we launched this year, are growing for us, as is outposts, which was not growing a year ago. One of the ones we're most proud of, given some of the hard work we've done, even driving efficiency, is our DTC business. When you look at our DTC business as a whole, as you strip out the loyalty points, that is now growing for us as well. With every segment of our business growing, while we're not going to give guidance on exactly where that 10% -1 5% overall is going to come from, suffice to say that we have a lot of tools in our tool belt that we can pull from. Matt, you want to build on that at all? Yeah, I would just say, Mike, that when you look at the ACV that we have right now across packaged coffee and RTD, we still have a ways to go. We're sitting at about 56% on packaged coffee and about 54% on RTD. We can expect anywhere from 80% - 85% ACV across FDM. As Mons mentioned, DTC, we're super happy with the performance in the second quarter, stabilizing the business in the second quarter, and then looking forward to making the right investments in that business to scale that business in a very efficient manner. We do see line of sight to the long-range guidance. OK, great. Makes sense. A couple more. One, I wanted to ask about Walmart. In your queue, it was about, I think it was, what, 26% of sales versus 33% last year. I guess that's good in that you're seeing some diversification, but there might be some routing in there, but it does imply down year- over- year. Can you talk about why that would be down? I guess related to that, I don't know. I've been asked about this, and I've seen it. We've seen Fire Department Coffee advertised from Walmart. What's the line like you guys? Can you talk about the competition at Walmart? Yeah, let me address that. When we look at the overall sales within Walmart, the internal sales are going to move back and forth based on a number of factors, timing of shipments, et cetera. We have talked about losing one item last year in the canister, which has hit us. We're actually coming up lapping that. We're going to be going back into some regions with that item coming in Q3. Most importantly for us is takeaway, right? We look at the scanner takeaway in the Walmart stores because that is always what will predict future sales. The reality is we continue to be very strong in Walmart. Given the fact that we're in full distribution, there is no additional store count benefit that's going to come from Walmart. Yet, we continue to grow at near 10% in our takeaway or our store consumption with Walmart, which ultimately will lead, of course, to the internal revenue as well. A component of that is simply timing. The reality is as we go into Q3 and Q4, we're excited about some of the innovation that we're going to be pushing on top of all of the core items that have continued to do well there. We sit very bullish, very bullish with them continuing, obviously, our number one customer continuing to be by far our number one customer. Competition, we love competition. I think Fire Department's a great brand. I don't look at it as direct competition. We don't see any correlation of their success with us. We love the fact that they're a brand that was founded by a first responder. We know him. Again, I think for us, we're going to continue to play our game across every segment in grocery and in Walmart. We continue to be able to demonstrate growth at the register, which is what really counts, where that consumer takes it away. While the competition will always be fierce in these categories, we continue to believe that our distinctive brand positioning is protecting us well there. Fair enough. If I could ask one more real quick, what was I going to ask? I guess I'll turn it over to someone else. If I think of my question, I'll come back. Thanks. Thank you. The next question comes from Glenn West with William Blair. Please proceed. Hey, guys. Glenn West on for Jon Andersen. One thing I wanted to ask about on slide eight where you're showing kind of the RTD, ACV, and share data. Obviously, ACV increasing, and there's probably a little slight lag to this, but the share kind of staying steady there at toward 6% for the past couple of quarters. Can you guys talk about what you're going to do to kind of drive that share higher? Is that still just more distribution, or is there a more targeted marketing coming in? How are we going to push it higher from there? Hey, Glenn, it's Chris. Yeah, I mean, you're right in your assumption. I think that's one factor, which is that ACV is always a leading indicator of what's then going to come from sales. We've talked about this a bit in the past. As we build ACV, we tend to give guidance on ACV, but we'll always remind that ACV in itself is not always a direct indicator of revenue. It's a direct indicator that you're on shelf of a new set of customers, which then, assuming we execute well, will result in revenue in that particular customer group. That is largely what you're seeing. We have some large national customers that have come on board with us, which is driving that spike in ACV. Those velocities always start lower. As they come up, you're going to start to see that share number come up as well. Broadly, we just couldn't be more excited about this piece of our business. We're the number three player in the market right now, and we continue to grow at a much faster rate than the other larger players in the category. We're going to continue to take advantage of that because it's a strong story for us with retailers. We have some significant innovation, which we're not ready to talk about specifically yet. That'll be coming later this year. We're going to use our momentum to build off of that. We've talked a bit in the past about what we've been doing to optimize our organization in facing into cost pressures. Within that, we have been investing heavily in the areas that we know are going to be important to us to succeed. The sales force, in this case, we have put some really powerful sales assets in place, particularly with our RTD business that, again, are going to just be sharpening that execution even further. High level of confidence on my part that you're going to start to see those share numbers start to tick up behind that ACV increase as well. OK, that's helpful, color. Thank you. Maybe one follow-up, not to hit on ACV again, but energy, one thing that stuck out to me is that it's only 7% ACV in convenience stores. Obviously, C-store is super important for energy. What's kind of the distribution look like in the strategy there for Energy, specifically in that C-store channel? Yeah, that was a very specific target that we went after. We're actually right where we had hoped to be on energy. You may recall in the past, I've talked a bit about the markets. We chose to go into a limited number of markets in the first year. That was a conversation we had with Keurig Dr Pepper. We really wanted to get the model right. We really wanted to, you know, learn how to market this correctly in those cities. We chose cities that had strong category and brand indexes. Obviously, you know, you can imagine across South Texas, you know, San Diego was one. We've done well there. In many of those cities, the ACV within those cities tends to be somewhere between 50% and 70%. The aggregate of that, of course, is a lower number when you look at it nationally because there are some very big geographies that we're simply not distributed in yet. That was a purposeful choice that we made alongside Keurig Dr Pepper. Energy, you know, for us is a great future growth platform, but we also want to make sure that we're never stealing resources, you know, from coffee, which is core to us, right? We just talked about our RTD coffee business and the size of that, number three in the market. Of course, our pods, our bags business continue to grow well ahead of the market. The lion's share of our resource, you know, will continue to go against that. That allowed us to put targeted, strong investment in those launch markets for energy. Again, the aggregate of that ended up being that 7% ACV. That's helpful, Matt. Appreciate the time, guys. Thanks, Glen. Next question comes from George Kelly with ROTH Capital Partners. Please proceed. Hey, everybody. Thanks for taking my questions. First one is just on your expectations for pricing in the back half of the year. Wondering if you could share a little bit just about what your plans are by business segment, just broadly. I guess secondarily, have you continued to tweak your bagged coffee pricing at Walmart? I thought I saw another change just recently when I was on the store. Any detail there would be helpful. Thanks. Good question, George. Thanks for that. We never comment on future pricing. Obviously, you can appreciate that. We'd want to tell our customers first and then go to the street. I can tell you that we did execute a pricing action across packaged coffee in May, which is settling into the marketplace right now, which probably explains why you've seen the pricing change on shelf that you've seen. That was largely across packaged coffee and largely across the wholesale market. OK. OK. Second question, you mentioned Club in your prepared remarks. I'm curious if you could be more specific just about what you're seeing at Club. Are you getting more Club distribution? Is it becoming a sort of more material channel for you? I know you've had a longstanding customer there, but maybe it's broadened. How big can that channel be for you? Is that a big focus for 2026? I want to be careful. We're not going to give any specific guidance on any customer individually. However, Club as a channel is a significant portion of the categories that we operate in. They're great sellers of coffee, ready-to-drink coffee, and energy. They obviously play a different role than the other channels that we're in. For a brand with our strength, well over 50% brand awareness at this point, a channel like this makes a lot of sense. Our early indicators are that we're going to have a great deal of success here. What I will say is at this point in time, we have programs going with all three major clubs. We are in distribution with all three major clubs. As you know, they all operate very differently. The way we're doing these programs, we're working in line with their go-to-market strategies. Like every other part of the business, we're going to test our way in to ensure that we understand the model, that we understand how to get strong returns on the marketing that we put against that channel or that customer. As we see success with that, we're going to double down on it. Final point, you mentioned it'll be part of our plan in 2026. Again, we're not going to piece apart where that growth plan comes from. Back to the earlier question, 10% -1 5% guidance that we're giving over the next few years, this is just one additional tool, as you point out, all of that open distribution in the market that we know, given some of the successes we've had against the three largest clubs out there that we have, we have some great growth opportunity going forward. OK, that's helpful. Last one, just something I noticed in your queue, the Salt Lake property. It looks like that's either going to go up for sale or has sold already. What is the plan there? Are you going to lease it, or are you moving headquarters? Any detail there? George, thanks for the question. Yes, the facility is held for sale right now. You saw that in the queue. We're looking for something that's more suitable for the size of the organization. The building was great as we started to evolve the business, but now, with distribution centers across the U.S. and manufacturing in Tennessee, we no longer need a facility of that size. It doesn't change our structure of the organization, which will be head office in Salt Lake City. We have an office in Nashville and one in San Antonio, Texas. OK, thank you. The next question comes from Joseph Altobello with Raymond James. Please proceed. Hey, good morning. This is Martin on for Joe. I just want to quickly touch on the energy rollout. Congratulations on getting over 15,000 doors. You described the rollout as disciplined. Just trying to get an idea of what the back half ramp up might look like for energy. Is there a target for how many doors? We're not going to release a target on the number of doors. We're going to stick to kind of what we said, which is that it's a limited number of geographies that we're going into. The geographies we're operating in now are the geographies that we will continue to operate in the remainder of the year. Obviously, as we go into next year, there will be significant expansion. The reality, though, is that you are going to see upside simply because we're going to continue to drive those markets, right? As we have gone into the year, we've been able to drive ACV to a higher level. The marketing that began, as you recall, back in March, April, is going to continue. We continue to build awareness of, obviously, the brand, but even more importantly, particularly the specific offerings of energy in this specific case. Again, I'm not going to give guidance on any increases we expect to see in the back part of the year, but suffice to say, within the geography that we have operated in thus far in the year, we continue to hopefully see increases behind the marketing that we're doing in the back part of the year. OK, understood. Just as a follow-up, sort of a housekeeping item, you released preliminary gross margins, and the reported gross margins fell just a little bit short of that. Was there something that happened that sort of impacted the margins in between the time between the pronounced numbers and the actual results? Yeah, thanks for that question. Yes, when we did the raise, we were in the midst of the second quarter close. Through that close process, we identified some obsolete inventory raw materials, and we took a reserve against the raw materials. It wasn't a very material item, and that's the difference between the $34.1 million and the $33.9 million gross margin that we ended with. Great. Thank you. Congratulations and good luck. Thank you. The next question comes from Daniel Biolsi with Hedgeye. Please proceed. Good morning. I was wondering if you could share the price versus volume components of the 14% wholesale growth for RTD and bagged coffee, and if you don't have it exactly, just directionally. Thank you for the question. It is 100% of volume. The pricing really didn't settle in until the third quarter. We'll see that effect going forward, with a partial quarter impact in Q3 and a full-on impact in Q4. I think, Daniel, that's one of the things we're really excited about, that we've been able to drive the growth that we have purely off of units, which, again, for a business in our situation where penetration is going to be king for us, bringing on new consumers and every customer, that's kind of a bellwether metric for us. To Matt's point, we'll have the additional weapon of pricing going forward. OK, I think this probably half answers my next question. I was hoping you could sort of bucket the biggest swing factors from the first half of the year to the second half of the year, with maybe the $20 million plus adjusted EBITDA target for the year. What are the biggest swing factors from the first half to the second half? I guess pricing is going to be the number one. Yeah, that's a great question. We provide annual guidance, and I don't want to get in the habit of providing quarter-to-quarter guidance. Given that our expectations are a large step up in revenue as well as EBITDA, I think I could certainly appreciate the question, and we'll provide some color on that. When we look at revenue, revenue is going to step up from Q2 to Q3 and then take a larger step into Q4. That is driven by the significant distribution gains and the velocity strength that we're seeing across gross food, drug, and mass right now, as well as the stabilization and the pivot to modest growth on DTC. Couple that with the growth that we're seeing across C-store when it comes to the RTD, and of course, energy is in the mix. Pricing does play a large part in that sequential step up. That pricing will affect the partial quarter impact in Q3 and then full-on in Q4. Also keep in mind we're going to have lower slotting as we get to the back half of the year. Most of the slotting dollars behind new distribution on coffee, as well as ready-to-drink and energy, happened in the first half. That'll be a tailwind going into the quarter. When you think about the quarterly step up, Q1 at about $90 million moving to Q2, $94.8 million. Q3 will be at or above $100 million. You can do the math on Q4 where we have another sequential step up. The sequential step up in Q4 is very important because that's where we have the highest seasonality in the business. Think about that as direct-to-consumer with Cyber Week and Black Friday, as well as the increased foot traffic that really bodes well for our wholesale business through the holiday season. When you look at EBITDA, we're guiding to $20 million- $30 million. We feel like we're going to fall below that midpoint, but there is a significant step up in EBITDA. The EBITDA trails revenue, right? Those gross profit dollars come along with the growth in revenue over the back part of the year. Take into account we're also going to bring more operational efficiencies into the picture in Q3 and Q4 as the operational efficiency project kicked off in the second quarter really matures and generates savings in the back half. Finally, there's a modest decrease in marketing investment. Our plan was mostly front-end loaded, and we have a modest decrease in marketing investment in the back half. That was very helpful. Thank you. Thank you. Once again, to ask a question, that's star one at this time. We have a follow-up question from Mike Baker with D.A. Davidson. Please proceed. OK, thanks. I remembered my question. I wanted to ask about the energy drink. Any color you have, you gave us some ACV numbers and talked about selling. Any maybe small qualitative, but discussion on sell-through. What are your retailers telling you? Related to that, can you remind us about the customer merchandising agreement that kicks in next year and how that can help the energy rollout? Thanks. Yeah. Hey, Mike. No, thanks. I think, you know, I'll reiterate what I said before and maybe give a little bit more color. We're very pleased with, you know, where we're at with the rollout. Again, limited geographies, only a couple of national customers. We've been very focused on those national customers. I talked to the geographies a bit. I think if you think about the national customers we're in, we've been delighted with the performance. If you look at it, it's one large national C-store chain, and it's obviously our other largest national customer. In both cases, the velocities have increased quarter on quarter, which is exactly what we would expect beyond. In both cases, the velocity has increased quarter on quarter. On top of that, we're starting to get, I'm not going to quote velocity numbers, but we are starting to get into the range of some of the larger players that are out there, which means that, yeah, to answer your question, I'm not going to speak for the retailers, but we're having very positive conversations with them about the product and the performance of the product on shelf. We're bullish as we go in. Obviously, the sell season is going to be an important one for us this year. As you would imagine, we're approaching a lot more national customers, as well as additional regional customers as we go into next year. That sell season is going to be very important for us. We believe that we are armed with exactly what we wanted, which was the data from our initial rollout in order to be able to go in and put a strong proposal together that says, this is why Black Rifle can play a very important part of your overall energy portfolio. Whether you're looking at it through the lens of the two national players or whether you're looking at it through the lens of the local markets we've gone into, we've been pleased so far with the results. You mentioned CMA. This was a big part of why we went into business with Keurig Dr Pepper. They obviously have a lot of scale. As we had talked about, again, I'm not going to talk to the details of exactly what we're negotiating for our plans next year. What we've said publicly before is this was going to be a test year for us in the markets that we went into. As we go into next year, we're going to build off of that. I don't expect that we're going to be in full national distribution next year, but we're going to build off of our successes. We're going to move into enough geographies that we know we are healthily building on our success while still allowing, again, for us to be able to put the full support against the core of our business, which is our coffee business and our RTD coffee business. More to come as we get into the latter part of the year. We'll probably provide a little bit more guidance on that, but expect it to play a key role in the plan next year. Perfect. Thank you for the follow-up. Thanks, Mike. Thank you. At this time, I'd like to turn the floor back over to management for any additional or closing comments. Yeah, just real quickly, I think we always talk a lot about the numbers of the business. I want to just point everyone to really what the founders, myself, are proudest of in this business is our brand, the fact that we continue to build that brand in such an authentic manner. You heard about some of the stuff I talked about up front in my comments on the programs we have going on. For those that are newer to Black Rifle Coffee, this is the lifeblood of what our business is. It's why we're all here. It allows us to play a meaningful role in giving back to America and those that matter most in America, our veterans, our first responders. It also builds our brand. It builds authenticity in our brand. It builds distinctiveness, and it's actually building awareness. We're seeing our brand awareness go up significantly off of these programs we're doing. We're super proud of that, and I want to make sure that that gets mentioned. With that, I appreciate everyone taking the time, and we'll talk to you next quarter. Thank you. This does conclude today's teleconference and webcast. You may disconnect at this time. Thank you for your participation and have a great day.