Egg and butter company Vital Farms (NASDAQ: VITL) beat Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 10.1% year on year to $166 million. The company’s full-year revenue guidance of $787.5 million at the midpoint came in 1.7% above analysts’ estimates. Its GAAP loss of $0.72 per share was 51.4% below analysts’ consensus estimates.
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Vital Farms (VITL) Q2 CY2026 Highlights:
- Revenue: $166 million vs analyst estimates of $164.7 million (10.1% year-on-year decline, 0.8% beat)
- EPS (GAAP): -$0.72 vs analyst expectations of -$0.48 (51.4% miss)
- Adjusted EBITDA: -$26.61 million (-16% margin, 189% year-on-year decline)
- The company reconfirmed its revenue guidance for the full year of $787.5 million at the midpoint
- EBITDA guidance for the full year is $5 million at the midpoint, above analyst estimates of $3.56 million
- Operating Margin: -24.2%, down from 12.9% in the same quarter last year
- Free Cash Flow was -$44.06 million compared to -$7.63 million in the same quarter last year
- Market Capitalization: $524.5 million
Company Overview
With an emphasis on ethically produced products, Vital Farms (NASDAQ: VITL) specializes in pasture-raised eggs and butter.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $765.7 million in revenue over the past 12 months, Vital Farms is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.
As you can see below, Vital Farms’s 21.4% annualized revenue growth over the last three years was excellent. This shows it had high demand, a useful starting point for our analysis.
This quarter, Vital Farms’s revenue fell by 10.1% year on year to $166 million but beat Wall Street’s estimates by 0.8%.
Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, a deceleration versus the last three years. Still, this projection is above the sector average and implies the market sees some success for its newer products.
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Cash Is King
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Vital Farms’s demanding reinvestments have drained its resources over the last two years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 9%, meaning it lit $9.03 of cash on fire for every $100 in revenue.
Taking a step back, we can see that Vital Farms’s margin dropped by 16.1 percentage points over the last year. Almost any movement in the wrong direction is undesirable because it is already burning cash. If the trend continues, it could signal it’s becoming a more capital-intensive business.
Vital Farms burned through $44.06 million of cash in Q2, equivalent to a negative 26.5% margin. The company’s cash burn increased from $7.63 million of lost cash in the same quarter last year.
Key Takeaways from Vital Farms’s Q2 Results
We were impressed by Vital Farms’s optimistic full-year EBITDA guidance, which blew past analysts’ expectations. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. On the other hand, its EBITDA missed and its gross margin fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $12.36 immediately after reporting.
So should you invest in Vital Farms right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
