Oatly Group (NASDAQ:OTLY) executives highlighted what they called the company’s “first full year of profitable growth” during its latest earnings call, pointing to positive adjusted EBITDA for the full year, improving gross margins, and early signs that a refreshed growth strategy is gaining traction across markets.
Management frames 2025 as a turning point
Chief Executive Officer Jean-Christophe Flatin said Oatly has transitioned from “structurally unprofitable with slowing growth” to “structurally profitable with accelerating growth,” crediting a combination of efficiency efforts and targeted reinvestment behind a “refreshed growth playbook.”
As part of its cost and supply-chain work, Flatin said Oatly reduced cost of goods sold per liter by 23% and cut total SG&A by nearly $100 million, or 21% of revenue. He cited several restructuring actions, including consolidation of co-packers via a strategic partnership in North America and the closure of the Singapore facility, while stressing the turnaround “has not just been a cost-cutting exercise.”
Growth playbook centers on beverages and younger consumers
Global President and COO Daniel Ordoñez described Oatly’s three-pillar strategy as:
- Increased relevance
- Attacking barriers to conversion
- Increased availability to consumers
Ordoñez said the company broadened its target audience beyond lactose-intolerant and environmentally conscious consumers toward “upcoming younger generations,” while narrowing its product focus to beverages. He said that simplification enabled Oatly to expand its addressable beverage occasions beyond coffee into areas such as matcha, cold foams, and “dirty sodas.”
He also said the company is emphasizing taste as the primary driver of adoption, using the internal phrase “lead with taste and reaching with mission,” and shifting marketing toward a “digital-first approach” aimed at Gen Z and Gen Alpha.
Ordoñez said Oatly is seeing encouraging signals, including household penetration rising “for the first time in years.” He added that in Europe, Oatly expanded retail share in every measured market during the second half of the year and recently became the number one plant-based drink brand in Germany. In the U.S., he said the drink portfolio returned to growth in the fourth quarter as the company began to lap prior-year portfolio delistings, supported by distribution gains and sustained velocities.
Innovation pipeline: barista flavors, cold foam, matcha, and fiber
Looking to 2026, Ordoñez said Oatly plans to expand its Barista lineup, noting flavored Baristas such as caramel, vanilla, and popcorn “have been a hit.” He said additional flavors including churros and coconut are planned for launch in 2026.
He also announced a Barista Cold Foam product intended for hot or cold beverages, describing it as a “breakthrough product” and saying plant-based barista cold foam options “aren’t available in the market yet.” Oatly also plans to build on its matcha lineup by bringing flavored matcha products into retail based on flavors performing well in food service.
In addition, Ordoñez said the company will lean into a “fiber-maxing” consumer trend, tying it to gut health and satiety. In response to a question about competitors introducing higher-protein offerings, he argued that health authorities estimate a fiber deficiency of roughly 10 grams per day in the Western world and said Oatly views the market as having a protein surplus. He added that a glass of Oatly can “close the fiber gap by 20%,” and said the company expects to do more on fiber in the future.
Quarterly results: higher margin and positive quarterly adjusted EBITDA
Chief Financial Officer Marie-José David reported fourth-quarter revenue growth of 9.1% (4.3% on a constant-currency basis). She said gross margin was 34.5%, up 580 basis points versus the prior-year quarter, and adjusted EBITDA was positive $11 million, an improvement of $17.1 million year over year.
For the full year, David said revenue increased 4.7% (2.2% constant currency) and adjusted EBITDA was positive $6.8 million, which management characterized as Oatly’s first full year of profitable growth.
In the quarter, the company’s revenue bridge included 2.9% volume growth and 1.4% price/mix, alongside a 4.8% foreign exchange tailwind. The year-over-year gross margin improvement in Q4 was attributed to absorption and supply-chain efficiency benefits (410 basis points), plus pricing and mix (200 basis points), partially offset by inflation (30 basis points) and foreign exchange (10 basis points headwind).
On segment performance, David said Europe and international volume grew 13.9% in the quarter and segment adjusted EBITDA improved by $9.9 million. North America posted an 8.8% revenue decline, which she said was “driven mainly by the change in sourcing strategy at a large customer,” while noting that excluding that customer, North America grew 10% in the quarter. She said North America segment adjusted EBITDA rose to $4.4 million, its “highest-ever quarterly profit.” Greater China constant-currency revenue declined slightly, which management tied to customer order timing shifts between quarters, and the segment reported $1.1 million in adjusted EBITDA.
2026 outlook: continued growth, higher EBITDA, and strategic review in China
For 2026, management guided for constant-currency revenue growth of 3% to 5% and adjusted EBITDA of $25 million to $35 million. David said the revenue outlook includes an approximately 200 basis point headwind from a large North America customer, though the company still expects North America sales to grow for the year. Based on recent rates and assuming no further changes, she said foreign exchange could add roughly 100 to 200 basis points to full-year net sales growth.
David said the adjusted EBITDA improvement is expected to be driven mainly by gross profit improvement from sales growth, absorption benefits, and supply-chain efficiencies. She also said Oatly expects to support rollout of the growth playbook with brand-building investments, especially in the first half, and that guidance assumes “no direct impact from U.S. tariffs” and broadly consistent economic conditions and consumer behavior.
Free cash flow for the full year was a net outflow of $39 million, which David said was $117 million better than the prior year. She said Oatly does not expect positive free cash flow for full-year 2026, but expects improvement versus 2025, driven by higher adjusted EBITDA and working capital improvements. She added that the company closed refinancing activities announced in September and still expects approximately $5 million of non-cash interest expense savings, mainly due to a reduction in outstanding convertible notes.
Capital expenditures are expected to be $20 million to $30 million in 2026, higher than 2025 due to project timing shifts and planned capacity increases in Europe and international. David said the company is confident in its oat-based capacity and expects to add filling capacity in response to accelerated growth in Europe.
Flatin also said the company plans to complete a strategic review of the Greater China segment in 2026, evaluating “a range of options, including a potential carve-out,” with the stated goal of accelerating growth and maximizing business value.
About Oatly Group (NASDAQ:OTLY)
Oatly Group is a Sweden-based food and beverage company specializing in the development, production and sale of oat-derived dairy alternatives. The company’s product lineup includes oat-based drinks, ice cream, yogurts, spreads and cooking creams, all marketed under the Oatly brand name. By leveraging proprietary processing technology, Oatly extracts the nutritional benefits of oats—such as soluble fiber and plant protein—while delivering taste and texture profiles that closely mimic traditional dairy products.
Founded in 1994 as a spin-off from research at Lund University, Oatly initially focused on exploiting the health and functional benefits of oat beta-glucans.
