FRPT

The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report"). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations, and intentions. Our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled "Forward-Looking Statements" in this report and in the section entitled "Risk Factors" in our Annual Report. Overview Freshpet's mission is to help dogs and cats live longer, happier, healthier lives with the people who love them. We were inspired by the rapidly growing view among pet owners that their dogs and cats are a part of their family, leading them to demand healthier pet food choices. Since Freshpet's inception in 2006, we have created a comprehensive business model to deliver wholesome pet food that pet parents can trust, and in the process, we believe we have become one of the fastest growing pet food companies in North America. Our business model is difficult for others to replicate and we see significant opportunity for future growth by leveraging the unique elements of our business, including our brand, our production technology, our manufacturing network, our refrigerated distribution, our Freshpet Fridges and our culture. Components of our Results of Operations Net Sales Our net sales are derived from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Our products are primarily sold to consumers through a fast-growing network of company-owned branded refrigerators, known as Freshpet Fridges, located in our customers’ stores. We continue to roll out Freshpet Fridges at leading retailers across North America and parts of Europe and have installed Freshpet Fridges in approximately 30,721 retail stores as of June 30, 2026. Our products are sold under the Freshpet brand name with ingredients, packaging and labeling customized by class of retail. Sales are recorded net of discounts, returns and promotional allowances. Our net sales growth strategy is driven by the following key factors: •Increasing sales velocity from the average Freshpet Fridge due to increasing awareness, trial and adoption of Freshpet products and innovation. Our investments in marketing and advertising help to drive awareness and trial at each point of sale. •Increasing distribution and penetration of Freshpet products in major classes of retail, including Grocery, Mass, International, Digital, Pet Specialty, and Club. The impact of new Freshpet Fridge installations on our net sales varies by retail class and depends on numerous factors including store traffic, refrigerator size, placement within the store, and proximity to other stores that carry our products. Digital orders include any purchases made online, including our direct-to-consumer business, and may also be fulfilled by our Freshpet Fridge network in brick and mortar stores. •Consumer trends including long-term growth in pet ownership, pet humanization and a focus on health and wellness. •At times we increase our sales price to offset any adverse movement in input costs. Gross Profit Our gross profit is net of costs of goods sold, which include the costs of product manufacturing, product ingredients, packaging materials and inbound freight, as well as depreciation and amortization and non-cash share-based compensation. 24 Table of Contents We expect to continue to mitigate any adverse movement in input costs through a combination of cost management and price increases. Selling, General and Administrative Expenses Our selling, general and administrative expenses consist of the following: Outbound freight. We use third-party logistics providers for outbound freight that ship directly to retailers as well as third-party distributors. Marketing & advertising. Our marketing and advertising expenses primarily consist of television advertising, digital, and social media channels. Our digital efforts span a range of platforms and environments, including company and retail websites, retail media networks, search engines, blogs, and online reviews. These expenses may vary from quarter to quarter depending on the timing of marketing and advertising campaigns. Freshpet Fridge operating costs. Freshpet Fridge operating costs consist of repair costs and depreciation. The purchase and installation costs for new Freshpet Fridges are capitalized and depreciated over the estimated useful life. Freshpet Fridges purchased in 2025, and after, are protected by a manufacturer warranty of five years, while those purchased prior to 2025 carry a three-year manufacturer warranty. We subsequently incur maintenance and freight costs for repairs and refurbishments handled by third-party service providers. Research & development. Research and development costs consist of expenses to develop and test new products. The costs are expensed as incurred. Brokerage. We use third-party brokers to assist with monitoring our products at the point-of-sale as well as representing us at headquarters for various customers. These brokers visit our retail customers’ store locations to ensure items are appropriately stocked and maintained. Share-based compensation. The Company recognizes share-based compensation based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The Company estimates grant date fair value of its options using the Black-Scholes Merton option-pricing model. Service and performance based restricted stock units are measured based on the fair market value of the underlying stock on the dates of the grants whereas market based restricted stock units, such as total shareholder return awards, are measured using the Monte-Carlo simulation. Share awards are amortized under the straight-line method over the requisite service period of the entire award. The Company accounts for forfeitures as they occur. Other general & administrative costs. Other general and administrative costs include non-plant personnel salaries and benefits, as well as corporate general & administrative costs. Income Taxes Income tax expense is comprised of federal and state income tax expense based on the period’s taxable income. As a result of releasing a majority of the valuation allowance in 2025, and the resulting deferred tax asset position, income tax expense for the current period primarily represents deferred income tax expense. 25 Table of Contents Condensed Consolidated Statements of Income For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Amount % of Net Sales Amount % of Net Sales Amount % of Net Sales Amount % of Net Sales (Dollars in thousands) Net sales $ 305,587 100 % $ 264,689 100 % $ 603,231 100 % $ 527,938 100 % Cost of goods sold 176,893 58 % 156,499 59 % 353,863 59 % 315,960 60 % Gross profit 128,694 42 % 108,190 41 % 249,368 41 % 211,978 40 % Selling, general, and administrative expenses 106,985 35 % 90,386 34 % 223,328 37 % 205,671 39 % Income from operations 21,709 7 % 17,804 7 % 26,040 4 % 6,307 1 % Interest and other income, net 2,830 1 % 2,199 1 % 5,713 1 % 4,592 1 % Interest expense (3,483) (1) % (3,749) (1) % (7,069) (1) % (7,208) (1) % Gain on equity investment 4,539 1 % — — % 66,552 11 % — — % Income before income taxes 25,595 8 % 16,254 6 % 91,236 15 % 3,691 1 % Income tax expense (benefit) 6,107 2 % (102) — % 23,240 4 % 32 — % Net income $ 19,488 6 % $ 16,356 6 % $ 67,996 11 % $ 3,659 1 % Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Net Sales The following table sets forth net sales by class of retailer: Three Months Ended June 30, 2026 2025 Amount % of Net Sales Amount % of Net Sales (Dollars in thousands) Grocery, Mass, International and Digital $ 239,025 78 % $ 216,888 82 % Pet Specialty and Club 66,562 22 % 47,801 18 % Net Sales $ 305,587 100 % $ 264,689 100 % Net sales increased $40.9 million, or 15.5%, to $305.6 million for the three months ended June 30, 2026 as compared to $264.7 million in the same period in the prior year. The $40.9 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $22.1 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 15.7%, partially offset by unfavorable price/mix of 0.2%. 26 Table of Contents Gross Profit Gross profit was $128.7 million, or 42.1% as a percentage of net sales, for the three months ended June 30, 2026, compared to $108.2 million, or 40.9% as a percentage of net sales, in the prior year period. The 1.2% increase in gross profit as a percentage of net sales was primarily due to lower input costs and improved leverage on plant expenses, partially offset by higher quality costs related to the startup of new technology lines. Adjusted Gross Profit for the three months ended June 30, 2026 was $148.4 million, or 48.6% as a percentage of net sales, compared to $124.0 million, or 46.9% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below. Selling, General and Administrative Expenses Selling, general and administrative expenses ("SG&A") were $107.0 million, or 35.0% as a percentage of net sales, for the three months ended June 30, 2026, compared to $90.4 million, or 34.1% as a percentage of net sales, in the prior year period. The increase in SG&A as a percentage of net sales was primarily due to increased logistics costs and variable compensation accrual, partially offset by decreased media spend as a percentage of net sales. Adjusted SG&A for the three months ended June 30, 2026 was $96.1 million, or 31.4% as a percentage of net sales, compared to $79.6 million, or 30.1% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below. Income from Operations As a result of the factors discussed above, income from operations increased by $3.9 million to income from operations of $21.7 million for the three months ended June 30, 2026 as compared to $17.8 million in the prior year period. Interest and Other Income, net The Company recorded interest and other income, net of $2.8 million for the three months ended June 30, 2026 as a result of interest income generated from cash and cash equivalents as compared to $2.2 million in the prior year period. Interest Expense Interest expense decreased $0.2 million to $3.5 million for the three months ended June 30, 2026 as compared to $3.7 million in the prior year period. The decrease was primarily driven by higher capitalized interest in the period. Gain on Equity Investment The $4.5 million additional gain on equity investment for the three months ended June 30, 2026, represents certain post-closing adjustments related to the sale of the Company's non-controlling interest in a privately held company following the equity investment's acquisition by a third party, as discussed in Note 1 of our (unaudited) condensed consolidated financial statements. Income Tax Expense (Benefit) Income tax expense increased $6.2 million to $6.1 million for the three months ended June 30, 2026 as compared to an income tax benefit of $0.1 million in the prior year period, primarily attributable to an increase in taxable income. 27 Table of Contents Net Income Net income increased $3.1 million to net income of $19.5 million for the three months ended June 30, 2026 as compared to $16.4 million in the prior year period, primarily due to the additional gain on equity investment and contributions from higher sales, partially offset by the increases in SG&A and income tax expense. Adjusted EBITDA Adjusted EBITDA was $52.2 million for the three months ended June 30, 2026 as compared to $44.4 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See “—Non-GAAP Financial Measures” below. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Net Sales The following table sets forth net sales by class of retailer: Six Months Ended June 30, 2026 2025 Amount % of Net Sales Amount % of Net Sales (Dollars in thousands) Grocery, Mass, International and Digital $ 471,344 78 % $ 432,044 82 % Pet Specialty and Club 131,887 22 % 95,894 18 % Net Sales $ 603,231 100 % $ 527,938 100 % Net sales increased $75.3 million, or 14.3%, to $603.2 million for the six months ended June 30, 2026 as compared to $527.9 million in the same period in the prior year. The $75.3 million increase in net sales was driven by growth in the Grocery, Mass, International, and Digital channel of $39.3 million, with the remaining growth in the Pet Specialty and Club channel. The net sales increase was primarily driven by volume gains of 15.1%, partially offset by unfavorable price/mix of 0.8%. Gross Profit Gross profit was $249.4 million, or 41.3% as a percentage of net sales, for the six months ended June 30, 2026, compared to $212.0 million, or 40.2% as a percentage of net sales, in the prior year period. The 1.1% increase in gross profit as a percentage of net sales was primarily due to lower input costs and improved leverage on plant expenses, partially offset by higher quality costs related to the startup of new technology lines. Adjusted Gross Profit for the six months ended June 30, 2026 was $288.0 million, or 47.7% as a percentage of net sales, compared to $244.3 million, or 46.3% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below. Selling, General and Administrative Expenses Selling, general and administrative expenses ("SG&A") were $223.3 million, or 37.0% as a percentage of net sales, for the six months ended June 30, 2026, compared to $205.7 million, or 39.0% as a percentage of net sales, in the prior year period. The decrease in SG&A as a percentage of net sales was primarily due to a decrease in non-recurring charges that occurred in the first half of 2025, partially offset by increased logistics costs and variable compensation accrual. Adjusted SG&A for the six months ended June 30, 2026 was $197.8 million, or 32.8% as a percentage of net sales, compared to $164.3 million, or 31.1% as a percentage of net sales, in the prior year period. See “—Non-GAAP Financial Measures” below. 28 Table of Contents Income from Operations As a result of the factors discussed above, income from operations increased by $19.7 million to income from operations of $26.0 million for the six months ended June 30, 2026 as compared to $6.3 million in the prior year period. Interest and Other Income, net The Company recorded interest and other income, net of $5.7 million for the six months ended June 30, 2026, as a result of interest income generated from cash and cash equivalents as compared to $4.6 million in the prior year period. Interest Expense Interest expense decreased $0.1 million to $7.1 million for the six months ended June 30, 2026 as compared to $7.2 million in the prior year period. The decrease was primarily driven by higher capitalized interest in the period, partially offset by an increase in interest expense related to a finance lease liability. Gain on Equity Investment The $66.6 million gain on equity investment for the six months ended June 30, 2026, resulted from the sale of the Company's non-controlling interest in a privately held company following the equity investment's acquisition by a third party, as discussed in Note 1 of our (unaudited) condensed consolidated financial statements. Income Tax Expense Income tax expense increased $23.2 million to $23.2 million for the six months ended June 30, 2026 as compared to the nominal income tax expense in the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment. Net Income Net income increased $64.3 million to net income of $68.0 million for the six months ended June 30, 2026 as compared to $3.7 million in the prior year period, primarily due to the gain on equity investment, contributions from higher sales, and decreased non-recurring SG&A charges, partially offset by increases in logistics costs, variable compensation accrual and income tax expense. Adjusted EBITDA Adjusted EBITDA was $90.1 million for the six months ended June 30, 2026 as compared to $79.9 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses. See “—Non-GAAP Financial Measures” below. Non-GAAP Financial Measures Freshpet uses the following non-GAAP financial measures in its financial communications. These non-GAAP financial measures should be considered as supplements to the U.S. GAAP reported measures, should not be considered replacements for, or superior to, the U.S. GAAP measures and may not be comparable to similarly named measures used by other companies. Such financial measures are not financial measures prepared in accordance with U.S. GAAP. •Adjusted Gross Profit •Adjusted Gross Profit as a percentage of net sales (Adjusted Gross Margin) •Adjusted SG&A Expenses •Adjusted SG&A Expenses as a percentage of net sales •EBITDA •Adjusted EBITDA •Adjusted EBITDA as a percentage of net sales (Adjusted EBITDA Margin) 29 Table of Contents We define Adjusted Gross Profit as gross profit before depreciation expense, non-cash share-based compensation, and loss on disposal of manufacturing equipment. We define Adjusted SG&A as SG&A expenses before depreciation and amortization expense, non-cash share-based compensation, loss on disposal of equipment, distributor transition costs, legal obligation and international business charges. EBITDA represents net income (loss) plus depreciation and amortization expense, interest expense net of interest income and, income tax expense. Adjusted EBITDA represents EBITDA less gain on equity investment, plus non-cash share-based compensation expense, loss on disposal of property, plant and equipment, distributor transition costs, legal obligation, and international business charges. We believe that each of these non-GAAP financial measures provide additional metrics to evaluate our operations and, when considered with both our U.S. GAAP results and the reconciliation to their most directly comparable U.S. GAAP measures, provide a more complete understanding of our business than could be obtained absent this disclosure. The non-GAAP measures are not and should not be considered an alternative to the most directly comparable U.S. GAAP measures or any other figure calculated in accordance with U.S. GAAP, or as an indicator of operating performance. We use the non-GAAP financial measures, together with U.S. GAAP financial measures, such as net sales, gross profit margins and cash flow from operations, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance and to compare our performance to that of our peers and competitors. Adjusted EBITDA is also an important component of internal budgeting and setting management compensation. The non-GAAP financial measures are presented here because we believe they are useful to investors in assessing the operating performance of our business without the effect of non-cash items, and other items as detailed herein. The non-GAAP financial measures should not be considered in isolation or as alternatives to net income (loss), income (loss) from operations or any other measure of financial performance calculated and prescribed in accordance with U.S. GAAP. Neither EBITDA nor Adjusted EBITDA should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our non-GAAP financial measures may not be comparable to similarly titled measures in other organizations because other organizations may not calculate non-GAAP financial measures in the same manner as we do. Our presentation of the non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items. We recognize that the non-GAAP financial measures have limitations as analytical financial measures. For example, the non-GAAP financial measures do not reflect: •our capital expenditures or future requirements for capital expenditures; •the interest expense, or the cash requirements necessary to service interest expense or principal payments associated with indebtedness; •depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, nor any cash requirements for such replacements; and •changes in our cash requirements for our working capital needs. Additionally, Adjusted EBITDA excludes (i) non-cash share-based compensation expense, which is and will remain a key element of our overall long-term incentive compensation package, and (ii) certain costs essential to our sales growth and strategy. Adjusted EBITDA also excludes certain cash charges resulting from matters we consider not to be indicative of our ongoing operations. Other companies in our industry may calculate the non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures. 30 Table of Contents The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands) Net income $ 19,488 $ 16,356 $ 67,996 $ 3,659 Depreciation and amortization 24,252 19,896 48,530 41,013 Interest expense, net of interest income 484 1,546 1,189 2,610 Income tax expense 6,107 (102) 23,240 32 EBITDA 50,331 37,696 140,955 47,314 Non-cash share-based compensation (a) 6,380 6,221 15,516 15,037 Loss on disposal of property, plant and equipment 28 485 154 646 Gain on equity investment (4,539) — (66,552) — Distributor transition costs (b) — — — 10,680 Legal obligation (c) — — — 4,987 International business charges (d) — — — 1,273 Adjusted EBITDA $ 52,200 $ 44,402 $ 90,073 $ 79,937 Adjusted EBITDA as a % of Net Sales 17.1 % 16.8 % 14.9 % 15.1 % (a)Includes true-ups to share-based compensation expense. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed. (b)Represents a non-recurring loss as a result of an accounts receivable write-off in connection with the liquidation of one of our pet specialty distributors. Concurrent with its liquidation, we transitioned to a new distribution partner, who is a leading pet specialty distributor and who we anticipate will facilitate sales to pet specialty stores. Thus, despite the transitory impact during the first quarter of 2025, our ability to continue to generate sales is consistent with what we would expect to generate within the pet specialty channel. (c)Represents the net settlement charges for all claims related to the litigation with Phillips. (d)Represents termination costs due to a business change in our international go-to-market strategy. The following table provides a reconciliation of Adjusted Gross Profit to Gross Profit, the most directly comparable financial measure presented in accordance with U.S. GAAP: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands) Gross profit $ 128,694 $ 108,190 $ 249,368 $ 211,978 Depreciation expense 17,858 13,729 35,156 28,909 Non-cash share-based compensation 1,882 1,831 3,469 3,114 Loss on disposal of manufacturing equipment — 260 12 255 Adjusted Gross Profit $ 148,434 $ 124,010 $ 288,005 $ 244,256 Adjusted Gross Profit as a % of Net Sales 48.6 % 46.9 % 47.7 % 46.3 % 31 Table of Contents The following table provides a reconciliation of Adjusted SG&A Expenses to SG&A Expenses, the most directly comparable financial measure presented in accordance with U.S. GAAP: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands) SG&A expenses $ 106,985 $ 90,386 $ 223,328 $ 205,671 Depreciation and amortization expense 6,394 6,167 13,374 12,104 Non-cash share-based compensation (a) 4,498 4,390 12,047 11,923 Loss on disposal of equipment 28 225 142 391 Distributor transition costs (b) — — — 10,680 Legal obligation (c) — — — 4,987 International business charges (d) — — — 1,273 Adjusted SG&A Expenses $ 96,065 $ 79,604 $ 197,765 $ 164,313 Adjusted SG&A Expenses as a % of Net Sales 31.4 % 30.1 % 32.8 % 31.1 % (a)Includes true-ups to share-based compensation expense. We have certain outstanding share-based awards with performance-based vesting conditions that require the achievement of certain Adjusted EBITDA margins, Adjusted EBITDA and/or Net Sales targets as a condition of vesting. At each reporting period, we reassess the probability of achieving the performance criteria and the performance period required to meet those targets. When the probability of achieving such performance conditions changes, the compensation cost previously recorded is adjusted as needed. When such performance conditions are deemed to be improbable of achievement, the compensation cost previously recorded is reversed. (b)Represents a non-recurring loss as a result of an accounts receivable write-off in connection with the liquidation of one of our pet specialty distributors. Concurrent with its liquidation, we transitioned to a new distribution partner, who is a leading pet specialty distributor and who we anticipate will facilitate sales to pet specialty stores. Thus, despite the transitory impact during the first quarter of 2025, our ability to continue to generate sales is consistent with what we would expect to generate within the pet specialty channel. (c)Represents the net settlement charges for all claims related to the litigation with Phillips. (d)Represents termination costs due to a business change in our international go-to-market strategy. Liquidity and Capital Resources To meet our capital needs, we issued approximately $402.5 million in convertible notes in March 2023 (the “Convertible Notes”), used $66.2 million of the proceeds to enter into capped call transactions, and used $11.0 million of the proceeds on debt issuance related costs. We expect to make future capital expenditures in connection with the completion of our planned development of Freshpet Kitchens Ennis Phase 2 and 3. During the six months ended June 30, 2026, we spent approximately $57.3 million of capital to meet our capacity needs as well as recurring capital expenditures. We expect capital expenditures to total approximately $150 million in fiscal year 2026. We expect to rely on our current and future cash flow from operations to fund our growth going forward. However, we may issue additional debt, refinance our existing debt, and/or raise capital through our access to capital markets, if appropriate. Our ability to obtain additional funding will be subject to various factors, including general economic and market conditions, our operating performance, the market’s perception of our growth potential, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions. 32 Table of Contents Our ability to make future minimum interest payments on the Convertible Notes, to refinance any indebtedness and to fund any necessary expenditures for our growth will depend on our ability to generate cash in the future. If our business does not achieve the levels of profitability or generate the amount of cash that we anticipate or if we expand faster than anticipated, we may need to seek additional debt or equity financing to operate and expand our business. Future third-party financing may not be available on favorable terms or at all. Our primary cash needs, in addition to our plant expansions, are for purchasing ingredients, operating expenses, marketing expenses and capital expenditures to procure Freshpet Fridges. We believe that cash and cash equivalents, expected cash flow from operations, amounts previously raised through the issuance of the Convertible Notes and our ability to access the capital markets, if appropriate, are adequate to fund our debt service requirements, operating and finance lease obligations, capital expenditures and working capital obligations for the foreseeable future. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow from operations and our ability to manage costs and working capital successfully. On May 21, 2026, the Company's Board of Directors approved a share repurchase program, which authorizes the Company to repurchase up to an aggregate of $150 million of its outstanding common stock. The share repurchase authorization does not have a fixed expiration date, does not obligate Freshpet to repurchase any specific number of shares and may be suspended or discontinued at any time. The timing and number of shares repurchased will depend on a variety of factors, including price, general business, economic and market conditions, alternative investment opportunities, and funding considerations. The Company intends to fund the repurchases with existing cash, future cash flow from operations, future borrowings or other sources of cash at the Company’s discretion. During the quarter ended June 30, 2026, the Company repurchased $54,370 of shares of its common stock pursuant to the program, and had $95,630 remaining available for repurchase under the program as of such date. Our cash flow generation ability is subject to general economic factors at the international, national and regional levels, including but not limited to increased interest rates and inflation, tariffs, trade wars, geopolitical conflict, war, recession, financial, competitive, legislative and regulatory factors and other factors that are beyond our control, including government or regulatory shutdowns or defunding, or disruptions with or increased costs imposed by our key suppliers or others within our supply chain. Further, such macroeconomic factors could negatively impact consumer sentiment, resulting in reduced demand and changes in purchasing behaviors for some or all of our products and other relevant factors, such as consumer hesitancy to trade up in pet food, deferral of pet-related expenses, and reduced pet adoption rates. While these factors are expected to persist in the near term, the Company has implemented strategic initiatives, including targeted marketing, value-focused product innovation, and expanded distribution in club and mass channels, to mitigate their impact. Management believes these actions will support continued growth and margin expansion, even if the current economic environment remains unchanged. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs. 33 Table of Contents Expanding certain of our Freshpet Kitchens primarily comprises our material future cash requirement. The Company reduced its capital expenditures for manufacturing expansion during 2025, with the 2026 capital expenditures forecast similarly reflecting both a moderation in demand and significant operational efficiencies. These changes are expected to materially improve near-term cash flow and reduce the capital intensity of the business, while maintaining flexibility to scale as market conditions evolve. However, our capital requirements, including our cash requirements, may vary materially from those currently planned if, for example, our revenues do not reach expected levels, or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may seek alternative financing, such as issuing additional debt or equity securities, and we cannot assure you that we will be able to do so on favorable terms, if at all. Moreover, if we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity or if the Convertible Notes are converted to common shares, existing stockholders may experience dilution, and such new securities could have rights senior to those of our common stock. These factors may make the timing, amount, terms and conditions of additional financing unattractive. Our inability to raise capital could impede our growth or otherwise require us to forego growth opportunities and could materially adversely affect our business, financial condition and results of operations. The following table sets forth, for the periods indicated, our working capital: June 30, December 31, 2026 2025 (Dollars in thousands) Cash and cash equivalents $ 350,809 $ 277,975 Accounts receivable, net of allowance for doubtful accounts 65,383 63,762 Inventories, net 86,734 76,766 Prepaid expenses 7,744 9,807 Other current assets 6,396 7,404 Accounts payable (36,817) (42,429) Accrued expenses (44,116) (31,610) Current operating lease liabilities (2,189) (2,241) Current finance lease liabilities (2,397) (2,315) Total Working Capital $ 431,547 $ 357,119 Working capital consists of current assets net of current liabilities. Working capital increased $74.4 million to $431.5 million as of June 30, 2026 compared to working capital of $357.1 million as of December 31, 2025. The increase was primarily a result of an increase of $72.8 million in cash and cash equivalents, primarily as a result of the proceeds from the sale of our equity investment, an increase of $10.0 million in inventories, net, an increase of $1.6 million in accounts receivable, and a decrease of $5.6 million in accounts payable. The increase was partially offset by a decrease of $2.1 million in prepaid expenses, a decrease of $1.0 million in other current assets, and an increase of $12.5 million in accrued expenses as a result of timing. We normally carry three to five weeks of finished goods inventory and less than 30 days of accounts receivable. As of June 30, 2026, our capital resources consisted primarily of $350.8 million of cash and cash equivalents on hand. As of December 31, 2025, our capital resources consisted primarily of $278.0 million of cash and cash equivalents on hand. We expect to fund our ongoing operations and obligations with cash and cash equivalents and cash flow from operations. 34 Table of Contents The following table sets forth, for the periods indicated, our beginning balance of cash, net cash flows provided by (used in) operating, investing and financing activities and our ending balance of cash: Six Months Ended June 30, 2026 2025 (Dollars in thousands) Cash at the beginning of period $ 277,975 $ 268,633 Net cash provided by operating activities 84,754 38,693 Net cash provided by (used in) investing activities 42,674 (59,932) Net cash used in financing activities (54,594) (3,710) Cash at the end of period $ 350,809 $ 243,684 Net Cash Provided by Operating Activities Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items (i.e., provision for loss on accounts receivable, loss on disposal of property, plant and equipment, share-based compensation, change in deferred income taxes, depreciation and amortization, amortization of deferred financing costs, change in operating lease right of use asset, and gain on equity investment). 2026 Net cash provided by operating activities of $84.8 million for the six months ended June 30, 2026 was primarily attributed to: •$91.4 million of net income, adjusted for reconciling non-cash items, which excludes $23.4 million of non-cash items related to $21.5 million of deferred income tax expense, $50.0 million of depreciation and amortization, $15.5 million of share-based compensation, $1.1 million of amortization of deferred financing costs, $0.2 million of loss on disposal of property, plant and equipment, and $1.6 million of change in operating lease right of use asset, partially offset by $66.6 million of gain on equity investment. This was partially offset by: •a $6.6 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the change in accounts receivable, inventories, other assets, accounts payable, and operating lease liability, partially offset by the changes in accrued expenses and prepaid expenses and other current assets. 2025 Net cash provided by operating activities of $38.7 million for the six months ended June 30, 2025 was primarily attributed to: •$75.6 million of net income, adjusted for reconciling non-cash items, which excludes $72.0 million of non-cash items related to $42.4 million of depreciation and amortization, $11.5 million of provision for loss on accounts receivable, $15.0 million of share-based compensation, $1.1 million of amortization of deferred financing costs, $1.2 million of loss on disposal of property, plant and equipment, and $0.7 million of change in operating lease right of use asset. This was partially offset by: •a $36.9 million decrease due to changes in operating assets and liabilities. The decrease was primarily due to the changes in accrued expenses, inventories, accounts receivable, prepaid expenses and other current assets, and other assets, partially offset by the change in accounts payable. 35 Table of Contents Net Cash Provided by (Used in) Investing Activities 2026 Net cash provided by investing activities of $42.7 million for the six months ended June 30, 2026 was primarily attributed to: •$100.0 million of cash proceeds from the sale of our equity investment. This was partially offset by: •$57.3 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend. 2025 Net cash used in investing activities of $59.9 million for the six months ended June 30, 2025 was primarily attributed to: •$59.9 million of capital expenditures related to Freshpet Kitchens, plant recurring capital expenditures, expenditures relating to investment in fridges, and other capital spend. Net Cash Used in Financing Activities 2026 Net cash used in financing activities of $54.6 million for the six months ended June 30, 2026, was primarily attributed to: •$54.4 million for share repurchases, inclusive of broker fees; •$4.6 million for tax withholdings related to net share settlements of restricted stock units; and •$1.6 million for principal payments under finance lease obligations. This was partially offset by: •$6.0 million cash proceeds from the exercise of stock options. 2025 Net cash used in financing activities of $3.7 million for the six months ended June 30, 2025 was primarily attributed to: •$2.9 million for tax withholdings related to net share settlements of restricted stock units; and •$1.0 million for principal payments under finance lease obligations. This was partially offset by: •$0.2 million cash proceeds from the exercise of stock options. Indebtedness For a discussion of our material indebtedness, see Note 6 to our (unaudited) condensed consolidated financial statements included in this report. Contractual Obligations There were no material changes to our commitments under contractual obligations, as disclosed in our Annual Report, except as noted in Note 8 - Leases and Note 12 - Commitments and Contingencies to our (unaudited) condensed consolidated financial statements. 36 Table of Contents Critical Accounting Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the revenue and expenses incurred during the reported periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions. There have been no material changes to our critical accounting estimates as compared to the critical accounting policies and estimates described in our Annual Report. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements: See Note 1 - Summary of Significant Accounting Policies of our (unaudited) condensed consolidated financial statements for additional information. Standards Effective in Future Years: We consider the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed herein were assessed and determined to be either not applicable or are expected to have minimal impact to our consolidated financial statements.