Segment Information:

The Company operates in one consolidated operating and reportable segment: the manufacturing, marketing and distribution of fresh dog food, cat food, and dog treats (collectively, "fresh pet food products"). The Company's chief operating decision maker ("CODM"), who is the Company's Chief Executive Officer, reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The segment derives revenues from the sale of fresh pet food products to retailers, through direct sales and distributor arrangements. Revenue from transactions with external customers for each of our fresh pet food products would be impracticable to disclose and management, including the CODM, does not view its business by product line. Although the CODM does not review such information on a regular basis, refer to Note 1 – Summary of Significant Accounting Policies for information about the Company's net sales by class of retailer.

The CODM measures performance for the segment primarily based on net income (loss). The CODM uses net income (loss) to evaluate operating performance and the execution of capacity expansion plans to drive greater capital efficiency.

The measure of segment assets is reported as total assets on the Consolidated Balance Sheet, and total capital expenditures for additions to long-lived assets were $148,184, $187,092, and $239,093, for the periods ending December 31, 2025, 2024, and 2023, respectively.

Financial information, including segment revenue, significant segment expenses, and profit or loss for each of the three most recent fiscal years is presented in the table below:


	Year Ended December 31,
	2025		2024		2023
Net sales	$	1,102,015	$	975,177	$	766,895
Input costs (a)	(319,572)		(289,642)		(261,511)
Quality costs (b)	(23,100)		(25,103)		(31,443)
Logistics costs (c)	(63,920)		(58,424)		(57,517)
Media costs (d)	(140,483)		(111,269)		(85,483)
Plant costs and other costs of goods sold (e)	(241,354)		(206,177)		(171,020)
Other segment selling, general and administrative items (f)	(132,098)		(121,884)		(107,754)
Depreciation and amortization	(89,721)		(73,615)		(58,517)
Share-based compensation	(13,883)		(49,780)		(19,775)
Loss on disposals of equipment	(2,212)		(1,284)		(4,321)
Interest and other income, net	9,221		11,868		13,029
Interest expense	(14,120)		(12,262)		(14,097)
Gain on equity investment	—		9,918		—
Income tax benefit (expense)	68,364		(598)		(210)
Loss on equity method investment	—		—		(1,890)
Consolidated net income (loss)	$	139,137	$	46,925	$	(33,614)

(a) Input costs include expenses related to the procurement of raw materials and packaging materials used in the production of finished goods.

(b) Quality costs include expenses related to quality control processes in place over the production of our dog and cat food products. This includes high pressure processing costs, which is a food preservation method that uses high pressure and cold water to inactivate pathogens and extend shelf life.

(c) Logistics costs include expenses related to the transportation of finished goods from production facilities to our customers and certain warehousing costs.

(d) Media costs include expenses related to advertising through media outlets.

(e) Plant costs and other cost of goods sold items include plant employee costs and administrative expenses directly related to the cost of goods sold.

(f) Other segment selling, general and administrative items include employee costs, chiller expenses, and other administrative selling expenses.

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Freshpet, Inc. Segments Disclosure

About Segments Disclosures

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