10-Q · May 15, 2026
Local Bounti Corporation reported a Q1 2026 revenue of $13.3 million, representing a 15% increase year-over-year, although a decrease from $19.0 million sequentially. The company improved its diluted EPS to -$0.53 from…
Earnings analysis · 10-Q
LOCL earnings analysis
Filed August 12, 2026 · Our reading of the company's report
The latest report
Local Bounti delivered 14% year-over-year Q2 sales growth to $13.85 million and reduced operating expenses and net loss, but gross margin deteriorated to approximately 7.6% from 12.2% a year earlier. Liquidity remains…
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Local Bounti delivered 14% year-over-year Q2 sales growth to $13.85 million and reduced operating expenses and net loss, but gross margin deteriorated to approximately 7.6% from 12.2% a year earlier. Liquidity remains constrained, with $10.1 million of cash and restricted cash, $13.437 million of six-month operating cash burn, and $302.8 million of Senior Facility principal outstanding. Retail distribution and product pilots provide growth opportunities, but covenant risk, leverage, persistent losses, and the new lettuce-demand risk support a bearish assessment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.68
- Segment
- No separately reported operating segments; management attributes the $13.85 million of Q2 2026 sales growth primarily to increased production and sales from Georgia, Texas, and Washington facilities.
What stood out
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Revenue Growth Continued
Q2 2026 sales increased 14% year over year to $13.85 million from $12.103 million, and increased approximately 6% sequentially from roughly $13 million in Q1 2026. Management attributed the year-over-year increase to higher production and sales from Georgia, Texas, and Washington.
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Operating Expense Reduction
Operating expenses declined 11% year over year to $14.994 million from $16.922 million, led by a $1.908 million, or 29%, reduction in research and development expenses and a $0.504 million reduction in general and administrative expenses.
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Losses Narrowed Year Over Year
The operating loss improved 10% year over year to $13.948 million from $15.450 million, while net loss improved 8% to $19.821 million from $21.577 million. Diluted EPS was negative $0.68 versus negative $1.63 in Q2 2025.
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Retail Distribution Expanded
Management reported distribution across approximately 13,000 retail locations in 35 states, including new partners launched in July across approximately 66 stores and in August across approximately 110 stores.
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New Product Growth Initiatives
The company agreed to pilot its relaunched Single Serve Salad Kit line in approximately 400 Mid-Atlantic stores in fall 2026. The Romano Caesar Salad Kit also launched in an additional distribution center in May 2026 after a reported 75% increase in baseline velocity in Q4 2025.
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Capital Spending Moderated
Net cash used in investing activities fell to $2.154 million in the first six months of 2026 from $10.884 million in the prior-year period, reflecting lower spending on construction materials, services, and equipment for the Washington and Texas facilities.
What to watch
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Gross Margin Compression
Gross margin fell to approximately 7.6% in Q2 2026 from 12.2% in Q2 2025 and 11.5% in Q1 2026, as cost of goods sold increased 20% year over year to $12.804 million, outpacing the 14% sales increase. The operating margin remained deeply negative at approximately negative 100.7%.
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Liquidity and Leverage Pressure
The company had cash and cash equivalents plus restricted cash of only $10.1 million at June 30, 2026, against $302.8 million of Cargill Senior Facility principal and an accumulated deficit of $550.1 million. Management states it has incurred losses and generated negative operating cash flow since inception.
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Persistent Cash Burn
Operating cash flow remained negative at $13.437 million for the six months ended June 30, 2026, despite a $32.539 million net loss. The company also states that 50% of free cash flow generated beginning in the fourth quarter of 2027 must be used for Senior Facility principal repayment.
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Covenant Default Risk
The August 2026 Cargill agreement waived a minimum-liquidity default and reset the minimum liquidity requirement to $3.5 million through March 31, 2027 and $2.0 million thereafter. Noncompliance with debt covenants could trigger default and acceleration of a substantial portion of indebtedness.
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Cyclospora Demand Headwind
The filing identifies a new Cyclospora-related risk: although Local Bounti products were not affected, customer and consumer concern following a multistate outbreak linked to iceberg lettuce could reduce purchases of lettuce and other produce and materially harm results. The filing states the investigation began in May 2026 and a large producer initiated a recall in July 2026.
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PIK Interest and Dilution
Management expects no cash interest payments within the next 12 months only because it expects to elect payment-in-kind treatment for specified quarters. Future quarterly cash interest payments are estimated at approximately $1.5 million, while the August 2026 financing added $12.5 million of debt and a warrant for 1,000,000 shares.
Management's outlook
No explicit numeric revenue or EPS guidance was provided. Management expects a Single Serve Salad Kit pilot in approximately 400 Mid-Atlantic stores in fall 2026, expects California facility investments to improve yields by as much as 20%, and estimates future quarterly cash interest payments at approximately $1.5 million.
Earlier filings 4
10-K · March 27, 2026
Local Bounti (LOCL) presents a strategy focused on its patented Stack & Flow Technology, modular distributed facilities and unit-economics improvements while operating five facilities and selling into ~13,000 retail…
10-K · March 31, 2025
Local Bounti positions itself as a technology-driven CEA operator focused on unit economics via its patented Stack & Flow Technology®, operating six facilities and distributing to approximately 13,000 retail locations…
10-Q · November 14, 2024
Local Bounti reported Q3 sales of $10,242,000 (up from $6,810,000 a year ago) with gross profit of $1,413,000 (gross margin 13.8%). Loss from operations was $(18,031,000) and net loss was $(34,327,000), producing…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.