Local Bounti (NYSE:LOCL) reported continued operating and financial improvement in the first quarter of 2026, with management pointing to higher revenue, lower overhead costs and increased production consistency across its greenhouse network.
On the company’s earnings call, President and Chief Executive Officer Kathleen Valiasek said the quarter represented “continued progress” after work completed in 2025 to strengthen the business. Revenue rose 15% year over year, adjusted EBITDA loss improved 35%, and adjusted general and administrative expenses declined 30%, she said.
Revenue Grows as Facilities Run at Full Capacity
Interim Chief Financial Officer and Chief Accounting Officer Tony Hughes said first-quarter revenue increased to $13.3 million, up 15% from the prior-year period. Revenue also rose approximately 7% sequentially from the fourth quarter, which Hughes said reflected “underlying production consistency” across the company’s full network of facilities.
Valiasek said Local Bounti’s three state-of-the-art facilities continue to operate at full harvestable capacity, with the company’s full run-rate capacity committed to customers. She characterized the company’s progress around two themes: commercial momentum and operational discipline at scale.
The company’s adjusted gross margin was approximately 29% in the quarter, excluding depreciation, stock-based compensation and other non-core items. Hughes said that was in line with the prior-year period and consistent with the margin profile delivered throughout 2025.
Adjusted G&A expense fell to $4.1 million from $5.8 million in both the first quarter of 2025 and the fourth quarter. Hughes said the company is now seeing the full benefit of roughly $10 million in annualized expense reductions delivered in 2025.
Adjusted EBITDA loss improved to $5.7 million, compared with a loss of $8.8 million in the prior-year quarter. GAAP net loss narrowed to $12.7 million from $37.7 million a year earlier. Hughes attributed the improvement to lower interest expense following the company’s 2025 debt restructuring and to ongoing operational progress.
Retail Distribution and Product Momentum Continue
Valiasek said Local Bounti’s strategic partnership discussions remain active and are central to its long-term growth strategy. She said retailers and strategic partners that had previously been cautious about controlled environment agriculture are increasingly designing supply chains that include CEA as permanent infrastructure.
The CEO said two new retail accounts announced last quarter have now launched. One is a six-SKU placement with a large premier retail customer covering more than 250 stores, while the other is a large regional retailer.
Local Bounti also received new bids in the first and early second quarter covering supply arrangements through the first quarter of 2027. Valiasek said those commitments include key product lines such as baby leaf lettuce and organic butter lettuce.
The company also highlighted its Caesar Romano Salad Kit, which Valiasek said continued to gain traction with consumers after posting a 75% increase in baseline velocity, measured in units sold per store per week, during the fourth quarter of 2025. Local Bounti was awarded an additional distribution center with a national retail customer in the first quarter, with the launch set for this month.
Valiasek also pointed to opportunities in baby leaf greens, particularly arugula. She said retail customers continue to report unreliable conventional arugula supply and unmet customer demand, creating an opportunity for Local Bounti to use its Stack & Flow capabilities to provide a more reliable, longer-lasting, ready-to-eat greenhouse-grown arugula supply.
Technology Investments Drive Yield Gains
Executive Chairman Craig Hurlbert said two developments during the quarter underscored the company’s direction: progress in ProTechs, the proprietary technology supporting Local Bounti’s Stack & Flow platform, and the closing of a $15 million investment from an existing strategic investor.
Valiasek said the company’s operational improvements are compounding as facilities run at full capacity. She cited progress in service performance, freight lane management, packaging standardization and labor efficiencies.
She said yields remain at the highest levels in the company’s history. Tower upgrades completed across Georgia, Texas and Washington, combined with computer vision and AI-driven growing optimization, are delivering “approximately a 10% increase in run rate yield capacity,” according to Valiasek.
The company is also making selective investments in its California facilities to improve efficiency in legacy assets as it seeks to expand its No. 1 market position in living butterhead lettuce. Valiasek said those investments could improve yields by as much as 20%, resulting in increased throughput and enhanced margins as projects progress through the year.
Capital Structure Provides Flexibility
Hurlbert said the $15 million investment from an existing strategic investor was a significant signal because the partner has followed the business closely for years and chose to commit additional capital at this stage.
Hughes reviewed a series of balance sheet actions taken over the past year. In the first quarter of 2025, Local Bounti completed a $25 million equity raise and a comprehensive debt restructuring that canceled approximately $197 million of debt principal and accrued interest while deferring cash repayments until April 2027.
In the third quarter of 2025, the company secured an additional $10 million of working capital through a convertible note investment, paired with a $10 million reduction in senior secured debt principal. Hughes also noted additional financing through an equipment sale-leaseback arrangement, followed by the $15 million convertible note investment in the first quarter of 2026.
Hughes said these transactions give Local Bounti “financial flexibility to be strategic about growth and partnership decisions” as it works toward profitability.
Management Sees Continued Progress Toward Positive Adjusted EBITDA
Local Bounti did not provide specific full-year guidance on the call, but Hughes said management expects the improvement shown throughout 2025 and into the first quarter of 2026 to continue. He said revenue growth, stable gross margins and declining G&A expenses support progress toward the company’s goal of achieving positive adjusted EBITDA.
“There’s still work to do to get there, and we want to be clear-eyed about that, but everything we’re seeing reinforces our confidence in the path,” Hughes said.
Valiasek closed the call by saying the strategic and commercial environment remains favorable, the company’s operational rhythm is compounding, and its financial trajectory continues to move in the right direction.
About Local Bounti (NYSE:LOCL)
Local Bounti Inc is a technology-driven indoor farming company that cultivates non-GMO leafy greens, microgreens and culinary herbs in controlled environment agriculture (CEA) facilities. By leveraging its proprietary Hybrid Growing System, the company maintains precise control over lighting, temperature and nutrient delivery, enabling year-round production of high-quality produce free from pesticides and seasonality constraints.
Headquartered in Montana, Local Bounti operates multiple cultivation centers across the United States, each designed to maximize water efficiency and minimize land use.
