REAL CASE 025

Oatly Revenue +15.2% and Adjusted EBITDA Turns Positive: Why Isn’t the Turnaround Complete?

If a global consumer brand returns to double-digit growth, has its turnaround succeeded? For Oatly in Q2 2026, the answer is: Not yet. Quarterly revenue reached $240.1 million. It increased 15.2%. Constant-currency growth was 12.7%. Volume increased 11.2% to 156.1 million liters. That matters because growth was not merely an FX effect. More physical product was sold. Gross margin reached 33.9%. It improved 1.4 percentage points year over year. Adjusted EBITDA improved from a $3.6 million loss to positive $0.4 million. These are meaningful improvements. But the same quarter still produced a $31.3 million net loss attributable to shareholders. A year earlier, the loss was $55.9 million. The loss narrowed substantially. It did not disappear. Therefore, Case 025 cannot simply say: Oatly is profitable. The accurate statement is: Adjusted EBITDA turned slightly positive. GAAP net income remained negative. That is Mixed. To understand why, return to the 2021 IPO. The story was powerful. Plant-based. Sustainability. Global expansion. Oat milk replacing dairy. Barista products entering coffee shops. But Oatly is not a software company. Beverages must be produced. Packaged. Transported. Stored. Distributed. When demand grows rapidly, insufficient capacity limits sales. When demand underperforms, excess capacity becomes a burden. The post-IPO problem was therefore not that the brand suddenly disappeared. The problem was that growth assumptions, capacity, and costs did not fully match. From 2022 through 2024, management changed priorities. Less emphasis on expansion at any cost. More emphasis on: Supply-chain simplification. Expense control. Capacity utilization. Gross margin. Productive markets. Capital discipline. In 2025, revenue was $862.5 million, up 4.7%. Constant-currency growth was only 2.2%. That was far below the growth imagined around the IPO. But the operating base improved. Q2 2026 then produced a more balanced combination: Double-digit revenue growth. Double-digit volume growth. Higher gross margin. Slightly positive adjusted EBITDA. A smaller net loss. Management therefore raised 2026 constant-currency revenue-growth guidance from 3%–5% to 8%–10%. But it did not restart aggressive capital expansion. Adjusted EBITDA guidance remained $25–$35 million. Capital expenditure guidance remained $20–$30 million. That distinction matters. Oatly is trying to prove that renewed growth does not require recreating the 2021 expansion model. The company wants to grow from a more rational cost and capacity base. Regional differences also remain important. In 2025: Europe & International revenue was $482.9 million, +11.2%. North America was $249.6 million, -9.1%. Greater China was $130.0 million, +13.1%. North America was affected by reduced purchases from a large foodservice customer. A global brand therefore does not mean every region grows together. Customer concentration can materially affect regional performance. Oatly's most important progress is not simply continued brand awareness. Volume, gross margin, and adjusted profitability are improving together. The largest unfinished task is equally clear: GAAP profitability. Cash economics. Sustained capacity efficiency. That is why the Outcome remains Mixed. Oatly has moved materially beyond the worst mismatch between IPO ambition and manufacturing economics. But it has not yet completed the final transition from a famous consumer brand into a consistently profitable manufacturing business.

SwedenFood / Food & Beverages / Plant-Based Drinks / Oat MilkMixedWhy Oatly did not return to aggressive factory expansion after its post-IPO growth slowdown, but instead right-sized its supply chain and expenses, improved capacity utilization and gross margin, and reinvested selectively in productive markets; and why Q2 2026 revenue growth of 15.2%, volume growth of 11.2%, a 33.9% gross margin, and slightly positive adjusted EBITDA still do not justify a Success classification while GAAP net loss remains $31.3 million.

BEFORE

At the time of the 2021 IPO, Oatly's central story was rapid globalization of plant-based beverages. Brand awareness and Barista products supported demand, and the company invested in production capacity for high growth. But beverages require factories, logistics, and inventory. When actual demand and execution fell below the original trajectory, underutilized capacity and a heavy cost structure became burdens. Consumers could still like Oatly while the manufacturing economics remained weak.Number

AFTER

In Q2 2026, revenue reached $240.1 million, up 15.2%, or 12.7% in constant currency. Volume increased 11.2% to 156.1 million liters. Gross margin reached 33.9%, up 1.4 percentage points. Net loss narrowed to $31.3 million from $55.9 million a year earlier, while adjusted EBITDA improved from negative $3.6 million to positive $0.4 million. Management raised 2026 constant-currency revenue-growth guidance to 8%–10% while maintaining adjusted EBITDA guidance of $25–$35 million and capital expenditure guidance of $20–$30 million. Improvement is clear, but full-year guidance has not been achieved and GAAP profitability remains incomplete.Number

OUTCOME

MixedCase Result

MODEL

Oatly sells oat-based beverages through retail and foodservice channels, with Barista products helping the brand enter mainstream coffee occasions. Revenue comes from physical products, so the economic chain includes ingredients, production, packaging, transportation, distribution, promotions, and brand investment. Unlike software, beverage growth requires real production capacity; when demand falls below expectations, excess capacity can reduce utilization and margins. In 2025, Europe & International generated $482.9 million of revenue, North America $249.6 million, and Greater China $130.0 million, showing materially different regional trajectories. Oatly therefore must be evaluated through volume, gross margin, capacity utilization, adjusted EBITDA, net losses, and capital expenditure—not brand awareness or revenue alone.Business Model

Read the Case

# [SECTION

background] Before 2020: Beneath the Brand Story Is a Manufacturing Business

Oatly originated in Sweden.

Its core product idea was turning oats into a beverage that could replace dairy milk.

Barista products helped oat milk enter coffee shops and mainstream consumption.

The brand emphasized plant-based consumption and sustainability.

But the financial structure remained manufacturing.

Demand growth requires production capacity.

Products require packaging, logistics, and inventory.

Growth therefore depends not only on whether consumers like the brand.

Factories must also operate efficiently.

The central pre-2020 assumption was:

Consumer adoption would be strong enough to support large production and global distribution investments.

# [SECTION

timeline] 2020-2026: From Expansion First to Utilization and Margin

In 2020, plant-based beverage demand continued expanding and production capacity became increasingly important.

In 2021, Oatly went public in the United States and the high-growth global expansion narrative peaked.

In 2022, supply-chain complexity, inflation, capacity ramp-up, and changing capital markets increased pressure on loss-making expansion.

In 2023, management placed greater emphasis on costs, supply-chain simplification, and gross margin.

In 2024, restructuring and market prioritization continued.

In 2025, revenue reached $862.5 million, up 4.7%, or 2.2% in constant currency.

In Q2 2026:

Revenue +15.2%.

Constant currency +12.7%.

Volume +11.2%.

Gross margin 33.9%.

Adjusted EBITDA slightly positive.

Growth accelerated again, but the expansion model was more disciplined than during the IPO period.

# [SECTION

problem_opportunity] Problem and Opportunity: Brand Growth Must Match Capacity and Costs

The central post-IPO problem was capacity mismatch.

Oatly had built and contracted production capacity for very rapid growth.

Actual demand and execution did not fully follow that trajectory.

Underutilized capacity and overhead became burdens.

This demonstrates a basic manufacturing reality:

Consumers can continue liking Oatly.

The company can still lose money.

The opportunity is to realign three variables:

Demand.

Capacity.

Cost structure.

If volume recovers while capacity utilization and gross margin improve, Oatly can turn a global brand into a more sustainable manufacturing business.

# [SECTION

business_model] Business Model: Revenue Growth Must Pass the Gross-Margin Test

Oatly sells physical beverages through retail and foodservice.

Its economic chain includes:

Ingredients.

Production.

Packaging.

Logistics.

Distribution.

Promotions.

Brand investment.

Gross margin is therefore critical.

Revenue growth does not automatically create value.

If low utilization, logistics, and promotions consume margin, growth can still produce losses.

Regional mix also matters.

Europe & International is the largest revenue region.

North America and Greater China follow different trajectories.

Reduced purchasing by one large North American foodservice customer materially affected the region, demonstrating real customer-concentration risk.

# [SECTION

execution] Execution: Return to Growth Without Returning to Large-Scale Capacity Expansion

Oatly shifted from "expansion first" toward more disciplined growth.

The company optimized its supply chain.

Reduced expenses.

Improved the match between capacity and demand.

Reinvested in productive markets.

Europe & International continued growing.

North America worked to rebuild momentum after lower purchases from a major foodservice customer.

Greater China continued generating volume growth.

Capital expenditure remained restrained.

2026 Capex guidance was only $20–$30 million.

The strategy is therefore not another major factory-building cycle.

It is to extract more productivity from the existing network.

# [SECTION

turning_points] Turning Point: Growth Returns Without Relaxing Capital Discipline

The first Turning Point was the 2021 IPO.

Growth expectations and capital investment reached their peak.

The second came in 2022–2023.

Capacity, demand, and cost mismatches became visible, shifting priorities from expansion toward utilization and margin.

The third was the improved operating foundation in 2025.

The fourth arrived in Q2 2026.

Revenue grew 15.2%.

Volume grew 11.2%.

Gross margin reached 33.9%.

Adjusted EBITDA turned slightly positive.

Management raised revenue-growth guidance without increasing Capex guidance.

The real Turning Point is:

Oatly began regaining growth without returning to the capital-heavy expansion logic of 2021.

Oatly's most important Q2 2026 change was not simply 15.2% revenue growth. Volume increased 11.2%, gross margin reached 33.9%, and adjusted EBITDA improved from negative $3.6 million to positive $0.4 million. But the quarter still produced a $31.3 million net loss, so the growth repair is real while the profitability turnaround remains incomplete.

Full Analysis

Case 025 has four major Turning Points. The first was the 2021 IPO. Brand expectations, growth ambitions, and capital investment reached a peak. The second came in 2022–2023. Supply-chain complexity, inflation, and capacity-utilization problems exposed the weakness of expansion-first economics. Management shifted toward utilization and gross margin. The third came in 2025. Revenue grew 4.7%, or only 2.2% in constant currency, but the operating foundation improved. The fourth came in Q2 2026. Revenue +15.2%. Volume +11.2%. Gross margin 33.9%. Adjusted EBITDA +$0.4 million. Management raised revenue-growth guidance while keeping Capex restrained. The real Turning Point is: Oatly began growing faster again without returning to the capital-heavy expansion model of 2021.

Turning Point

Before vs After

BEFORE

Oatly originated in Sweden around a scientific and consumer proposition: oats could be turned into a dairy substitute suitable for coffee, breakfast and other everyday uses. The brand gained particular traction in specialty coffee, where the Barista product helped establish oat milk as a credible alternative to dairy. The business combined brand marketing with manufacturing. That distinction is important. A software company can scale demand without building factories; a beverage company cannot. If demand grows rapidly, production capacity becomes a constraint. If demand later slows, the same capacity can become a burden. Before 2020 Oatly had already expanded internationally and built strong awareness in Europe, North America and China. The strategic promise was that consumer adoption would justify large investments in production and distribution. **2020:** Demand for plant-based beverages continued to expand, and Oatly prepared for a larger global footprint. Capacity and supply became central strategic questions. **2021:** Oatly completed its U.S. IPO during a period of strong investor appetite for high-growth consumer and sustainability stories. The valuation and expansion plan assumed continued rapid category growth. **2022:** Supply-chain complexity, inflation, production ramp challenges and changing capital-market conditions reduced tolerance for losses. The company had to confront the gap between brand momentum and plant economics. **2023:** Management increasingly focused on cost structure, supply-chain simplification and improving gross margin. The strategic objective shifted from maximizing installed capacity to improving utilization and cash discipline. **2024:** Oatly continued restructuring and prioritizing markets. The growth profile was slower than the IPO narrative, but the company worked toward better gross margin and reduced losses. **2025:** Revenue increased 4.7% to $862.5 million. Europe & International revenue reached about $482.9 million, North America about $249.6 million and Greater China about $130.0 million. Management described the year as a milestone in profitable growth on an adjusted basis after several years of right-sizing supply and overhead. **Q1–Q2 2026:** Growth accelerated. Q2 revenue reached $240.1 million, up 15.2%, and volume increased 11.2%. Gross margin improved to 33.9%. Adjusted EBITDA turned slightly positive in Q2. Management raised constant-currency revenue growth guidance to 8%–10% for the full year.

AFTER

For 2025, Oatly reported revenue of $862.5 million, up 4.7% from $823.7 million. Excluding a $21.0 million currency tailwind, constant-currency revenue growth was 2.2%. Europe & International revenue increased 11.2% to $482.9 million. North America revenue declined 9.1% to $249.6 million. Greater China revenue increased 13.1% to $130.0 million. In Q2 2026, revenue increased 15.2% to $240.1 million. Constant-currency revenue increased 12.7%. Sold volume increased 11.2% to 156.1 million liters. Gross margin was 33.9%, up 1.4 percentage points. Net loss attributable to shareholders narrowed to $31.3 million from $55.9 million. Adjusted EBITDA was positive $0.4 million compared with a $3.6 million loss in the prior-year quarter. This is an important improvement but should not be confused with full GAAP profitability. Management raised full-year constant-currency revenue growth guidance to 8%–10% from 3%–5%, while maintaining adjusted EBITDA guidance of $25–$35 million and capex guidance of $20–$30 million. The first risk is category competition. Plant-based beverages compete with dairy, other plant bases and private-label alternatives. Consumer enthusiasm for the category can change. The second risk is customer concentration. A large foodservice customer's sourcing decision had a meaningful effect on North America in 2025. The third risk is manufacturing utilization. A product business with factories remains sensitive to volume, efficiency and logistics. The fourth risk is the gap between adjusted metrics and GAAP profitability. Q2 adjusted EBITDA was slightly positive, but the company still reported a substantial net loss. The fifth risk is geography. Europe, North America and Greater China have different competitive and channel dynamics. Improvement in one region can be offset by weakness in another. This case stops at September 12, 2026. It does not assume that raised guidance was ultimately achieved.

GoGoUp Five Powers

Discover

5/5

★★★★★

Analyze

5/5

★★★★★

Execute

4/5

★★★★☆

Decide

5/5

★★★★★

Create

5/5

★★★★★

Discover5/5

Oatly identified a genuine category opportunity: Oats could move from a niche dairy alternative into mainstream coffee and retail consumption. Barista products were particularly important. They placed oat milk inside everyday coffee occasions and helped build consumer habits. That discovery materially influenced the plant-based beverage category. The post-IPO problem was not product discovery. It was converting category innovation into sustainable manufacturing economics. Therefore, Discover receives 5.

Analyze5/5

Oatly's most important analytical shift was moving beyond revenue growth. A manufacturing consumer brand must examine: Volume. Gross margin. Capacity utilization. Supply-chain costs. Adjusted EBITDA. GAAP net loss. Capital expenditure. Q2 2026 illustrates why. Revenue +15.2%. Volume +11.2%. Gross margin 33.9%. Adjusted EBITDA +$0.4 million. Net loss $31.3 million. Looking only at revenue would overstate the turnaround. Looking only at the net loss would ignore genuine operating improvement. The metrics must remain together. Therefore, Analyze receives 5.

Execute4/5

Oatly has executed several repairs. Supply-chain optimization. Expense reduction. Better matching of capacity and demand. Regional and channel adjustments. Controlled capital spending. Selective reinvestment. Q2 revenue, volume, and gross margin all improved. That shows execution is producing results. But Execute does not receive 5. GAAP profitability remains incomplete. Adjusted EBITDA was only positive $0.4 million. Net loss remained $31.3 million. The repair is working, but it is not finished. Therefore, Execute receives 4.

Decide5/5

Oatly chose B. A would mean leaving manufacturing and becoming mainly a licensing company. That did not happen. C would mean abandoning oat beverages. That did not happen. D would mean returning to aggressive 2021-style capacity expansion. That also did not happen. Oatly retained its core products while right-sizing costs and supply chain, then resumed growth from a more disciplined base. Revenue-growth guidance increased. Capex remained only $20–$30 million. Growth and capital discipline therefore coexist. Decide receives 5.

Create5/5

Oatly's long-term creation was bringing oat beverages from a niche alternative into mainstream consumption. Barista products were especially important because they connected oat milk with coffee-shop behavior. This created a combination of: Product. Brand. Consumption occasion. But creating a category and creating sustainable profit are different achievements. Oatly has already demonstrated the first. It is still proving the second. Because the product and brand innovation achieved global influence, Create receives 5.

Key Takeaway
Oatly shows: A consumer-brand story must eventually pass a manufacturing-economics test. In Q2 2026: Revenue was $240.1 million, +15.2%. Constant-currency growth was +12.7%. Volume was 156.1 million liters, +11.2%. Gross margin was 33.9%, up 1.4 percentage points. Adjusted EBITDA improved from -$3.6 million to +$0.4 million. Net loss narrowed from $55.9 million to $31.3 million. These figures must remain together. The transferable rule is: Brand growth becomes durable only when demand, capacity, and cost structure align. Positive adjusted EBITDA is an important milestone. It is not GAAP profitability. As of September 12, 2026, Oatly's growth and operating repair were clearly progressing, but final profitability had not been proven. The Outcome remains Mixed.

Evidence / Sources

Public Evidence 1: Source / Author: Oatly Group AB Material: Q2 2026 financial results, July 22, 2026 Facts supported: Revenue $240.1 million, +15.2%. Constant-currency growth +12.7%. Volume 156.1 million liters, +11.2%. Gross margin 33.9%, up 1.4 percentage points. Net loss $31.3 million versus $55.9 million a year earlier. Adjusted EBITDA +$0.4 million versus -$3.6 million. These figures support the conclusion that growth, volume, and margins improved while GAAP profitability remained incomplete. Public Evidence 2: Source / Author: Oatly Group AB Material: Q4 and full-year 2025 financial results, February 11, 2026 Facts supported: 2025 revenue $862.5 million, +4.7%. Constant-currency growth +2.2%. Europe & International revenue $482.9 million, +11.2%. North America revenue $249.6 million, -9.1%. Greater China revenue $130.0 million, +13.1%. These figures support materially different regional growth trajectories. Public Evidence 3: Source / Author: Oatly Group AB Material: Updated 2026 guidance following Q2 Facts supported: Constant-currency revenue-growth guidance raised from 3%–5% to 8%–10%. Adjusted EBITDA guidance maintained at $25–$35 million. Capital expenditure guidance maintained at $20–$30 million. These figures support the conclusion that Oatly is returning to growth without restarting aggressive capacity expansion. Public Evidence 4: Source / Author: Oatly Group AB Material: 2025 Annual Report / Form 20-F and investor materials available through September 12, 2026 Facts supported: Oatly continued optimizing supply chain, expenses, regional mix, and capacity utilization while retaining its core oat-beverage business. Internal Verification Notes: Research cutoff date: September 12, 2026. 2025 revenue: $862.5 million, +4.7%. Constant-currency growth: +2.2%. Q2 2026 revenue: $240.1 million, +15.2%. Constant-currency growth: +12.7%. Volume: 156.1 million liters, +11.2%. Gross margin: 33.9%, +1.4 percentage points. Net loss: $31.3 million. Prior-year net loss: $55.9 million. Adjusted EBITDA: +$0.4 million. Prior-year adjusted EBITDA: -$3.6 million. Latest 2026 constant-currency revenue-growth guidance: 8%–10%. Adjusted EBITDA guidance: $25–$35 million. Capex guidance: $20–$30 million. Do not describe +12.7% constant-currency growth as reported revenue growth. Do not describe +11.2% volume growth as revenue growth. Do not describe +$0.4 million adjusted EBITDA as GAAP net income. Do not remove the $31.3 million net loss. Do not describe 2026 guidance as completed full-year results. Do not claim Oatly exited the oat-beverage business. Do not claim Oatly stopped manufacturing and became a licensing-only company. Do not claim Oatly returned to the aggressive factory-expansion pace of 2021. Mixed means: Revenue and volume growth accelerated. Gross margin improved. Adjusted EBITDA turned slightly positive. Net loss narrowed materially. But GAAP profitability remains incomplete. Mixed does not mean the turnaround failed. It also does not mean slightly positive adjusted EBITDA is sufficient for a Success classification. Statements such as "the brand story must pass a manufacturing-economics test" and "return to growth without returning to large-scale capacity expansion" are GoGoUp educational analysis. The Discover, Analyze, Execute, Decide, and Create scores and commentary are GoGoUp educational assessments, not official Oatly ratings. This case is intended for business and entrepreneurship education and does not constitute investment advice.