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SodaStream's Rebound Accelerates Over the Holiday Quarter

By Demitri Kalogeropoulos - Feb 14, 2018 at 9:48AM

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Thirsty customers snapped up its sparkling water machines last quarter -- even at higher prices.

SodaStream (SODA) this week posted surprisingly strong fourth-quarter results as its latest lineup of sparkling water machines met with strong global demand over the holiday selling period.

Here's a look at how the headline numbers compare with the prior year:


Q4 2017

Q4 2016

Year-Over-Year Change


$158 million

$132 million


Net income

$25.5 million

$15.6 million






Data source: SodaStream.

What happened with SodaStream this quarter?

Revenue improved at a faster pace than even the upgraded forecast management issued back in early November, mainly thanks to robust demand in the core markets of Europe and North America. Profitability continued marching higher, too, as costs fell and selling prices rose.

A glass of sparkling water with a slice of lime on the rim

Image source: Getty Images.

Highlights of the quarter included:

  • Sales growth shot up to a 20% pace to mark a doubling of SodaStream's expansion rate from the 10% level it set six months ago in the second quarter. The Western European segment was the biggest single contributor to the gains, but SodaStream logged healthy growth in its U.S. division as well.
  • The company sold 25% more machine kits than in the prior-year holiday period even as average selling prices ticked up. In a reflection of continued customer engagement, carbon dioxide refill sales rose by 11% to 8.2 million. Those gains outweighed modest losses from reduced sales of flavorings.
  • Gross profit margin expanded to 53.8% of sales from 52.4% thanks to the higher sales volume and increased manufacturing efficiencies.
  • Advertising expenses rose, but overall marketing costs dipped as a percentage of sales. As a result, operating margin improved to 16.3% of sales from 14.3% a year ago.
  • SodaStream ended the year in a solid cash position, with $155 million on the balance sheet.

What management had to say

"Our fourth quarter performance represents a terrific finish to an outstanding year for SodaStream," CEO Daniel Birnbaum said in a press release. Management highlighted the 14% sales growth for the year which, along with its slimmer cost profile, translated into record profits.

"These results underscore the strength of our brand and product offering and showcase the power of our business model," Birnbaum said. "We successfully executed our growth plan aimed at expanding household penetration and increasing usage of our home carbonation system," he continued.

Looking forward

Birnbaum and his team are predicting continued progress on both the top and bottom lines in 2018. Revenue should increase by about 12%, they said, which would mark just a slight deceleration from last year's result. Operating income growth will moderate, too, executives said, rising by an estimated 20% compared to last year's 49% spike.

These predictions highlight just how far SodaStream has come since a brutal operating stretch threatened the entire business in fiscal 2014 and 2015. Three years later, following a pivot to a sparkling water focus, the company is forecasting its highest sales year yet even as operating income nearly doubles from its prior record of $49 million set back in 2013.

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