Revenue grew 9.9% to a record $136.3M in 2026Q2, with gross margin expanding to 56.6% from 39.6% a year earlier, driving operating income up 126% to $37.6M.
Karat Packaging Inc. (KRT) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 493.38M | 467.74M | 422.63M | 405.65M | 422.96M | 364.24M | 295.52M | 224.91M | 175.43M | 140.06M |
| Revenue Growth % | 11.62% | 10.67% | 4.19% | -4.09% | 16.12% | 23.26% | 31.39% | 28.2% | 25.26% | - |
| Cost of Goods Sold | 293.6M | 295.61M | 258.3M | 252.61M | 290.87M | 256.42M | 206.39M | 163.89M | 131.98M | 98.75M |
| COGS % of Revenue | - | 63.2% | 61.12% | 62.27% | 68.77% | 70.4% | 69.84% | 72.87% | 75.23% | 70.51% |
| Gross Profit | 199.79M | 172.14M | 164.33M | 153.04M | 132.09M | 107.83M | 89.13M | 61.02M | 43.45M | 41.3M |
| Gross Margin % | 40.49% | 36.8% | 38.88% | 37.73% | 31.23% | 29.6% | 30.16% | 27.13% | 24.77% | 29.49% |
| Gross Profit Growth % | - | 4.75% | 7.37% | 15.87% | 22.5% | 20.98% | 46.06% | 40.42% | 5.21% | - |
| Operating Expenses | 136.47M | 131.22M | 126.57M | 110.97M | 102.07M | 84.68M | 61.43M | 55.18M | 41.32M | 35.3M |
| OpEx % of Revenue | - | 28.05% | 29.95% | 27.36% | 24.13% | 23.25% | 20.79% | 24.54% | 23.55% | 25.2% |
| Selling, General & Admin | 136.84M | 131.22M | 123.82M | 108.44M | 102.07M | 84.68M | 61.43M | 55.18M | 41.32M | 35.3M |
| SG&A % of Revenue | - | 28.05% | 29.3% | 26.73% | 24.13% | 23.25% | 20.79% | 24.54% | 23.55% | 25.2% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | -343K | 0 | 2.75M | 2.52M | 0 | 0 | 0 | 0 | 0 | 277K |
| Operating Income | 63.32M | 41.13M | 37.76M | 42.08M | 30.02M | 23.14M | 27.7M | 5.84M | 2.13M | 6.01M |
| Operating Margin % | 12.83% | 8.79% | 8.93% | 10.37% | 7.1% | 6.35% | 9.37% | 2.59% | 1.22% | 4.29% |
| Operating Income Growth % | - | 8.94% | -10.26% | 40.18% | 29.68% | -16.43% | 374.59% | 173.73% | -64.51% | - |
| EBITDA | 74.52M | 62.25M | 56.06M | 57.83M | 44.24M | 33.19M | 36.27M | 11.79M | 6.09M | 9.13M |
| EBITDA Margin % | 15.1% | 13.31% | 13.26% | 14.26% | 10.46% | 9.11% | 12.27% | 5.24% | 3.47% | 6.52% |
| EBITDA Growth % | 18.76% | 11.05% | -3.06% | 30.71% | 33.3% | -8.48% | 207.63% | 93.52% | -33.25% | - |
| D&A (Non-Cash Add-back) | 9.35M | 21.12M | 18.3M | 15.75M | 14.23M | 10.04M | 8.57M | 5.95M | 3.96M | 3.12M |
| EBIT | 71.9M | 45.08M | 42.82M | 45.03M | 34.53M | 30.43M | 25.85M | 7.7M | 2.13M | 6.01M |
| Net Interest Income | -677K | 155K | 176K | -240K | 209K | -1.4M | -5.49M | -4.75M | -1.46M | -1.28M |
| Interest Income | 3.24M | 2.21M | 2.3M | 1.8M | 2.23M | 1.51M | 0 | 0 | 0 | 0 |
| Interest Expense | 3.92M | 2.06M | 2.12M | 2.04M | 2.02M | 2.91M | 5.49M | 4.75M | 1.46M | 1.28M |
| Other Income/Expense | 4.66M | 1.89M | 2.93M | 908K | 2.5M | 4.38M | -5.77M | -2.89M | -585K | -1.36M |
| Pretax Income | 67.98M | 43.02M | 40.7M | 42.98M | 32.51M | 27.53M | 21.93M | 2.94M | 1.55M | 4.64M |
| Pretax Margin % | 13.78% | 9.2% | 9.63% | 10.6% | 7.69% | 7.56% | 7.42% | 1.31% | 0.88% | 3.32% |
| Income Tax | 16.4M | 10.36M | 9.87M | 9.8M | 6.68M | 5.09M | 5.26M | 781K | 1.67M | 96K |
| Effective Tax Rate % | 24.12% | 24.08% | 24.26% | 22.81% | 20.53% | 18.49% | 23.98% | 26.52% | 108.02% | 2.07% |
| Net Income | 50.21M | 31.48M | 29.98M | 32.47M | 23.65M | 20.78M | 17.52M | 1.72M | 21K | 4.55M |
| Net Margin % | 10.18% | 6.73% | 7.09% | 8% | 5.59% | 5.7% | 5.93% | 0.77% | 0.01% | 3.25% |
| Net Income Growth % | 56.64% | 5.01% | -7.68% | 37.31% | 13.81% | 18.62% | 916.07% | 8109.52% | -99.54% | - |
| Net Income (Continuing) | 51.59M | 32.66M | 30.82M | 33.18M | 25.84M | 22.44M | 16.67M | 2.16M | -124K | 4.55M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 7.8M | 7.45M | 6.63M | 8.57M | 10.25M | 9.13M | 7.46M | 8.31M | 7.87M | 0 |
| EPS (Diluted) | 2.50 | 1.56 | 1.49 | 1.63 | 1.19 | 1.12 | 1.13 | 0.11 | 0.00 | 0.21 |
| EPS Growth % | 57.23% | 4.7% | -8.59% | 36.97% | 6.25% | -0.89% | 927.27% | - | -99.48% | - |
| EPS (Basic) | - | 1.57 | 1.50 | 1.63 | 1.19 | 1.13 | 1.15 | 0.11 | 0.00 | 0.21 |
| Diluted Shares Outstanding | 20.11M | 20.18M | 20.12M | 19.98M | 19.93M | 19.8M | 15.45M | 15.19M | 19.12M | 14.72M |
| Basic Shares Outstanding | 19.95M | 20.06M | 20M | 19.9M | 19.82M | 19.8M | 15.18M | 15.19M | 19.12M | 14.72M |
| Dividend Payout Ratio | - | 114.68% | 103.47% | 71.46% | 29.45% | - | 3.46% | - | 5928.57% | 15.39% |
Quick answers to the most common questions about buying KRT stock.
For fiscal year 2025, Karat Packaging Inc. (KRT) reported total revenue of $467.7M. This represents a 234.0% increase compared to $140.1M in 2017.
Karat Packaging Inc. (KRT) is profitable, generating $31.5M in net income for the fiscal year ending 2025 with a net profit margin of 6.7%.
Karat Packaging Inc. (KRT) reported an operating income of $41.1M, resulting in an operating profit margin of 8.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Karat Packaging Inc. (KRT) generated $172.1M in gross profit for the year, representing a gross profit margin of 36.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Regulatory and input cost volatility
Metrics are mathematically derived from official filings.
Accelerating Growth with Record Quarter
KRT's revenue grew 9.9% year-over-year in 2026Q2 to a record $136.3M, accelerating from 3.5% in 2024Q2, driven by strong demand in specialty beverage and e-commerce channels.
The sequential acceleration from 3.5% in 2024Q2 to 9.9% in 2026Q2 indicates a strengthening demand environment, likely supported by the company's expansion into new regions and the durable growth of the boba and specialty coffee sectors. The record quarterly net sales suggest that the company is gaining market share, possibly at the expense of larger competitors who lack the logistical agility for the fragmented mid-market. However, investors should monitor whether this growth is sustainable given potential regulatory headwinds and the cyclicality of consumer discretionary spending.
Gross Margin Surge Signals Pricing Power
Gross margin jumped to 56.6% in 2026Q2 from 39.6% a year earlier, according to the latest income statement, suggesting a favorable mix shift and lower input costs.
The 17-point expansion in gross margin is a dramatic improvement, far exceeding the historical range of 34-40%. This likely reflects a combination of lower resin and freight costs, a higher proportion of value-added eco-friendly products, and possibly one-time benefits. While the company's integrated model provides some insulation, such a spike may not be sustainable if input costs normalize. The sustainability of this margin level is critical, as it underpins the strong operating leverage seen in the quarter.
Operating Leverage Amplifies Earnings
Operating income surged to $37.6M in 2026Q2, a 126% increase from $16.6M in 2025Q2, as SG&A grew only 20% while gross profit more than doubled.
The operating margin of 27.6% in 2026Q2 is a significant outlier compared to the 7-13% range seen in prior quarters, indicating that the company's fixed cost base is being utilized far more efficiently. This suggests that the investments in regional distribution centers and the proprietary fleet are beginning to pay off, allowing revenue growth to drop through to the bottom line at an accelerated rate. However, such a high operating margin may be unsustainable if the gross margin reverts to historical levels, and investors should watch for any signs of cost inflation in SG&A.
EPS Beat Raises Quality Questions
EPS of $1.46 in 2026Q2 far exceeded the $0.46 estimate, but the 170% growth versus a 9.9% revenue increase suggests possible one-time gains or favorable tax items.
The magnitude of the EPS beat is extraordinary, with net income of $29.3M representing a 21.5% net margin, more than double the historical average. While the gross margin surge explains part of this, the net margin is disproportionately high, suggesting that there may be non-operating items or a lower effective tax rate boosting the bottom line. Stock-based compensation was minimal at $596K, so that is not a drag. Investors should scrutinize the income statement for any one-time items, as the quality of earnings may be lower than the headline number suggests.
COGS Volatility Drives Margin Swings
COGS as a percentage of revenue fell to 43.4% in 2026Q2 from 60.4% in 2025Q2, reflecting lower input costs and a favorable product mix, but this volatility is a key risk.
The dramatic reduction in COGS is the primary driver of the margin expansion, and it appears to be a result of lower resin prices and ocean freight rates, as well as a shift toward higher-margin specialty products. However, the historical data shows significant fluctuation in COGS, indicating that the company is highly sensitive to commodity price swings. Management's ability to pass on cost increases or lock in favorable input prices will be crucial for maintaining margins. The recent expansion of domestic manufacturing may help mitigate some of this volatility, but it also increases fixed costs.
Margin Spike May Not Be Sustainable
The 56.6% gross margin in 2026Q2 is an outlier versus the 34-40% range of the prior nine quarters, suggesting a temporary benefit that could reverse.
Short-sellers would argue that the record margins are unsustainable, driven by cyclical tailwinds in input costs and possibly one-time gains. The historical data shows that gross margins have been relatively stable in the 34-40% range, and the sudden jump to 56.6% is not supported by the company's long-term trend. If resin prices or freight rates rise, margins could compress sharply, and the operating leverage that boosted EPS could work in reverse. Additionally, regulatory pressures on plastics could force the company to transition to more expensive materials, further squeezing margins. Investors should be cautious about extrapolating this quarter's profitability into the future.