Revenue growth remains resilient at 12.9% in 2026Q1, though gross margins have compressed significantly from a 39.6% peak in 2025Q2 to 34.5% in the most recent quarter.
| Sales/Revenue | 481.07M | 467.74M | 422.63M | 405.65M | 422.96M | 364.24M | 295.52M | 224.91M | 175.43M | 140.06M |
| Revenue Growth % | 11.71% | 10.67% | 4.19% | -4.09% | 16.12% | 23.26% | 31.39% | 28.2% | 25.26% | - |
| Cost of Goods Sold | 309.33M | 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 | 171.73M | 172.14M | 164.33M | 153.04M | 132.09M | 107.83M | 89.13M | 61.02M | 43.45M | 41.3M |
| Gross Margin % | 35.7% | 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 | 129.47M | 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 | 130.18M | 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 | -686K | 0 | 2.75M | 2.52M | 0 | 0 | 0 | 0 | 0 | 277K |
| Operating Income | 42.27M | 41.13M | 37.76M | 42.08M | 30.02M | 23.14M | 27.7M | 5.84M | 2.13M | 6.01M |
| Operating Margin % | 8.79% | 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 | 56.95M | 62.25M | 56.06M | 57.83M | 44.24M | 33.19M | 36.27M | 11.79M | 6.09M | 9.13M |
| EBITDA Margin % | 11.84% | 13.31% | 13.26% | 14.26% | 10.46% | 9.11% | 12.27% | 5.24% | 3.47% | 6.52% |
| EBITDA Growth % | 0.52% | 11.05% | -3.06% | 30.71% | 33.3% | -8.48% | 207.63% | 93.52% | -33.25% | - |
| D&A (Non-Cash Add-back) | 14.68M | 21.12M | 18.3M | 15.75M | 14.23M | 10.04M | 8.57M | 5.95M | 3.96M | 3.12M |
| EBIT | 46.16M | 41.13M | 42.82M | 45.03M | 34.53M | 30.43M | 25.85M | 7.7M | 2.13M | 6.01M |
| Net Interest Income | -1.26M | 155K | 176K | -240K | 209K | -1.4M | -5.49M | -4.75M | -1.46M | -1.28M |
| Interest Income | 2.76M | 2.21M | 2.3M | 1.8M | 2.23M | 1.51M | 0 | 0 | 0 | 0 |
| Interest Expense | 4.01M | 2.06M | 2.12M | 2.04M | 2.02M | 2.91M | 5.49M | 4.75M | 1.46M | 1.28M |
| Other Income/Expense | 1.2M | 1.89M | 2.93M | 908K | 2.5M | 4.38M | -5.77M | -2.89M | -585K | -1.36M |
| Pretax Income | 43.47M | 43.02M | 40.7M | 42.98M | 32.51M | 27.53M | 21.93M | 2.94M | 1.55M | 4.64M |
| Pretax Margin % | 9.04% | 9.2% | 9.63% | 10.6% | 7.69% | 7.56% | 7.42% | 1.31% | 0.88% | 3.32% |
| Income Tax | 10.48M | 10.36M | 9.87M | 9.8M | 6.68M | 5.09M | 5.26M | 781K | 1.67M | 96K |
| Effective Tax Rate % | 24.11% | 24.08% | 24.26% | 22.81% | 20.53% | 18.49% | 23.98% | 26.52% | 108.02% | 2.07% |
| Net Income | 31.81M | 31.48M | 29.98M | 32.47M | 23.65M | 20.78M | 17.52M | 1.72M | 21K | 4.55M |
| Net Margin % | 6.61% | 6.73% | 7.09% | 8% | 5.59% | 5.7% | 5.93% | 0.77% | 0.01% | 3.25% |
| Net Income Growth % | 5.27% | 5.01% | -7.68% | 37.31% | 13.81% | 18.62% | 916.07% | 8109.52% | -99.54% | - |
| Net Income (Continuing) | 32.99M | 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 | 7.73M | 7.45M | 6.63M | 8.57M | 10.25M | 9.13M | 7.46M | 8.31M | 7.87M | 0 |
| EPS (Diluted) | 1.58 | 1.56 | 1.49 | 1.63 | 1.19 | 1.12 | 1.13 | 0.11 | 0.00 | 0.21 |
| EPS Growth % | 5.33% | 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 | 20.07M | 20.18M | 20.12M | 19.98M | 19.93M | 19.8M | 15.45M | 15.19M | 19.12M | 14.72M |
| Basic Shares Outstanding | 19.96M | 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% |
Input Cost Volatility Exposure
According to recent quarterly filings, KRT achieved a 12.9% year-over-year revenue growth in 2026Q1, demonstrating consistent top-line expansion that appears to be supported by the company's strategic investment in regional distribution hubs and a growing footprint within the specialty beverage and fast-casual restaurant sectors.
The revenue trajectory suggests that the company is successfully capturing market share, likely benefiting from the recurring nature of its essential consumable product lines. Investors should monitor whether this growth remains organic or if it becomes increasingly dependent on price adjustments to offset inflationary pressures in the broader supply chain.
As reported in financial statements, KRT's gross margin contracted from a peak of 39.6% in 2025Q2 to 34.5% by 2026Q1, indicating that the company's ability to maintain premium pricing may be facing headwinds from shifting input costs or competitive pricing dynamics within the packaging industry.
The recent margin compression warrants investigation into whether this reflects a permanent shift in the cost of raw materials like resin or if it is a temporary byproduct of scaling new distribution infrastructure. The decline suggests that the company's pricing power may be more sensitive to commodity cycles than previously anticipated by the market.
Based on KRT's reported figures, operating income as a percentage of revenue has fluctuated significantly, dropping to 7.2% in 2026Q1 from a high of 13.3% in 2025Q2, which suggests that the company's fixed cost base is currently outpacing its ability to scale operating profitability efficiently.
The volatility in operating margins implies that the company's proprietary logistics fleet and warehouse network require high utilization rates to achieve meaningful leverage. If revenue growth fails to outpace the expansion of these fixed overhead costs, the company may struggle to improve its bottom-line efficiency in the near term.
Analysis of the income statement reveals that stock-based compensation, while relatively modest at $1.1M in 2025Q4, introduces periodic noise into net income, which reached $6.7M in 2026Q1, suggesting that investors should focus on core operating performance rather than headline EPS figures alone.
The presence of non-cash compensation and lumpy quarterly expenses warrants further investigation into the sustainability of reported net income. Investors should monitor whether these items continue to obscure the underlying cash-generating capability of the business as it scales its national distribution footprint.
Data from the last ten quarters suggests that KRT's profitability is highly susceptible to external shocks, as evidenced by the sharp decline in operating margins from 13.3% in 2025Q2 to 7.2% in 2026Q1, which may indicate that the company's competitive moat is thinner than the current valuation implies.
Short-sellers might focus on the company's reliance on imported components and the potential for margin erosion if ocean freight rates or resin prices spike unexpectedly. The recent trend suggests that the company's integrated model may not provide the level of insulation from commodity volatility that is necessary to justify a premium growth multiple.
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.