Core Insights - Village Farms International, Inc. has launched its first vape product, Matin, under the Promenade brand in Quebec, marking a significant development in the province's regulated cannabis market [1][4] - The introduction of a regulated vape category in Quebec is expected to enhance consumer access and drive growth in the legal cannabis market, as many consumers previously relied on unregulated sources [2][4] Company Overview - Village Farms is a large-scale, vertically-integrated supplier of plant-based Consumer Packaged Goods, leveraging its experience in Controlled Environment Agriculture [6] - The company operates one of the largest cannabis operations globally, with 2.2 million square feet of greenhouse production in Canada, and has significant expansion capacity [7] - Village Farms is also involved in international cannabis markets, exporting medical cannabis to countries like Germany and Australia, and is expanding its export business [8] Market Dynamics - Quebec accounts for 13% of national cannabis sales, generating $202 million in cannabis revenue in Q3 2025, reflecting a 10% year-over-year increase [4] - Recent consumer data indicates that 55% of cannabis consumers in Quebec are interested in purchasing vape products from legal channels, driven by safety and quality concerns [3][4] Product Details - The Promenade Matin vape is designed specifically for the Quebec market, featuring a blend of cannabinoids including THC and CBG, and is characterized by bright citrus notes and a smooth finish [5] - The product will be available across Quebec starting November 26, 2025, aiming to provide a high-quality vaping experience that meets regulatory standards [5]

Core Insights - Village Farms International, Inc. and its subsidiary Rose LifeScience Inc. have launched Promenade's first vape product, Matin, marking a significant advancement in Quebec's regulated cannabis market [1][4] - The introduction of a regulated vape category in Quebec is expected to enhance consumer access and drive growth in the legal cannabis market [2][4] Company Overview - Village Farms is a large-scale, vertically-integrated supplier of high-value plant-based Consumer Packaged Goods, leveraging decades of experience in Controlled Environment Agriculture [6] - The company operates one of the largest cannabis operations globally through its subsidiary Pure Sunfarms, with 2.2 million square feet of greenhouse production capacity [7] - Village Farms also holds an 80% stake in Rose LifeScience, a leader in cannabis product commercialization in Quebec [7] Market Dynamics - Quebec accounts for 13% of national cannabis sales, generating $202 million in cannabis revenue in Q3 2025, reflecting a 10% year-over-year increase [4] - Recent consumer data indicates that 55% of cannabis consumers in Quebec are interested in purchasing vape products from legal channels, driven by safety and quality concerns [3] Product Details - The Promenade Matin vape is designed specifically for the Quebec market, featuring a blend of cannabinoids including THC and CBG, and is characterized by bright citrus notes and a smooth finish [5] - The product will be available across Quebec starting November 26, 2025 [5]

Core Insights - Village Farms (VFF) shows a significantly improving earnings outlook, making it a solid investment choice [1] - Analysts are increasingly optimistic about the company's earnings prospects, leading to higher estimates that are expected to positively impact the stock price [2] Earnings Estimate Revisions - Current-quarter earnings are projected at $0.06 per share, reflecting a remarkable increase of +175.0% from the previous year [7] - For the full year, earnings are expected to reach $0.21 per share, indicating a change of +165.6% compared to the prior year [8] - The consensus estimates have risen significantly due to strong agreement among analysts, with no negative revisions noted [3][8] Zacks Rank and Performance - Village Farms has achieved a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance based on earnings estimate revisions [9] - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 2008, suggesting a favorable investment environment [3] Stock Performance - The stock has increased by 7.9% over the past four weeks, driven by strong estimate revisions and positive market sentiment [10] - There is potential for further upside in the stock, making it a candidate for portfolio addition [10]

Group 1 - United Natural Foods (UNFI) is a notable stock within the Consumer Staples sector, currently outperforming the sector with a year-to-date return of 41.4% compared to the sector average of -1% [4] - UNFI holds a Zacks Rank of 1 (Strong Buy), indicating a strong earnings outlook and positive analyst sentiment, with a 23% increase in the consensus estimate for full-year earnings over the past 90 days [3][4] - The Consumer Staples sector is ranked 14 within the Zacks Sector Rank, which evaluates the strength of individual sector groups based on the average Zacks Rank of stocks [2] Group 2 - UNFI is part of the Food - Miscellaneous industry, which includes 42 companies and is currently ranked 182 in the Zacks Industry Rank, with this group experiencing a loss of about 13.6% year-to-date [6] - In contrast, Village Farms (VFF), another stock in the Consumer Staples sector, has achieved a remarkable year-to-date return of 363% and also holds a Zacks Rank of 1 (Strong Buy) [5][7] - The Consumer Products - Staples industry, which includes Village Farms, has 36 stocks and is ranked 174, with a year-to-date decline of -12.3% [7]

Core Insights - Village Farms (VFF) reported strong financial performance for Q3-2025, with increasing revenue, net income, and free cash flow, driven by international sales [1] - Profit margins have also increased significantly, contributing to the overall positive financial results [1] - The stock price of Village Farms has surged by 378.85% over the last year, indicating strong market performance [1] Financial Performance - Revenue, net income, and free cash flow have all shown an upward trend in Q3-2025 [1] - The increase in profit margins reflects improved operational efficiency and cost management [1] - International sales are a key driver of the revenue growth, highlighting the company's expanding market reach [1]

Core Insights - Village Farms (VFF) reported quarterly earnings of $0.08 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, compared to a loss of $0.01 per share a year ago, representing an earnings surprise of +166.67% [1] - The company posted revenues of $66.74 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 13.83%, although this is a decrease from year-ago revenues of $83.37 million [2] - Village Farms shares have increased approximately 283.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 14.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $58.36 million, and for the current fiscal year, it is $0.12 on revenues of $235.28 million [7] - The estimate revisions trend for Village Farms was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Consumer Products - Staples industry, to which Village Farms belongs, is currently ranked in the bottom 17% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - The performance of Village Farms may also be influenced by the overall outlook for the industry, as empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5]

Financial Data and Key Metrics Changes - Consolidated net sales increased by 21% year over year in Q3, reaching $66.7 million, driven by growth in the Canadian cannabis segment and contributions from recreational cannabis sales in the Netherlands [4][17] - Net income from continuing operations was $10.8 million, or $0.09 per share, an increase of nearly 10% sequentially compared to the previous quarter [4][17] - Adjusted EBITDA from continuing operations was $20.7 million, resulting in an adjusted EBITDA margin of 31%, compared to 8.5% in Q3 of the previous year [4][17] - Cash flow from operations improved to $24.4 million, compared to $6.1 million in Q3 of the previous year [4][18] Business Line Data and Key Metrics Changes - Canadian cannabis business net sales grew by 29% year over year, reaching CAD 64.1 million, driven by strong performance in targeted channels and improved pricing [5][18] - Canadian cannabis gross margin was 56%, up from 26% in Q3 of the previous year, exceeding the targeted range of 30%-40% [11][19] - Adjusted EBITDA for Canadian cannabis improved by 309% year over year to CAD 26.6 million, resulting in an adjusted EBITDA margin of 41% [11][19] - The Netherlands cannabis operations generated EUR 3.6 million in sales with adjusted EBITDA of EUR 1.3 million, marking significant increases quarter over quarter [12][20] Market Data and Key Metrics Changes - The international medical cannabis business saw over 750% sales growth year over year, with significant contributions from Germany [5][18] - Village Farms is now believed to be the largest exporter of medical cannabis to Europe, with a strong position to expand into new markets [8][9] - Canadian cannabis retail sales were in line with expectations, with stronger contribution margins from retail branded sales [6][18] Company Strategy and Development Direction - The company is focused on scaling its cannabis production capabilities, with a 40 metric ton capacity expansion project underway, expected to increase annual production capacity in Canada by approximately 33% [10][11] - The company aims to continue supporting growth in Canada and abroad, with plans to expand into multiple new international jurisdictions [9][10] - The management emphasizes a culture of cost discipline and continuous improvement to drive future growth [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of positive trends across the business, citing competitive strengths and growth catalysts [4][25] - The company anticipates continued growth in revenue and EBITDA, supported by operational and manufacturing expertise [25] - Management highlighted the importance of consistent product quality and operational excellence in maintaining competitive advantage [30] Other Important Information - The company closed the quarter with approximately $88 million in cash, reflecting an increase of nearly $23 million since the end of Q2 [16][22] - A share repurchase program was implemented as part of a balanced approach to capital allocation to drive shareholder returns [16][23] Q&A Session Summary Question: About cannabis gross margin improvement - Management noted improved efficiency, higher crop yields, favorable pricing, and international export sales as key drivers for the sequential gross margin improvement [26][27] Question: Competitive environment and market share in international markets - Management indicated that consistent high-quality production and EU GMP certification have positioned the company well to gain market share, particularly in Germany [30][34] Question: Performance and outlook for the Netherlands - Management confirmed that long-term gross margin targets for the Netherlands are similar to those for Canadian cannabis, emphasizing the startup nature of the operations [31][32] Question: Regulatory changes and opportunities in Texas - Management expressed excitement about the regulatory changes in Texas and confirmed that they are exploring suitable structures to maintain their NASDAQ listing while considering M&A opportunities [36][37] Question: Quebec's importance and regulatory changes - Management acknowledged Quebec's significance but clarified that it does not account for 40% of total cannabis revenue, while highlighting the potential benefits from recent regulatory changes [38][39] Question: Competitive landscape in the Netherlands - Management noted that while some competitors face challenges, the company is focused on expanding its capacity and is well-positioned for future growth [40]

Financial Performance - Consolidated net sales increased 21% year-over-year to $66.7 million, with international export sales rising 758%[4] - Consolidated net income from continuing operations was $10.8 million, or $0.09 per share, compared to a net loss of $0.8 million in the prior year[4] - Consolidated adjusted EBITDA reached $20.2 million, representing 30.3% of sales, both company records[4] - Total Net Sales for Q3 2025 reached CAD $64.1 million, a 29% increase from CAD $49.8 million in Q3 2024[21] - Gross Profit for Q3 2025 was CAD $35.8 million, representing a 173% increase compared to CAD $13.1 million in Q3 2024[21] - Net Income for Q3 2025 was CAD $16.0 million, a significant increase of 900% from CAD $1.6 million in Q3 2024[21] - Adjusted EBITDA for Q3 2025 was CAD $26.6 million, up 309% from CAD $6.5 million in Q3 2024[21] - Total sales for the three months ended September 30, 2025, were $66,741 million, a decrease from $54,938 million in the same period of 2024, representing a decline of approximately 21.5%[27] - The company reported a basic income per share of CAD $0.09 for Q3 2025, compared to a loss of CAD $0.01 in Q3 2024[24] - The company reported a net loss of $7,810 million, compared to a net income of $3,399 million in the previous period, reflecting a significant decline[29] Operational Highlights - Operating cash flow for the quarter was $24.4 million, bringing the year-to-date total to $46.7 million, with a cash position of approximately $88 million[4] - The company is expanding its production capacity by 40 metric tons, expected to support growth in Canadian and international markets[3] - The Netherlands facility has reached full operating capacity, with a second facility under construction to quintuple production capacity, expected to be operational in Q1 2026[3] - The company plans to enter additional international medical markets in the first half of 2026, leveraging its strong export capabilities[14] - The hiring of a new Chief Information and Technology Officer aims to enhance the company's global technology and information strategy[14] Cost Management - Selling, general and administrative expenses for Q3 2025 totaled $15,599 million, a decrease from $14,565 million in Q3 2024, reflecting a reduction of approximately 7.1%[27] - The cost of sales for Q3 2025 was $34,803 million, compared to $41,301 million in Q3 2024, reflecting a decrease of about 15.7%[27] - The provision for income taxes in Q3 2025 was $4,717 million, compared to a recovery of $94 million in Q3 2024[27] - Total selling, general and administrative expenses reached $45,871 million, highlighting increased operational costs[29] - Interest expense decreased to $2,162,000 from $2,594,000, indicating improved cost management in financing[43] Cash Flow and Investments - Cash Flow from Operations for Q3 2025 was CAD $26.8 million, a 339% increase from CAD $6.1 million in Q3 2024[21] - Cash flows provided by operating activities from continuing operations increased significantly to $46,710,000 compared to a net cash of $2,803,000 in the same period last year, marking a substantial improvement[43] - Net cash used in investing activities from continuing operations was $7,117,000, up from $5,607,000 in the previous year, indicating increased investment in growth[43] - The company repaid $6,612,000 in borrowings, which is an increase from $4,301,000 in the previous year, reflecting a focus on reducing debt[43] Future Outlook - The company plans to focus on market expansion and new product development to drive future growth[27] - The company anticipates continued growth in sales and profitability driven by its strategic initiatives in the cannabis and agricultural sectors[37]

Market Position and Sales Performance - The company maintains a top five overall market share position in Canada and the number two position in dried flower, despite planned reductions in sales of lower-margin SKUs[113]. - International export sales increased 758% year-over-year, driven by continued strength of demand in Germany and steady performance across other international markets[120]. - The company believes it remains the largest exporter of medical cannabis to Europe, gaining market share sequentially in Germany in each of the past four quarters[120]. - Sales for the three months ended September 30, 2025 were $66,741, an increase of $11,803 or 21% compared to $54,938 for the same period in 2024, driven by growth in Canadian Cannabis sales and first-year sales from Leli[127]. - For the nine months ended September 30, 2025, total sales reached $166.32 million, compared to $150.52 million for the same period in 2024, representing an increase of 10.5%[156]. Financial Performance - The company significantly surpassed the high end of its targeted gross margin range of 30-40%, marking the third consecutive quarter meeting or exceeding the target range, contributing to record quarterly and YTD adjusted EBITDA performance[113]. - Gross profit for the three months ended September 30, 2025 was $31,938, an increase of $18,301 or 134% compared to $13,637 for the same period in 2024, primarily due to increased gross profit in Canadian Cannabis[129]. - Adjusted EBITDA for the three months ended September 30, 2025 was $20,288, an increase of $14,986 or 283% compared to $5,302 for the same period in 2024, driven by higher margins in Canadian Cannabis[138]. - Net income attributable to Village Farms International, Inc. shareholders for the three months ended September 30, 2025 was $10,217, compared to a net loss of $820 for the same period in 2024, reflecting improved gross margin[137]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $33,629, reflecting an increase of $28,295 or 530% from $5,334 in the same period of 2024, primarily due to higher margins in Canadian Cannabis[152]. Cost Management - Cost of sales for the nine months ended September 30, 2025 was $97,860, a decrease of $14,171 or 13% compared to $112,031 for the same period in 2024, primarily due to a decrease in Canadian Cannabis cost of sales[140]. - Selling, general and administrative expenses for the nine months ended September 30, 2025 were $45,629, representing 27% of sales, compared to $45,871 or 30% of sales for the same period in 2024[142]. - The cost of sales for the three months ended September 30, 2025, was $34,803, compared to $41,301 for the same period in 2024, reflecting a decrease of approximately 16%[153]. Investments and Acquisitions - The company completed its acquisition of the remaining 15% equity ownership interest in Leli Holland, with sales commencing in February 2025[100]. - The Phase II facility in Groningen is expected to quintuple total annualized production capacity to approximately 10,000 kilograms when operational in Q1 2026[120]. - The company has begun expansion of cultivation capacity in its Delta 2 greenhouse, expected to yield an incremental 40 metric tons of annualized cannabis production, expanding capacity by approximately 33%[120]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash as of September 30, 2025 were $87,561 million, compared to $24,631 million at December 31, 2024[222]. - For the nine months ended September 30, 2025, cash provided by operating activities was $46,710, a significant increase from $2,803 in 2024, primarily due to improvements in Canadian Cannabis gross margins[237]. - The net cash increase for the period was $64,827 in 2025, compared to a decrease of ($6,403) in 2024[236]. Impairments and Losses - Goodwill and intangible asset impairments for the nine months ended September 30, 2025 were $0, compared to $11,939 for the same period in 2024, indicating improved financial performance in the U.S. Cannabis reporting unit[148]. - The company reported a goodwill impairment of $11,939 million in 2024, which was not present in 2025, indicating improved financial performance[253]. - The loss from discontinued operations, net of tax, for the nine months ended September 30, 2025, was $(8,970), compared to $(4,756) for the same period in 2024, showing an increase in losses[150]. Operational Highlights - The company has introduced several new packaging innovations in the Canadian market, including a one-way aroma valve and windowed packaging for flower products[113]. - The company has a pending application for a Texas medicinal marijuana license, with new license awards expected on December 1, 2025[117]. - The company has authorized a US$10 million share repurchase for up to 5,687,000 common shares, representing five percent of the company's issued and outstanding common shares[120]. Segment Performance - Canadian Cannabis net sales for the three months ended September 30, 2025, were $46,583, a 28% increase from $36,463 in 2024[163]. - U.S. Cannabis net sales for the three months ended September 30, 2025, were $3,337, a 15% decrease from $3,943 in 2024[180]. - The Netherlands Cannabis segment commenced sales in Q1 2025, with net sales of $3,587 for the three months ended September 30, 2025[193].

Core Insights - Village Farms International reported record financial performance in Q3 2025, with significant year-over-year increases in net income, adjusted EBITDA, and cash flow from operations [2][3] - The company achieved a 29% year-over-year growth in net sales, reaching $66.7 million, and a record gross margin of 56% [3][8] - International export sales surged by 758%, driven by strong demand in Germany and other international markets [3][14] Financial Performance - Consolidated net sales increased by 21% year-over-year to $66.7 million, up from $54.9 million [3][8] - Consolidated net income from continuing operations was $10.8 million, or $0.09 per share, compared to a net loss of $0.8 million in the prior year [3][8] - Adjusted EBITDA reached $20.2 million, representing 30.3% of sales, marking both a company record and a significant increase from $4.7 million or 8.5% of sales in the prior year [3][8] Canadian Cannabis Segment - Canadian cannabis operations delivered record net sales of $46.6 million, a 29% increase from $36.5 million [3][8] - The gross margin for Canadian cannabis improved to 56%, up from 26%, due to enhanced operating efficiency and a higher mix of international export sales [3][8] - A 40 metric ton production capacity expansion project is currently underway to support growth in Canadian and international markets [2][3] International Cannabis Segment - The Netherlands cannabis operations saw continued sales growth, with the Drachten facility reaching full operating capacity [2][3] - Construction of a second, larger facility in the Netherlands is on schedule to be operational in Q1 2026, which is expected to quintuple production capacity [2][3] Cash Flow and Capital Allocation - Operating cash flow for the quarter was $24.4 million, bringing the year-to-date total to $46.7 million, with a cash position of approximately $88 million at quarter-end [3][8] - The company initiated a share repurchase program, authorizing up to $10 million for the buyback of common shares as part of a balanced capital allocation strategy [15]