Decibel Reports Third Quarter 2025 Financial Results

Core Insights - Decibel Cannabis Company Inc. reported strong financial results for the third quarter of 2025, indicating that its growth strategy is effective and that international demand is exceeding supply [2][5][11] Financial Performance - Gross Canadian recreational sales reached CAD 38.97 million for Q3 2025, up from CAD 36.59 million in Q3 2024, marking a 6% increase [4] - Net Canadian recreational sales were CAD 24.51 million, a 3% increase year-over-year [5] - International sales surged to CAD 8.41 million in Q3 2025, compared to CAD 0.31 million in Q3 2024, reflecting a significant growth driven by AgMedica's contributions [4][5] - Total gross revenue for Q3 2025 was CAD 47.38 million, up from CAD 36.90 million in Q3 2024, representing a 28% increase [4] - Adjusted EBITDA for Q3 2025 was CAD 7.27 million, a 40% increase from CAD 5.21 million in Q3 2024 [5][6] Profitability Metrics - Gross profit before fair value adjustments was CAD 15.36 million, with a gross margin of 47% for Q3 2025, down from 53% in Q3 2024 [4][5] - Adjusted net income for Q3 2025 was CAD 3.76 million, compared to CAD 2.06 million in Q3 2024, indicating a year-over-year increase of 82% [6][19] Cash Flow and Capital Management - Free cash flow for Q3 2025 was CAD 1.53 million, a slight decrease from CAD 1.83 million in Q3 2024 [6][19] - Adjusted free cash flow increased to CAD 5.18 million in Q3 2025, up from CAD 2.73 million in Q3 2024 [6][19] Guidance and Market Conditions - The company revised its full-year 2025 guidance for net revenue to approximately CAD 115 million and Adjusted EBITDA to approximately CAD 24 million, down from previous estimates of CAD 130 million and CAD 25 million respectively [8][11] - Factors affecting guidance include the halt of cannabis imports by the German Federal Institute for Drugs and Medical Devices and a strike affecting cannabis distribution in British Columbia [9][11]