Decibel Reports Third Quarter 2025 Financial Results

Executive Summary

• Decibel Cannabis reported unaudited Q3 2025 results with net revenue of C$32.9 M, up 37% YoY, driven by strong international sales from AgMedica and modest growth in Canadian recreational sales.
• Adjusted EBITDA rose 40% YoY to C$7.3 M; adjusted EPS improved to $0.01 per share.
• The company revised full‑year 2025 guidance downward due to regulatory import limits in Germany, a B.C. union strike, and contract pricing changes, now forecasting net revenue of ≈C$115 M and Adjusted EBITDA of ≈C$24 M (vs. prior C$130 M / C$25 M).

Key Details

• Net Revenue: C$32.9 M (↑37% YoY)
• Canadian recreational net sales: C$24.5 M (↑3%)
• International net sales: C$8.4 M (↑37% QoQ), of which AgMedica contributed C$7.8 M (entirely international).
• Gross Margin (pre‑fair value adjustments): 47% (down from 53% YoY) – margin compression attributed to higher testing costs on international sales.
• Adjusted EBITDA: C$7.3 M (↑40% YoY)
• Free Cash Flow: C$1.5 M (↓C$0.3 M YoY) – impacted by working‑capital changes supporting growth positioning.
• Adjusted Net Income: C$3.8 M (↑C$1.7 M YoY); Adjusted EPS: $0.01 (up $0.01 YoY).
• Nine‑Month Totals (ended Sep 30, 2025):
• Net revenue C$83.995 M vs. C$67.225 M in 2024.
• Adjusted EBITDA C$17.030 M vs. C$12.736 M in 2024.
• Revised Full‑Year Guidance (2025):
• Net revenue ≈C$115 M (down from prior C$130 M).
• Adjusted EBITDA ≈C$24 M (down from prior C$25 M).
• Key Drivers of Revised Guidance:
  1. German BfArM halted cannabis import approvals in Oct 2025, later raising the limit to 192.5 t and resuming permits – causing launch delays for new products and contracts.
  2. B.C. General Employees' Union strike (Sept 23–Oct end) limited deliveries to BC Liquor Distribution Branch, reducing product availability.
  3. Contract restructuring to fee‑per‑gram pricing rather than full sales price, affecting net revenue and working‑capital terms (gross profit expected unchanged).
• Management Outlook: Impacts deemed transitory; long‑term earnings potential viewed as intact.
• Conference Call: Live call scheduled for 10:00 a.m. MST on the same day; dial‑in numbers provided with conference ID 1629404.

Notable Quotes

“Our results this quarter build on the continued momentum in 2025, proving that Decibel's strategy is working… we believe Decibel is only at the beginning of its growth trajectory.” – Benjamin Sze, CEO

All non‑material boilerplate, forward‑looking disclaimer text, and company background have been omitted for brevity.