Cannara Biotech (LOVE) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 2025 results with $27.3M revenue (up 40% year-over-year), $12.1M gross profit (up 110%), and $7.6M adjusted EBITDA (up 174%), marking the seventeenth consecutive positive quarter.

• Net income for the nine months ended May 31, 2025 was $9.8M, up from $0.7M year-over-year, with YTD net revenue at $79M (up 35%).

• Completed expansion strategy, increasing annual cultivation capacity by 18% to 39,500 kg, with operational breakthroughs raising yields by up to 26%, reaching 50,000 kg capacity a year ahead of schedule.

• Secured 5 of 25 vape SKUs for Quebec's upcoming vape category launch, representing 20% of accepted in-store SKUs.

• Cash position at May 31, 2025 was $14.4M, supporting ongoing operations and capital expenditures.

Financial highlights

• Net revenues reached $27.3M in Q3 2025 (up 3% quarter-over-quarter and 40% year-over-year); YTD net revenue was $75.8M, up from $55.5M year-over-year.

• Gross profit before fair value adjustments hit $12.1M in Q3 2025 (up 11% sequentially and 110% year-over-year); gross margin rose to 44%.

• Adjusted EBITDA was $7.6M (28% margin) in Q3 2025, up 7% quarter-over-quarter and 170% year-over-year.

• Net income was $4.1M ($0.04 per diluted share) in Q3 2025, up 25% quarter-over-quarter and 100% year-over-year; YTD EPS was $0.11 vs $0.01.

• Operating cash flow for Q3 2025 was $13.9M (51% margin), up 220% year-over-year; free cash flow was $11.7M (43% margin), up 840% year-over-year.

Outlook and guidance

• Fiscal 2025 guidance calls for continued growth in net revenue and adjusted EBITDA, with positive operating and free cash flow expected.

• Management expects existing cash, forecasted cash flows, and undrawn credit facilities to fund operations for at least the next 12 months.

• Quebec vape category launch expected in Q1 2026, with 5 approved SKUs for national rollout.

• No sales guidance for 2026, but revenue can be estimated from forecasted kilograms and average price per gram.

• Continued investment in capital expenditures at Valleyfield Facility, with 12 growing zones activated post-period, increasing active capacity to 300,000 sq. ft.