Cannara Biotech (LOVE) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 set records in revenue, gross profit, operating income, Adjusted EBITDA, net income, and cash flow, driven by capacity expansion, operational efficiency, and early achievement of FY26 production targets.

• Net income reached $13.1 million, more than doubling year-over-year, with positive retained earnings for the first time.

• National market share rose to 3.81%, with Quebec share at 13.5% and strong growth in Ontario, Alberta, and BC.

• Flagship brands Tribal, Nugz, and Orchid CBD led in multiple product categories, including infused pre-rolls, premium flower, vapes, and hash rosin.

• Management remains focused on disciplined operations, leveraging proprietary technology, and maintaining a strong board and insider ownership above 50%.

Financial highlights

• Net revenue for FY25 was $107.3 million, up 31% year-over-year, with gross cannabis revenue at $148.6 million.

• Gross profit before fair value adjustments reached $44.5 million (41% margin), up from 34% last year.

• Adjusted EBITDA was $28.1 million (26% margin), up 86% year-over-year; net income doubled to $13.1 million.

• Q4 FY25 net revenue was $28.3 million, with gross margin at 42% and net income of $3.3 million.

• Operating cash flow for the year was $20 million, with free cash flow at $13.7 million, up 328% year-over-year.

Outlook and guidance

• Management expects continued margin improvement as new rooms and post-processing capacity come online, targeting gross margins above 40% and potentially up to 50%.

• Production capacity is expected to reach 100,000kg annually as Valleyfield expansion continues, with 12 additional grow rooms planned.

• Capital investment strategy for FY26 prioritizes a new processing center, funded by a $10 million BMO term loan.

• Steady, annual growth is anticipated, with no plans for rapid spikes or declines.

• Focus remains on expanding product and brand pipeline, maintaining consistent grow operations, and lean cost structure.