Decibel Cannabis Company (DB) Q1 2026 earnings summary

Executive summary

• Q1 2026 net revenue reached CAD 30 million (USD 29.8 million), up 41% year-over-year, with international sales more than tripling to CAD 9.6 million and adjusted EBITDA doubling to CAD 6.9 million.

• Domestic market share climbed 10% sequentially, with Standard Issue brand ranking eighth in vape and tenth in infused pre-rolls.

• The company maintained leadership in infused pre-rolls and expanded vape and flower offerings, with new brands and product innovations driving growth.

• Major debt refinancing completed and conditional sale of the Creston facility for CAD 2.5 million announced, expected to save CAD 4 million annually.

• Exited Q1 with 30% utilization of 60-ton annual flower processing capacity, providing significant room for growth.

Financial highlights

• Consolidated net revenues were CAD 30 million, up 41% year-over-year; domestic sales grew 7% to CAD 20 million, and international sales rose over 300% to CAD 9.6 million.

• Adjusted EBITDA was CAD 6.9 million, doubling year-over-year; adjusted net income was CAD 3.1 million, up CAD 3.2 million from the prior year.

• Free cash flow was negative CAD 14.6 million, impacted by a one-time CAD 13.2 million reduction in payables from February 2026 debt refinancing.

• Gross margin reached 51%, up from prior quarters, driven by lower input costs for extracts.

• SG&A expenses grew 12% year-over-year, slower than revenue growth; sales and marketing expenses rose 70% but are expected to slow.

Outlook and guidance

• 2026 guidance reconfirmed: net revenues of CAD 130–135 million (18% growth at midpoint), adjusted EBITDA of CAD 27–31 million (26% growth at midpoint).

• Q2 2026 guidance: net revenues of CAD 33–35 million, implying 14% sequential growth at midpoint.

• Double-digit international growth expected, with improved German permit timelines and strong demand in Germany and the U.K.

• Material free cash flow generation anticipated for the remainder of 2026 as one-time working capital impacts subside.

• Management expects high double-digit international sales growth and high single-digit domestic growth through 2026.