Decibel Cannabis Company (DB) Q3 2025 earnings summary

Executive summary

• Net revenue for Q3 2025 reached $32.9 million, up 37% year-over-year, driven by AgMedica's international sales and modest Canadian recreational growth.

• International sales surged to $8.4 million, a 37% sequential increase, with AgMedica contributing $7.8 million.

• Gross margin before fair value adjustments was 47%, down from 53% in Q3 2024, mainly due to lower margins on international sales.

• Adjusted EBITDA rose 40% year-over-year to $7.3 million, reflecting strong international and domestic sales.

• Adjusted net income was $3.8 million, up $1.7 million year-over-year, with adjusted EPS of $0.01.

Financial highlights

• Net Canadian recreational sales were $24.5 million, a 3% year-over-year increase, supported by new product launches and marketing initiatives.

• Gross profit before fair value adjustments for Q3 2025 was $15.4 million, up from $12.7 million in Q3 2024.

• Free cash flow for the quarter was $1.5 million, a decrease of $0.3 million year-over-year, mainly due to working capital changes.

• Adjusted free cash flow reached $5.2 million, up from $2.7 million in Q3 2024.

• Net loss and comprehensive loss for Q3 2025 was $1.3 million, compared to $0.6 million in Q3 2024.

Outlook and guidance

• 2025 net revenue guidance revised to approximately $115 million and adjusted EBITDA to $24 million, down from previous guidance of $130 million and $25 million, respectively.

• Guidance revision reflects temporary impacts from the German BfArM import halt, B.C. General Employees' Union strike, and contract structuring changes.

• Management expects these impacts to be transitory and not disruptive to long-term earnings potential.