Leef Brands (LEEF) Q1 2026 earnings summary

Executive summary

• Net revenue for Q1 2026 was $9.38M, essentially flat year-over-year, reflecting a strategic focus on wholesale concentrate manufacturing and reduced CPG retail sales.

• Achieved record gross profit, margins, and adjusted EBITDA in Q1 2026, marking the strongest quarter in company history.

• Gross profit rose to $4.62M (49% margin) from $2.07M (22% margin) in Q1 2025, driven by integration of in-house biomass supply and disciplined procurement.

• Operating income reached $1.28M, a turnaround from a $1.91M operating loss in Q1 2025, due to margin expansion and a $640K reduction in operating expenses.

• Net loss attributable to shareholders was $426K, compared to net income of $266K in Q1 2025, mainly due to a $390K expense from derivative liabilities and higher tax provision.

Financial highlights

• Revenue: $9.38M in Q1 2026 vs. $9.40M in Q1 2025 (flat year-over-year).

• Gross profit: $4.62M (49% margin) vs. $2.07M (22% margin) in Q1 2025.

• Adjusted EBITDA: $2.40M, up from $(0.73)M in Q1 2025, reflecting improved gross profit and cost control.

• Operating expenses: $3.34M, down 16% from $3.98M in Q1 2025.

• Operating cash flow was $0.4M, with positive free cash flow excluding seasonal licensing fees.

Outlook and guidance

• Management expects continued focus on wholesale concentrate manufacturing and margin expansion.

• Plans to scale Salisbury Canyon Ranch to full 180-acre capacity by year-end, with first 2026 harvest in June and a second later in the year.

• Submitted DEA license applications to enable interstate and global export opportunities.

• Expects increased in-house biomass production and improved margins as additional acreage comes online throughout 2026.

• Plans to expand CPG retail offerings in 2026, though retail sales remain immaterial.