Leef Brands (LEEF) Q4 2025 earnings summary

Executive summary

• 2025 marked a pivotal year with the first successful cultivation of 65 acres, growing nearly 2 million plants and significantly improving extraction business economics.

• Achieved revenue of $8.3 million in Q4 2025, up 38.9% year-over-year, and $34.8 million for FY 2025, up 22.1% year-over-year.

• Gross profit rose to $3.8 million in Q4 2025, up 188.2% year-over-year, and $10.5 million for FY 2025, up 36.5% year-over-year.

• The company strengthened its balance sheet by converting $12 million in debentures and secured up to $8 million in new financing to complete its California farm build-out.

• Focus for 2026 is on completing the California farm, expanding licensed acreage, and optimizing supply chain control for higher ROI.

Financial highlights

• Revenue increased 22% year-over-year; Q4 revenue was $8.3 million, up 39% from Q4 2024.

• Gross margins improved from 19.7% in H1 to 41.4% in H2, with Q4 margin at 45.5%.

• Positive operating cash flow of $1.3 million and free cash flow of $1.2 million achieved in Q4.

• Year-end cash position was $2.2 million, more than double the mid-year level.

• Adjusted EBITDA turned positive in Q4 2025 at $1.0 million, with FY 2025 at $(0.4) million, a substantial improvement from FY 2024.

Outlook and guidance

• 2026 will focus on completing the California farm, adding 15+ acres in spring and more in fall, with further expansion possible.

• Expects continued strong performance in the near term, driven by internal supply from Salisbury Canyon Ranch.

• Anticipates a temporary margin decline in Q2 2026 due to harvest cycle transition, with improvement expected in H2 2026.

• Long-term goal is to consistently run operations with in-house material, reducing reliance on third-party sourcing.

• Seasonality expected to diminish as internal supply stabilizes, leading to more consistent margins and cash flow.