RYTHM (RYM) Q2 2026 earnings summary

Executive summary

• Achieved net income of $1.2 million for Q2 2026, reversing a $7.2 million loss in the prior year, driven by a significant non-cash income tax benefit from the release of valuation allowance on deferred tax assets.

• Revenue surged to $23.0 million for Q2 2026 (up 1027% year-over-year and 73% sequentially), primarily due to new and amended licensing agreements and growth in hemp-derived THC product sales, including the beverage segment.

• Gross profit margin expanded to 80.5% in Q2 2026 from 33.4% in Q2 2025, reflecting high-margin licensing revenue.

• Discontinued operations from extraction and cultivation businesses are fully wound down, with no material ongoing impact.

• Cash flow from operations was $8.7 million, increasing cash on hand to $41.9 million.

Financial highlights

• Q2 2026 revenue: $23.0 million (Q2 2025: $2.0 million); six months: $36.3 million (2025: $2.6 million).

• Gross profit: $18.5 million (Q2 2026), $28.9 million (six months), with gross margin of 80.5% and 79.7%, respectively.

• Operating income: $1.9 million in Q2 2026, compared to a loss of $6.8 million in Q2 2025.

• Adjusted EBITDA: $6.4 million for Q2 2026 and $6.3 million for the six months, compared to negative $5.4 million and $8.2 million in 2025.

• Cash and cash equivalents: $41.9 million as of June 30, 2026.

Outlook and guidance

• Management expects contractual licensing revenue and current cash reserves to be sufficient to meet obligations for at least the next 12 months.

• No outlook provided for Q3 2026 due to regulatory uncertainty regarding federal law changes affecting hemp-derived THC products, effective November 12, 2026.

• Regulatory changes effective November 2026 may require reformulation or discontinuation of current hemp-derived THC products, potentially impacting future revenue streams.

• Ongoing evaluation of strategic options in response to evolving federal and state regulations.