RYTHM (RYM) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue was $23.857M, including $17.500M in licensing revenue; operating income was $981K and net loss was $533K.

• Nine-month net income of $20.573M included a $26.798M non-cash tax benefit from releasing a valuation allowance.

• Fixed licensing fees support revenue, but impending hemp-derived THC restrictions and $80M of convertible-note maturities through February 2027 pose significant uncertainties.

Financial highlights

• Q3 revenue was $23.857M vs. $4.043M YoY; nine-month revenue was $60.163M vs. $6.623M.

• Q3 gross profit was $18.351M vs. $1.375M YoY; nine-month gross profit was $47.283M vs. $2.147M.

• Q3 operating income from continuing operations was $981K vs. an $8.888M loss; nine-month operating loss narrowed to $1.117M from $19.387M.

• Q3 net loss was $533K, or $0.07/share; nine-month net income was $20.573M, or $1.57/share.

• Adjusted EBITDA was $5.938M in Q3 and $12.274M for 9M, versus losses of $6.532M and $14.737M in 2025.

Outlook and guidance

• Licensing agreements provide $70M in annual fixed fees from April 1, 2026; a post-quarter amendment raised the aggregate fee to $70.25M. CPI-linked increases start in 2027 at 2x CPI, capped at 10% YoY.

• Remaining licensing performance obligations were $273.4M at September 30, 2026, expected to be recognized ratably through August 27, 2030; CPI escalators are excluded.

• No Q4 2026 outlook was issued because of impending federal and state restrictions on hemp-derived THC products.

• Current hemp-derived THC revenue may decline significantly or cease after federal restrictions take effect December 11, 2026; state restrictions may begin November 12.