Village Farms International (VFF) Q1 2025 earnings summary

Executive summary

• Announced a transformative transaction to privatize the majority of the fresh produce division into a new joint venture, Vanguard Foods LP, retaining a 37.9% stake and receiving $40 million in cash proceeds, expected to close in Q2 2025.

• Q1 2025 sales were $77.1 million, down 1% year-over-year, with a net loss of $6.7 million, driven by lower produce margins and higher Canadian Cannabis SG&A, partially offset by improved Canadian Cannabis margins.

• Canadian Cannabis delivered its strongest EBITDA in three years, maintaining a top-three national market share, with international medical cannabis exports up 285% year-over-year.

• Netherlands Cannabis (Leli Holland) commenced sales in February 2025, with phase II expansion underway to quintuple capacity by Q1 2026.

• U.S. Cannabis improved profitability despite lower sales, and the company is focusing resources on global cannabis growth and international expansion.

Financial highlights

• Consolidated Q1 2025 revenue was $77.1 million, down 1% year-over-year; net loss was $6.7 million ($0.06/share), mainly due to a $4.3 million non-cash charge from dust storms affecting Texas produce facilities.

• Adjusted EBITDA dropped to $0.1 million from $3.6 million, impacted by produce segment losses.

• Cash and equivalents at March 31, 2025, were $15.1 million; working capital was $50 million.

• Operating cash flow was negative $6.4 million; capex increased to $2.8 million.

• Leli Holland generated nearly $500,000 in first sales and break-even adjusted EBITDA in its first month.

Outlook and guidance

• Management targets tripling international medical cannabis export sales in FY25, with continued expansion in Australia, Germany, UK, and New Zealand.

• Netherlands phase II facility to be completed in Q1 2026, expected to quintuple annual production and drive strong profitable growth.

• Expect the Vanguard transaction to close in Q2 2025, with pro forma financials and outlook to be provided post-closing.

• Focus remains on organic growth in Canada, international exports, and Netherlands expansion; M&A not prioritized.

• Canadian cannabis gross margins anticipated to remain in the 30-40% range due to favorable international sales mix.