Village Farms International (VFF) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 2025 profitability, with net income of $26.5M, reversing a prior year loss, driven by operational transformation, strong cannabis performance, and a strategic produce segment transaction.

• Adjusted EBITDA from continuing operations reached $17.1M (28.6% of sales), a company record, with Canadian cannabis adjusted EBITDA up 146% year-over-year.

• Closed the privatization of produce assets, receiving $40M in cash and a 37.9% stake in Vanguard Food LP, strengthening the balance sheet.

• International cannabis sales surged, especially in Germany and the U.K., achieving the full-year target for tripling 2024 international export sales by mid-year.

• Expansion projects in Canada and the Netherlands are underway, with the Netherlands phase two facility expected to quintuple production capacity by Q1 2026.

Financial highlights

• Consolidated net sales increased 12% year-over-year to $59.9M, mainly from Canadian and Netherlands cannabis operations.

• Net income was $26.5M ($0.24/share) compared to a $23.5M loss ($0.21/share) in Q2 2024.

• Adjusted EBITDA from continuing operations was $17.1M, up from $2.9M last year; margin rose to 28.6% from 5.4%.

• Gross margin improved to 37% from 25% year-over-year; Canadian cannabis gross margin reached 39%.

• Ended Q2 with $65M in cash and a net cash position of $29M; working capital was $85.8M.

Outlook and guidance

• Expects to sustain gross margin at the upper end of the 30%-40% range, with continued strong international demand and similar sales levels in the second half of 2025.

• Netherlands phase two facility expected operational in Q1 2026, potentially quintupling annual production capacity.

• Delta 2 greenhouse conversion to add 40 metric tons of annual cannabis production by Q1 2027, with a $10M CAD investment.

• Sufficient liquidity and working capital to fund operations and planned capital expenditures for the next 12 months.