RYTHM (RYM) investor relations material

Executive summary

• Net income for Q1 2026 was $19.9 million, primarily due to a $25.6 million non-cash income tax benefit from the release of a valuation allowance following a licensing agreement amendment.

• Revenue from continuing operations reached $13.3 million, up from $0.5 million year-over-year and 24% sequentially, driven by new licensing revenue streams and increased hemp-derived product sales.

• Gross profit was $10.4 million, representing a 78% margin, up from $90 thousand (17% margin) in Q1 2025 and 75% in the prior quarter.

• Adjusted EBITDA was approximately breakeven, a significant improvement from negative $2.8 million year-over-year.

• Cash and cash equivalents stood at $33.3 million as of March 31, 2026.

Financial highlights

• Revenue increased by $12.7 million year-over-year and 24% sequentially to $13.3 million, with $10.0 million from related parties.

• Net income from continuing operations was $19.9 million, compared to a net loss of $3.3 million in Q1 2025.

• Basic EPS from continuing operations was $1.53; diluted EPS was $1.33.

• Cash flow from operations was $1.0 million for the quarter.

• No significant investing or financing cash flows in Q1 2026.

Outlook and guidance

• Amended licensing agreements to fixed annual fees of $70 million, with annual increases tied to inflation, providing predictable revenue through August 2030.

• Q2 2026 revenue is expected to be approximately $22 million, representing 65% sequential growth.

• Management expects sufficient liquidity for at least 12 months, supported by cash, licensing revenue, and convertible note management.