Auxly Cannabis Group (XLY) Q2 2025 earnings summary

Executive summary

• Achieved record net revenue of $38.8M in Q2 2025, up 33% year-over-year, with a 30% Adjusted EBITDA margin and eight consecutive quarters of positive Adjusted EBITDA.

• Net income for Q2 2025 was $8.3M, a 315% increase year-over-year, with six-month net income of $20.4M, reversing a $24.0M loss in the prior year.

• Back Forty became the #1 cannabis brand in Canada, with leadership in pre-rolls, vapes, and flower.

• Strong operational foundation with coast-to-coast reach, 410 employees, and presence in 10 provinces and 2 territories.

• Recognized for innovation, winning "Innovation of the Year 2024."

Financial highlights

• Gross margin for Q2 2025 was 58.5%, up from 54.6% in Q2 2024; gross margin on finished cannabis inventory sold improved to 52% from 41%.

• Adjusted EBITDA for Q2 2025 reached $11.6M (30% margin), a 123% increase year-over-year; net income was $8.3M, up 315%.

• Cash flow from operations in Q2 2025 was $4M, up from $2.9M in Q2 2024; cash at quarter end totaled $17M.

• For the six months ended June 30, 2025, net revenues were $71.5M, up 31% year-over-year.

• Total assets were $258.5M at June 30, 2025, with total liabilities of $121.1M and equity of $137.4M.

Outlook and guidance

• Expects continued net revenue growth in H2 2025, supported by demand, innovation, and operational efficiencies.

• Rising wholesale cannabis prices and a shortage of high-quality, high-potency flower are expected to support growth and pricing power into 2025.

• Global export volumes grew 48% in 2024 and are expected to increase further in 2025.

• Ongoing investments in automation and efficiency are expected to drive sustainable profitability.

• Plans to allocate $1.5M–$2.5M of operating cash flow to capital projects in 2025, with excess cash for balance sheet strengthening or strategic initiatives.