Auxly Cannabis Group (XLY) Small Cap Growth Virtual Investor Conference 2025 summary

Company overview and market position

• Operates as a leading Canadian cannabis producer with about 6% market share and a top-selling brand, Back Forty.

• Employs over 400 staff and distributes products to 97% of Canadian retail locations, focusing on dried flower, pre-rolls, and vapes.

• Strategic partnership with Imperial Brands, which owns 20% of shares, supports technology and future international expansion.

• Revenue has grown at a 60% CAGR since 2020, with strong profitability and cash flow.

• Management team has deep industry experience and a history of navigating sector challenges.

Financial performance and capital allocation

• Q3 2025 was a record quarter: CAD 39.9M net revenue (+20% YoY), 56% gross margin, and CAD 12.3M adjusted EBITDA (+48% YoY).

• Net income reached CAD 20.5M, a 500%+ YoY improvement, driven by operational efficiency and product demand.

• Ended Q3 with CAD 30M cash and a net debt-to-EBITDA ratio of 0.6x, reflecting a strengthened balance sheet.

• Generated CAD 35M in cash flow from operations over 12 months, with an 83% EBITDA-to-cash conversion rate.

• Plans for increased CapEx in 2026 to boost throughput and quality, while maintaining strong free cash flow.

Operations, innovation, and product strategy

• Auxly Leamington facility produces 100,000 kg of dried flower annually, with room for expansion on owned land.

• Leverages advanced automation for pre-rolls, resulting in top-selling SKUs and national leadership in non-infused pre-rolls.

• Charlottetown facility drives vape innovation, with Back Forty leading the all-in-one vape segment and ongoing product launches.

• Focuses on continuous product innovation, data-driven consumer insights, and operational excellence to sustain growth.

• Recent launch of Southpoint brand targets premium segment with unique genetics and strong initial sales.