Decibel Cannabis Company (DB) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue reached $21.2 million, up 1.4% year-over-year, driven by AgMedica acquisition contributions of $3.4 million.

• Net Canadian recreational sales declined 8% year-over-year to $19.0 million due to increased competition in infused pre-rolls.

• International sales surged 527% year-over-year to $2.2 million, mainly from AgMedica, though revenue realization lagged due to operational and regulatory delays.

• Gross margin before fair value adjustments improved to 50% from 48% in Q1 2024.

• Adjusted EBITDA was $3.5 million, down 4% year-over-year, impacted by higher SG&A from the AgMedica acquisition.

Financial highlights

• Net revenue: $21.2 million (Q1 2025), $20.95 million (Q1 2024).

• Gross profit before fair value adjustments: $10.6 million (Q1 2025), $10.0 million (Q1 2024).

• Adjusted net loss: $0.1 million, improved by $3.3 million year-over-year.

• Free cash flow: $1.2 million, down $0.7 million year-over-year due to $2.4 million in working capital investments.

• Loss per share: $0.00 (Q1 2025), $0.01 (Q1 2024).

Outlook and guidance

• 2025 full-year net revenue expected at $130 million, driven by international growth.

• Adjusted EBITDA guidance of $25 million, with a focus on cost control and automation.

• Adjusted free cash flow projected at $20 million; debt to adjusted EBITDA ratio targeted below 1.4x.

• Plans to expand exports to 9 markets from 7 currently.