Kits Eyecare (KITS) Q4 2025 earnings summary

Executive summary

• Achieved record annual revenue of CAD 202.5 million, up 27% year-over-year, and record Q4 revenue of CAD 53.9 million, up 20% from Q4 2024.

• Delivered 13 consecutive quarters of positive adjusted EBITDA, with annual adjusted EBITDA of CAD 11.7 million, up 82.6% year-over-year.

• Surpassed 1 million active customers, adding 393,000 new customers in 2025; repeat customers accounted for 66% of Q4 revenue, up from 62% in Q3.

• Net income for 2025 was CAD 3.1 million (CAD 0.10 per basic share); Q4 net income was CAD 0.3 million (CAD 0.01 per share).

• AI glasses and technology integration, including OpticianAI, are significant growth vectors, with AI glasses AOV over 3x regular glasses.

Financial highlights

• Full-year gross profit grew 34% to CAD 72.1 million, with gross margin expanding 190 bps to 35.6%; Q4 gross profit was CAD 18.8 million (35% margin), up 16% year-over-year.

• Full-year operating cash flow was CAD 11.5 million, nearly matching adjusted EBITDA, indicating strong cash conversion.

• Ended 2025 with CAD 29.8 million in cash and cash equivalents, the strongest liquidity position to date.

• Working capital more than doubled to CAD 15.3 million, and the company ended the year with zero long-term debt.

• Marketing spend was 16.3% of revenue in Q4, acquiring 88,500 new customers.

Outlook and guidance

• Q1 2026 revenue is targeted at CAD 58–60 million, with CAD 10.5 million from glasses and CAD 48 million from contact lenses; gross margin expected at approximately 35%.

• Priorities include accelerating glasses and AI glasses growth, strengthening contact lens retention, expanding prescription offerings, and further integrating OpticianAI.

• Reaffirmed financial guidance for Q1 2026 and anticipates continued growth with the opening of a second flagship showroom in Toronto.