Leef Brands (LEEF) Q3 2025 earnings summary

Executive summary

• Achieved a key inflection point with a vertically integrated model in California and rapid expansion into New York, driving improved revenue, profitability, and cash flow in Q3 2025.

• Revenue grew 24% year-over-year to $8.4 million, driven by increased California market share and new sales in New York.

• Gross margin more than doubled to 45% from 22% year-over-year, reflecting lower input costs and higher-margin sales.

• Completed first harvest at Salisbury Canyon Ranch, exceeding yield and quality expectations, supporting in-house cultivation and extraction.

• Launched New York operations in record time, with all 2025 output pre-sold and high-margin sales underway.

Financial highlights

• Q3 2025 revenue was $8.4 million, up 24% year-over-year, but down 4% sequentially due to seasonal softness.

• Gross profit rose to $3.8 million, up 155% year-over-year and 80% sequentially; gross margin expanded to 45% from 22% a year ago.

• Operating expenses declined by 12% year-over-year and sequentially, totaling $3.9 million.

• Adjusted EBITDA was $736,000, improving by $3.1 million year-over-year and $2 million sequentially.

• Free cash flow turned positive at $0.2 million, compared to ($0.3) million a year ago.

Outlook and guidance

• Expect significant upside in Q4 2025 and into 2026 as more of the farm’s output is processed and New York’s hydrocarbon line comes online.

• Plan to expand into one new state every 12-24 months, focusing on markets with strong growth, reliable supply, and established sales channels.

• Monitoring federal reform, with potential rescheduling or descheduling of cannabis seen as a major catalyst for the industry.