"Our results this quarter build on the continued momentum in 2025, proving that Decibel's strategy is working. International demand continues to outpace supply, our partnerships are expanding and our domestic business has never been stronger. With premium products gaining traction globally and our execution capabilities proven, we believe Decibel is only at the beginning of its growth trajectory." Benjamin Sze, Chief Executive Officer
Third Quarter Highlights
Net Revenue was $32.9 million, a year over year increase of 37%. Net revenue growth in the quarter was primarily a result of contributions from AgMedica Bioscience Inc. ("AgMedica") which accelerated international sales, coupled with modest net Canadian recreational sales growth. Total sales contributed from AgMedica were $7.8 million, of which the entirety were international sales.
Net Canadian Recreational Sales were $24.5 million, a year over year increase of 3%. The increase in net Canadian recreational sales was driven by successful initiatives including: new marketing campaigns, reinvesting in growing the Qwest brand presence, launching ultra high potency vapes and infused pre-rolls, new large format all-in-one disposable, and milled flower.
International Sales were $8.4 million, a quarter over quarter increase of 37%. The increase in international sales was primarily driven by the contributions from AgMedica. Total international sales contributed from AgMedica were $7.8 million.
Gross Margin Before Fair Value Adjustments was 47% in the third quarter of 2025, compared to 53% in the third quarter of 2024. The change is largely attributable to a lower gross margin on international sales, due in part to higher testing costs and product types, which is consistent with expectations.
Adjusted EBITDA(1) of $7.3 million, a year over year increase of 40%. The increase in Adjusted EBITDA for the quarter was primarily driven by international sales and net Canadian recreational sales growth.
Free Cash Flow(1) of $1.5 million, a year over year decrease of $0.3 million. The decrease in Free Cash Flow is primarily attributable to strong growth in net revenue, partially offset by changes in non-cash working capital as the Company positions itself for anticipated growth.
Adjusted Net Income(1) of $3.8 million, a year over year increase of $1.7 million. Adjusted Earnings per Share was $0.01, an improvement of $0.01 year over year.
Notes:
1
Non-GAAP financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details.
Summary Highlights
Three months ended
Nine months ended
September 30
September 30
2025
2024
2025
2024
(thousands of Canadian dollars, except where noted)
Gross Canadian recreational sales1
$38,970
$36,587
$106,587
$102,534
Net Canadian recreational sales1
$24,505
$23,800
$67,212
$66,524
International sales1
$8,407
$309
$16,783
$701
Total
Gross revenue
$47,377
$36,896
$123,370
$103,235
Net revenue
$32,912
$24,109
$83,995
$67,225
Gross profit before fair value adjustments
$15,360
$12,716
$39,981
$32,031
Gross margin before fair value adjustments
47 %
53 %
48 %
48 %
Adjusted EBITDA3
$7,268
$5,207
$17,030
$12,736
Net loss and comprehensive loss
($1,340)
($585)
($1,595)
($3,796)
Adjusted net income (loss)3
$3,757
$2,058
$7,057
($814)
Cash flow from operations
$1,770
$1,960
$3,742
($71)
Free cash flow2, 3
$1,533
$1,827
$2,497
($825)
Adjusted free cash flow2, 3
$5,184
$2,728
$10,640
$4,469
Per Share Metrics
Income (loss) per share
-
-
-
-
Adjusted EPS3
$0.01
$0.01
$0.01
-
1
Supplementary financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details.
2
Refer to "Cash Flows" in the MD&A (as defined herein) for further details.
3
Non-GAAP financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details.
2025 Updated Guidance
The Company is revising its previously given guidance relating to full year 2025 net revenue and Adjusted EBITDA due to the following factors:
(1) the German Federal Institute for Drugs and Medical Devices ("BfArM") halting approval of imports of cannabis in October 2025 as the original 122 tonnes limit was exhausted. The BfArM has subsequently raised the cannabis import limit to 192.5 tonnes and begun granting permits at the end of October based on the ...
