Village Farms International, Inc. Q2 FY26 Results

Our second quarter results continue to demonstrate the strength of our expanding global cannabis platform, driven by record cannabis revenues of $53.5 million as we continued to grow in target markets and product categories around the world. We delivered our fifth consecutive quarter of positive net income and EPS since we privatized our legacy produce business last year, and important to note that when excluding the one-time $4.3 million vendor settlement received in the second quarter of last year, consolidated adjusted EBITDA increased meaningfully year-over-year to $15.4 million with record Q2 cannabis performance. We’re having a record year of production in our Delta, British Columbia facilities even without including the first harvest we completed in our Delta 2 greenhouse expansion, and record yields combined with greater operating efficiencies have resulted in a lower cost of production. Favorable sales mix also helped drive nine percentage points of cannabis gross margin expansion which translated to strong operating leverage with adjusted EBITDA and net income both meaningfully outpacing total sales growth. We’re continuing to gain traction with our efforts to grow market share in convenience product categories in Canada, where for the first time our brands achieved top 10 market share in all major categories with continued growth in vapes and infused pre-rolls. It was also another record quarter of international export sales, which grew 74% year-over-year and 43% sequentially as we continue to benefit from our competitive advantage with the world’s largest EU-GMP certified cannabis facility. We have a growing share of Europe’s total addressable cannabis market with leading share and distribution in Germany, and we continue to expect that we’ll enter multiple new European jurisdictions later this year. We’re entering the second half of the year in a position of strength, and we’re positioned for continued profitable growth regardless of our entry point and timing into the U.S. market with a global cannabis enterprise that is now approaching 50% of revenues from growing international markets. Our Netherlands operations are expected to ramp to full production capacity by the end of Q1 next year, and our Delta 2 expansion in Canada remains on track to reach its full 40 tonne production run rate by mid-2027, both of which provide us with a clear path for continued long-term organic growth. We closed the second quarter with $73 million in cash, and we continue to expect that we’ll grow our cash balance from positive operating cash flow through the remainder of the year. We’re continuing to evaluate additional organic and acquisitive growth investments around the world, but remain prudent and patient with respect to valuation with a focus on profitability and long-term value creation for our shareholders.