#Canada #Toronto #financial results #Cannabis Products #Auxly Cannabis Group

Auxly Reports Second Quarter 2025 Results

Auxly Cannabis Group Inc. released its financial results for the second quarter of 2025, showcasing substantial growth in both revenue and profitability. With net revenues soaring to $38.8 million, marking a year-over-year increase of 33%, Auxly has solidified its position as a leading player in the Canadian cannabis market.

Financial Highlights of Q2 2025

During the quarter, Auxly demonstrated impressive financial metrics:

• - Gross Margin on Finished Cannabis Inventory Sold reached 52%, a notable improvement from 41% in the previous year’s second quarter.
• - Selling, General and Administrative Expenses (SGA) were reported at $10.3 million, reflecting an 11% increase from the previous year, driven by investment in sales and marketing to support revenue growth.
• - Adjusted EBITDA marked an outstanding figure of $11.6 million, equivalent to 30% of net revenue, showcasing a year-over-year increase of 123%.
• - Net Income surged to $8.3 million, representing an incredible increase of 315% compared to Q2 2024.
• - The company's operational cash flow stood at $4 million, with cash reserves totaling $17 million by the quarter end.

Strategic Initiatives Post-Quarter

In an effort to enhance its balance sheet, Auxly executed several strategic initiatives:

• - The company amended its senior debt agreements, extending maturity and securing an additional $10 million in credit facilities.
• - A notable shift occurred when Imperial Brands converted its remaining debt into equity, underscoring the partnership’s strength and long-term commitment to Auxly.
• - With a pro forma Total Debt to TTM Adjusted EBITDA ratio of just 1.4x, Auxly is positioned well for future financial maneuverability.

Commercial Performance Highlights

Alongside financial successes, Auxly's product lines have shown remarkable market performance:

• - Auxly is now the third-largest Licensed Producer in Canada with a 6.2% market share.
• - The Back Forty brand emerged as the top cannabis brand in Canada.
• - Liquid Imagination and Fire Breath 28g dominated sales rankings, becoming the top two best-selling products nationally.
• - Auxly leads the all-in-one vape category, capturing 12 of the top 15 SKU slots in the market.
• - Maintaining its status as the number one non-infused pre-roll brand in Ontario reflects consumer trust in Auxly products.

Management Insights

CEO Hugo Alves shared insights on achieving such robust results, stating, "Despite this record-breaking quarter, we believe we are just getting started. The notable increase in net revenue signifies growing demand, enhanced distribution across Canada, increased production volumes, and favorable pricing shifts. Our brands enjoy customer love and trust, which is paramount for market share growth."

He continued, "Improving our gross margin to 52% and achieving a stable cost base has allowed us to realize a solid adjusted EBITDA margin of 30%. With recent recapitalization efforts reducing our debt obligations and interest expenses, we look forward to innovating further in our product offerings and leveraging our market position for sustainable financial success."

Future Growth Strategy

Anticipating continued growth, Auxly is focusing on maintaining its industry leadership.
The company expects the Canadian recreational cannabis market to continue expanding, benefiting from increased societal acceptance and diminishing competition from the illicit market. Auxly plans to utilize its strong operational efficiencies and strategically innovation-driven product development to capture significant market share.

In 2025, Auxly will allocate between $1.5 million to $2.5 million of cash flow from operations towards enhancing its facilities in Leamington and Charlottetown, with surplus cash directed towards strengthening its balance sheet.

In summary, with strong financial health and a well-defined growth strategy, Auxly Cannabis Group is well-equipped to address evolving consumer preferences and promote sustainable profitability in the cannabis industry. As it steers towards the future, Auxly remains committed to delivering high-quality, consumer-trusted cannabis products.

For more information, visit Auxly's website, and stay connected through their social platforms.