Decibel Reports Third Quarter 2025 Financial Results

Rhea-AI Summary

Decibel Cannabis (OTCQB: DBCCF) reported Q3 2025 net revenue of $32.9M, up 37% YoY, driven by domestic recreational sales of $24.5M and international sales of $8.4M (AgMedica contribution $7.8M). Gross margin before fair value adjustments was 47% (down from 53% in Q3 2024). Adjusted EBITDA was $7.3M (+40% YoY) and adjusted net income was $3.8M. Free cash flow was $1.5M. Management revised 2025 guidance to ~$115M net revenue and ~$24M Adjusted EBITDA, citing German import permitting delays, a B.C. distribution disruption, and contract fee re‑structuring.

Positive

• Net revenue of $32.9M (+37% YoY)
• Adjusted EBITDA of $7.3M (+40% YoY)
• International sales of $8.4M (AgMedica contributed $7.8M)
• Adjusted free cash flow of $5.18M in Q3

Negative

• Gross margin before fair value adjustments declined to 47% from 53% (600 bps)
• 2025 guidance reduced to $115M revenue (from $130M), ~11.5% lower
• German import pause and permitting delays risk timing of German launches
• B.C. distribution disruption (strike) limited retail availability late Sep–Oct

CALGARY, AB, Nov. 19, 2025 /PRNewswire/ - Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSXV: DB) (OTCQB: DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its unaudited interim financial results for the three and nine month periods ended September 30, 2025.

"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 application queue. The Company is still assessing the overall impacts of this issue, which includes delays to the launch of new Decibel products in the German market as well as new commercial contracts being advanced.

(2)  the recent B.C. General Employees' Union strike, which resulted in the B.C. Liquor Distribution Branch cannabis distribution warehouse refusing deliveries from September 23, 2025, to the end of October when the strike ended. This resulted in retailers having limited availability of cannabis products available for sale, including Decibel products during this period of time.

(3)  Structuring of certain contracts reflect a fee per gram structure rather than a full sales price for cannabis products as originally anticipated, thus impacting net revenue and working capital terms, however, this change is not expected to result in a change to gross profit.

Management views these impacts as transitory in nature and/or not disruptive to long term earnings potential. Despite uncertainties relating to working capital which affect the Company's guidance, the Company anticipates 2025 net revenue of approximately $115 million and Adjusted EBITDA of approximately $24 million, compared to original guidance of $130 million and $25 million, respectively.  

Decibel's unaudited condensed consolidated interim financial statements for the three and nine month periods ending September 30, 2025 (the "Financial Statements") and related management's discussion & analysis for the three and nine month periods ending September 30, 2025 ("MD&A") are available on SEDAR+ under the Company's profile at www.sedarplus.ca.

The Company will host a live conference call to discuss the results at 10:00 a.m. MST the same day. The conference call can be accessed by dialing 1-800-715-9871 for Canadian participants and 1-(888)-880-3330 for U.S. participants, referencing conference ID 1629404.

www.decibelcc.com

About Decibel

Decibel is a consumer-focused cannabis company known for premium products that delight customers through innovation and quality. With brands like General Admission, Qwest, and Vox, Decibel's offerings are available across Canada, with expanding reach into global markets. Following the acquisition of AgMedica in Q4 2024, Decibel has added an EU-GMP-certified facility, supporting its commitment to international standards and global distribution growth. Decibel now operates three cultivation facilities and a processing and manufacturing center, positioning the company as a leader in high-quality, globally accessible cannabis products and brands.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statements

Non-GAAP Financial Measures

This news release contains certain financial performance measures, namely Adjusted EBITDA, Adjusted Net Income and Free Cash Flow, that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

		Three months ended		Nine months ended
		September 30		September 30
	2025	2024	2025	2024
(thousands of Canadian dollars)
Net loss and comprehensive loss	(1,340)	(585)	(1,595)	(3,796)
Unrealized gain on changes in fair value of biological assets	(4,463)	(1,201)	(14,142)	(9,108)
Change in fair value of biological assets realized through inventory sold	9,560	3,844	22,794	12,090
Depreciation and amortization	1,676	1,219	4,972	3,640
Share-based compensation (recovery)	478	162	832	(631)
Other (income) loss	(357)	(27)	(364)	134
Finance costs	661	728	2,022	2,253
Foreign exchange loss	115	104	263	189
Non-cash cost of goods sold	680	480	1,989	3,032
Other adjustments	258	483	259	4,933
Adjusted EBITDA	7,268	5,207	17,030	12,736

Adjusted Net Income is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted EPS is a non-GAAP ratio that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. 

These measures are intended to provide a proxy for the Company's net income (loss) and comprehensive income (loss) and are used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

		Three months ended		Nine months ended
		September 30		September 30
	2025	2024	2025	2024
(thousands of Canadian dollars)
Net loss and comprehensive loss	(1,340)	(585)	(1,595)	(3,796)
Unrealized gain on changes in fair value of biological assets	(4,463)	(1,201)	(14,142)	(9,108)
Change in fair value of biological assets realized through inventory sold	9,560	3,844	22,794	12,090
Adjusted net income (loss)	3,757	2,058	7,057	(814)
Weighted average number of shares outstanding	576,861,161	409,039,064	578,985,649	409,039,064
Adjusted EPS	$0.01	$0.01	$0.01	-

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations less cash provided by (used in) investing activities. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management. 

		Three months ended		Nine months ended
		September 30		September 30
	2025	2024	2025	2024
(thousands of Canadian dollars)
Cash provided by (used in) continuing operating activities	1,770	1,960	3,742	(71)
Cash used in investing activities	(237)	(133)	(1,245)	(754)
Free cash flow	1,533	1,827	2,497	(825)

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations plus cash provided by (used in) investing activities, changes in non-cash working capital, less repayment of long-term debt. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management. 

		Three months ended		Nine months ended
		September 30		September 30
	2025	2024	2025	2024
(thousands of Canadian dollars)
Free cash flow	1,533	1,827	2,497	(825)
Cash used in investing activities	237	133	1,245	754
Changes in non-cash working capital	3,890	1,482	8,892	6,621
Repayment of long-term debt	(476)	(714)	(1,994)	(2,081)
Adjusted free cash flow	5,184	2,728	10,640	4,469

Supplementary Financial Measures

International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company's wholesale operations.

Gross Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company's wholesale operations.

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company's wholesale operations.

Forward-Looking Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release.

Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: expectations relating to the scaling of internal sales and management's belief that significant opportunity lies ahead for Decibel's operations; expectations that demand for Decibel's products will grow; the ability of the Company to extend its product offering to new countries and create a global footprint, including anticipation of incremental international volumes and new contracts and the anticipated contributions from these activities, and the timing thereof; Decibel's expectations relating to the impacts from the BfArM import halt and subsequent recommencement, the impacts from the B.C. General Employees' Union strike, and adjustments relating to restructuring of pricing in certain contracts, including management's expectation that these impacts will be transitory in nature and/or not disruptive to long term earnings potential; the Company's marketing efforts and brand expansion, and the expected benefits therefrom; and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections or other factors should they change, except as required by law.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts; capital requirements; construction impacts; the ability to obtain and maintain licences to retail cannabis products; review of the Company's production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; including the imposition of levies and tariffs, and the general impact of such policies on the broader economy; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company's management's discussion and analysis for the year ended December 31, 2024 as well as for the nine months ended September, 2025, which are available under the Company's profile at www.sedarplus.ca.

With respect to forward-looking statements contained in this news release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel 's products; Decibel's ability to enter new markets and industry verticals; Decibel's ability to attract, develop and retain key personnel; Decibel's ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches; Decibel's ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel's industry or the global economy; the Company's ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company's products; anticipated and unanticipated costs; government regulation of the Company's activities and products; the timely receipt of any required regulatory approvals; the Company's ability to conduct operations in a safe, efficient and effective manner; the Company's construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Preliminary Financial Information

Any financial outlook or future oriented financial information (in each case "FOFI") contained in this news release regarding the Company's prospective financial position, including, but not limited to net revenue and Adjusted EBITDA projections relating to the full year 2025 guidance in this news release, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of Company of the relevant information that is currently available.

The Company's expectations for its full year 2025 financial results, including, but not limited to, net revenue, and Adjusted EBITDA assumes, among other things: (i) relative stability in interest rates; (ii) limited relative deterioration in foreign exchange rates due to ongoing and evolving trade and tariff policies; (iii) limited overall impact to the Company's costs resulting from trade and tariff policies; and (iv) limited overall impact to domestic and international demand for our products resulting from the broader economic impacts from trade and tariff policies, and related uncertainty. The actual results will likely vary from the amounts set forth herein and such variations may be material.

The Company's anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of this news release; (ii) are subject to completion review and audit procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company's financial condition as of, and the Company's results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under "Forward-Looking Statements" above. Accordingly, the Company's anticipated financial results for such periods may change upon the completion and approval and audit of the financial statements for such periods and the changes could be material.

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SOURCE Decibel Cannabis Company Inc.

FAQ

What were Decibel (DBCCF) Q3 2025 net revenue and YoY growth?

Decibel reported Q3 2025 net revenue of $32.9M, up 37% year‑over‑year.

How much did international sales contribute to Decibel (DBCCF) in Q3 2025?

International sales were $8.4M in Q3 2025, with $7.8M coming from AgMedica.

What guidance did Decibel (DBCCF) provide for full‑year 2025 on Nov 19, 2025?

The company revised full‑year 2025 guidance to approximately $115M net revenue and $24M Adjusted EBITDA.

Why did Decibel (DBCCF) reduce 2025 revenue guidance on Nov 19, 2025?

Management cited German import permitting delays, a B.C. distribution strike limiting retail availability, and contract fee re‑structuring affecting net revenue timing.

What was Decibel's (DBCCF) Adjusted EBITDA and adjusted net income for Q3 2025?

Q3 2025 Adjusted EBITDA was $7.3M (+40% YoY) and adjusted net income was $3.8M.

Did Decibel (DBCCF) report a change in gross margin in Q3 2025?

Yes; gross margin before fair value adjustments fell to 47% in Q3 2025 from 53% in Q3 2024.