CALGARY, AB – Decibel Cannabis Company Inc., a manufacturer of cannabis and extract products, reported its unaudited interim financial results for the three month period ending March 31, 2025.
“Our first quarter demonstrates progress on multiple fronts. AgMedica has been accretive since day one, and we expect it to accelerate as our strong pipeline activates in Q2 and beyond. Domestically, our renewed focus on innovation—particularly in vapes, milled flower, and ultra high potency formats—is gaining traction and helping to reverse prior market share softness. Importantly, we also reduced our payables this quarter, strengthening our balance sheet and reinforcing our focus on free cash flow and sustainable growth,” said Chief Executive Officer Benjamin Sze.
2025 Full Year Expectations
- Net Revenue of $130 million driven by continued international growth.
- Adjusted EBITDA of $25 million with continued cost focus and automation.
- Adjusted Free Cash Flow of $20 million to continue strengthening balance sheet.
- Debt to Adjusted EBITDA ratio of <1.4x continuing progress in deleveraging.
- Increase export to 9 markets from presence in 7 currently.
First Quarter Highlights
Net Revenue was $21.2 million, a year over year increase of 1.4%. Net revenue growth in the quarter was primarily a result of contributions from AgMedica Bioscience Inc. (“AgMedica”), acquired on October 28, 2024. Total sales contributed from the acquisition were $3.4 million.
Balance Sheet continued to improve as the Company reduced accounts payables by $2.5 million and debt by $0.8 million. This resulted in Q1 cash dropping quarter over quarter by roughly $2.5 million. Decibel maintains a commitment towards strengthening its balance sheet with an expectation to significantly improve our cash position as our international contributions ramp up.
Net Canadian Recreational Sales were $19.0 million, a year over year decrease of 8%. The decrease in net Canadian recreational sales is primarily attributable to increased competition in infused pre-roll products. During the first half of 2025, the Company launched additional products and undertook a marketing campaign to combat declines in these segments and grow in other categories, including: a proudly Canadian campaign, reinvesting in growing the Qwest brand presence, launching ultra high potency vapes and infused pre-rolls, new large format all-in-one disposable vapes, and milled flowers. Early sell-through data and retailer feedback indicate strong momentum, with signs of market share growth.
International Sales were $2.2 million, a year over year increase of 527%. The increase in international sales was primarily driven by the contributions from AgMedica. Total international sales contributed from AgMedica were $2.0 million. While the Company has secured a growing pipeline of export contracts, revenue realization from these agreements has trailed expectations due to operational delays and regulatory complexities in certain markets. Decibel expects international volumes to grow meaningfully beginning in Q2 of 2025 as key contracts come online.
Gross Margin Before Fair Value Adjustments was 50% in the first quarter of 2025, compared to 48% in the first quarter of 2024.
Adjusted EBITDA of $3.5 million, with a year over year decrease of 4%. The decrease in Adjusted EBITDA for the quarter was primarily from higher SG&A from the AgMedica acquisition, partially offset by improved gross margin.
Free Cash Flow of $1.2 million, with a year over year decrease of $0.7 million. The decrease in Free Cash Flow was attributable to working capital investments of $2.4 million.
Adjusted Net Loss of $0.1 million, a year over year increase of $3.3 million.
As of March 31, 2025, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.
About Decibel
Decibel is a consumer-focused cannabis company. 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.
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