VANCOUVER, British Columbia — Village Farms International Inc. reported financial results for its second quarter ended June 30, 2025. All figures are in U.S. dollars unless otherwise indicated.
The Company’s second quarter 2025 results reflect the May 30, 2025 closing of its previously-announced, transformative transaction to privatize certain assets and operations of its Produce segment through the formation of a new entity backed by private investment firms. In connection with the Transaction, the Company received $40 million in cash, subject to working capital adjustments, and common units representing a 37.9% equity ownership interest in Vanguard Food LP. As a result of the Transaction, operations which were privatized are now classified as discontinued operations and the reported financial results for comparative prior periods have been adjusted accordingly.
Management Commentary
“Our second quarter results demonstrate the improving earnings potential of Village Farms and our continued success in scaling a profitable global cannabis enterprise,” said President and Chief Executive Officer Michael DeGiglio. “Second quarter performance reflected record levels of profitability since we expanded into cannabis in 2017, and eclipsed several records set during our nearly 20-year history as a publicly traded company. Our teams are excelling during a period of rapid change for the organization, and energized by the many pockets of upside opportunity that we see across virtually every aspect of our business.
“The recent closing of our produce transaction has coincided fortuitously with several other powerful catalysts, including our commencement of sales in Holland’s adult-use market, success of our recent initiatives to align our product portfolio toward higher-margin SKUs, and a continuing wave of additional countries around the world following Canada’s lead with pragmatic approaches to regulating cannabis. We are proud to be part of an emerging, vibrant global cannabis ecosystem, proud to be leveraging our 36-years in controlled environment agriculture to become a partner of choice in the cannabis community, and proud to be in a leadership position that enables us to self-fund an additional 40 metric tons of annual cultivation capacity to serve our Canadian and international customers.
“While we are benefiting from multiple catalysts unlocking value for our stakeholders, we continue to see meaningful potential for additional long-term value creation through our ownership interest in our newly formed produce entity and future optionality of our U.S. based greenhouse assets and operations. We believe the trends observed in our business during the second quarter are sustainable, and that our capacity expansion projects in Canada and the Netherlands position us for continued profitable growth in 2026 and beyond. We are growing organically, profitably and generating positive free cash flow, and we believe the strength of our balance sheet will enable us the flexibility to make additional growth investments that will drive strong returns for shareholders.”
Second Quarter 2025 Financial Highlights
All comparable periods are for the second quarter of 2024 unless otherwise stated.
Consolidated
- Consolidated net sales increased 12% to $59.9 million from $53.6 million;
- Consolidated net income from continuing operations was $9.9 million, or $0.09 per share compared to a net loss of $16.6 million, or ($0.15) per share;
- Consolidated net income was $26.5 million, or $0.24 per share compared to net loss of $23.5 million, or ($0.21) per share;
- Year-to-date consolidated cash flow from continuing operations was $22.3 million compared with ($3.7 million).
- Consolidated adjusted EBITDA from continuing operations (a non-GAAP measure) was $17.1 million compared with $2.9 million; and,
- Consolidated adjusted EBITDA margin from continuing operations (a non-GAAP measure) of 28.6%, an increase of 2,320 basis points compared to 5.4%.
Canadian Cannabis
- Net sales increased 9% to $44.5 million (C$61.4 million) from $40.7 million (C$55.8 million);
- International medical export sales increased 690%, retail branded sales decreased 20% due to a planned mix shift toward higher-margin products, and non-branded (wholesale) sales decreased 15% (in Canadian dollars);
- Gross margin increased to 39% from 26%, due primarily to the increase in international sales;
- Net income increased 369% to $6.5 million (C$9.1 million) from $1.4 million (C$1.9 million);
- Adjusted EBITDA increased 146% to $11.9 million (C$16.5 million) from $4.8 million (C$6.6 million); and,
- Cash flow from operations increased 233% to $18.0 million (C$24.6 million) from $5.4 million (C$7.2 million).
U.S. Cannabis (Balanced Health Botanicals)
- Net sales were $3.8 million compared with $4.3 million;
- Gross margin increased to 63% from 61%;
- Net loss was $0.2 million compared with a net loss of $12.3 million; and
- Adjusted EBITDA was $45,000 compared with ($0.2 million).
Netherlands Cannabis (Leli Holland)
Leli Holland commenced sales during the first quarter of 2025. Leli Holland was not operational during the comparable quarter of 2024. As a result, comparative financial performance to the prior-year quarter is not meaningful.
- Net sales were $2.5 million;
- Net income was $0.8 million; and
- Adjusted EBITDA was $1.2 million.
Village Farms Produce
- Continuing sales increased 2% to $8.6 million from $8.4 million;
- Net income from continuing produce operations improved to $4.3 million from a loss from continuing produce operations of $1.3 million, due to a vendor settlement in the second quarter of 2025 related to a partial recovery of operating losses from the Tomato Brown Rugose Fruit Virus (“ToBRFV”) infestation;
- Adjusted EBITDA from continuing produce operations improved to $6.4 million from $0.1 million for the quarter ended June 30, 2024 due to both a vendor settlement and improved continuing produce operations.
Strategic Growth and Operational Highlights
Canadian Cannabis
- Company has maintained a top three overall market share position in Canada and the number one position in dried flower year-to-date through the month of July, despite planned reductions in sales of lower-margin SKUs;
- Achieved the high end of its targeted gross margin range of 30-40% for the second consecutive quarter, and its strongest adjusted EBITDA performance in six years;
- Refinanced its syndicated Canadian Cannabis Term Loans, consolidating three previous loans into one credit facility with two of its existing lenders. The new credit facility carries a variable interest rate below 6.0 percent, reflecting a 250 basis point improvement to the previous interest rate, as well as improved financial covenants and a maturity date of February 7, 2028, replacing its previous credit facilities maturing on February 7, 2026;
- Subsequent to quarter end, published groundbreaking peer-reviewed research in Scientific Reports (Nature Portfolio), highlighting the natural variability of THC potency within cannabis plants, reinforcing a need for a greater focus on product quality versus potency and more transparent and accurate labelling across the industry;
- Subsequent to quarter end, the Company launched innovative new windowed packaging for its flower products in the Canadian market, enabling consumers to see product quality in the package before purchase;
- Subsequent to quarter end, the Company announced that its Board of Directors unanimously approved an investment to expand cannabis cultivation capacity in its Delta 2 greenhouse in order to meet increasing demand in Canadian and International markets. The expansion will be funded with existing cash on hand, and is expected to yield an incremental 40 metric tons of annualized cannabis production.
International Cannabis (Reported within Canadian Cannabis)
- International export sales increased 690% year-over-year in the second quarter and 116% sequentially, driven by new customer relationships as well as increased sales from existing customers;
- The Company achieved its previous full-year sales target for International export sales during the first six months of the year, and expects similar international export sales performance in the second half of 2025 as compared to the first half of the year;
- Company continues to distribute several leading cultivars in Germany through third-party partners
Netherlands Cannabis (Leli Holland)
- Operations in the Company’s Phase I facility in Drachten continued to ramp toward full capacity during the second quarter, while demonstrating strong profitability and cash flow generation;
- Leli Holland products are now represented in 66 of 80 participating coffeeshops, representing market penetration of 82.5%;
- The Company has continued to introduce new product categories into the market and expects to launch hash products during the fourth quarter;
- Construction of the Company’s Phase II facility in Groningen remains on track to be operational in Q1 2026;
- Once completed, the Phase II facility is expected to quintuple total annualized production capacity.
U.S. Cannabis
The Company’s application for a Texas medicinal marijuana license remains pending review by the Department of Public Services. If awarded, the Company plans to work with its listing authority to structure an acceptable ownership structure and comply with all applicable regulatory requirements.
Village Farms Produce
On May 30, 2025 the Company closed on the previously-announced transaction to privatize certain assets and operations of its Produce segment. Under the terms of the agreement, the Company privatized Produce segment operations, including its Marfa II, Marfa I and Fort Davis greenhouses, and all of its produce distribution centers, as well as its third party produce distribution business, through a series of asset and lease transfers, for total consideration of $40 million and a 37.9% equity ownership interest in Vanguard Food LP, a new, private-equity-backed partnership.
During the second quarter, the Company entered into service and supply agreements with Vanguard Fresh Canada ULC for produce production in its Delta 1 and Delta 2 greenhouses, which will continue supplying produce to Vanguard for a multi-year term. The Delta 1 and Delta 2 greenhouses generated approximately $29 million in produce sales in fiscal year 2024. The Company’s Produce segment financial results are now predominantly comprised of activities related to operation of the Delta 1 and Delta 2 greenhouses. Following completion of the 2025 tomato crop, the Delta 2 greenhouse will no longer supply produce to Vanguard.
Corporate
- During the second quarter, the Company regained compliance with the Nasdaq minimum closing bid price of US$1.00 per share listing requirement (NASDAQ Listing Rule 5550(a)(2));
- Subsequent to quarter end, appointed Michael Carey as Corporate Treasurer.
About Village Farms International Inc.
Village Farms leverages decades of experience in Controlled Environment Agriculture as a large-scale, vertically-integrated supplier of high-value, high-growth plant-based Consumer Packaged Goods. In Canada, the Company’s wholly owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world (2.2 million square feet of greenhouse production). The Company also owns 80% of Québec-based, Rose LifeScience, a leader in the commercialization of cannabis products.
The Company exports medical cannabis from its EU GMP certified facility in Canada to international markets including Germany, the United Kingdom, Israel, Australia, and New Zealand. The Company is expanding its export business to new countries and customers, and making select investments in international production assets. In Europe, wholly-owned Leli Holland has one of 10 licenses to grow and distribute recreational cannabis within the Dutch Coffee Shop Experiment.
In the US, wholly-owned Balanced Health Botanicals is one of the leading CBD and hemp-derived brands and e-commerce platforms in the country.
