TORONTO, Nov. 12, 2026 /PRNewswire/ -- Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) ("Auxly" or the "Company"), a leading consumer packaged goods company in the cannabis products market, today released its financial results for the three and nine months ended September 30, 2026. These filings and additional information regarding Auxly are available on SEDAR+ at www.sedarplus.ca.
Highlights for the third quarter ended September 30, 2026 (Q3 2026), as compared to the period ending September 30, 2025 (Q3 2025)
- Net revenue of $49.5 million, an increase of 24%
- Gross Margin on Finished Cannabis Inventory Sold remained stable at 56%
- Adjusted EBITDA increased 29% to $15.8 million, representing an Adjusted EBITDA margin of 32%
- Net income of $13.6 million, or $0.13 per basic share and $0.12 per diluted share
- Cash flow from operations before working capital changes of $14.8 million, an increase of 28% and representing a 94% conversion from Adjusted EBITDA.
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
Hugo Alves, CEO of Auxly commented: "Auxly delivered another record quarter in Q3 2026, with strong growth across our key financial measures while maintaining industry-leading profitability. Net revenue increased 24% year-over-year to $49.5 million, Adjusted EBITDA grew 29% to $15.8 million, representing 32% of net revenue, and cash flow from operations before working capital changes increased 28% to $14.8 million. Importantly, we achieved this growth while maintaining a 56% gross margin, demonstrating the strength of our business model and the operating leverage inherent in our platform.
As we look ahead, our priorities remain clear: continue winning in Canada through disciplined innovation and execution, expand the capacity and efficiency of our Leamington facility, and deploy our growing free cash flow toward the opportunities that offer the highest long-term returns. Our investments in Auxly Leamington are designed to support the next phase of Auxly's growth while further improving the quality, efficiency and scalability of our operations. At the same time, the financial strength we have built provides us with flexibility in how we allocate capital and pursue opportunities to create long-term shareholder value. I want to thank our incredible Auxly team, as well as our consumers, partners and shareholders, for their continued trust and support."
Q3 2026 Financial Overview
Net revenue was $49.5 million in Q3 2026 as compared to $39.9 million in Q3 2025, representing an increase of 24%. The growth in net revenue was driven by higher incremental volumes across the core portfolio, improved pricing across the flower portfolio, and partially offset by price compression on vape products.
Gross Margin on Finished Cannabis Inventory Sold remained stable at 56% in Q3 2026, consistent with Q3 2025. The Company continued to benefit from improvements in cultivation and manufacturing processes, strategic procurement initiatives, favourable product mix and lower distillate input costs, partially offset by lower sales volumes and margins in the B2B channel.
Selling, general and administrative expenses were $13.7 million, or 27.7% of net revenue in Q3 2026, compared to $11.6 million, or 29.2%, in Q3 2025. The decrease in SG&A as a percentage of revenue reflects operating leverage over a relatively fixed cost base, partially offset by investments made to support higher sales.
Adjusted EBITDA was $15.8 million in Q3 2026, an improvement of $3.6 million or 29% compared to Q3 2025. Adjusted EBITDA improved primarily as a result of higher gross profit, partially offset by higher selling expenses to support higher net revenue.
Net income was $13.6 million in Q3 2026, a decrease of $6.9 million compared to Q3 2025. Net income in Q3 2025 included an after-tax gain of $8.1 million on the Imperial Debenture Settlement. Excluding the gain on the Imperial Debenture Settlement and the fair value adjustments on biological transformation and inventory, net income increased by $4.4 million, or 70%, primarily due to improved gross profits and Adjusted EBITDA.
Outlook
Auxly remains focused on delivering sustainable, profitable growth by building on its leadership in the Canadian cannabis market. Auxly continues to advance its strategy through focused innovation, operational excellence, and prudent financial management. With a strong balance sheet, we are well-positioned to drive long-term shareholder value.
Auxly expects the Canadian recreational cannabis market will continue to benefit from the tailwinds of increasing social acceptability, capture of market share from the illicit market, the divergence of existing supply to international markets and limited capital availability to the cannabis sector. We believe many of these trends could persist over the long-term.
Auxly continues to see long-term potential in international markets and is actively evaluating export opportunities. We are well positioned to succeed internationally, supported by our strong brands, scalable production, and a strategic partnership with Imperial Brands. Auxly intends to invest in Auxly Leamington over the course of 2026 to prepare and position us for long-term international growth. Our deliberations towards international sales are purposefully rigorous and measured to ensure that international cannabis activities are accretive to profitability and that our focus on winning at home is not compromised.
Auxly believes it can continue to grow net revenue above market rates through product innovation, further investment in distribution and increased capacity at Auxly Leamington. Both innovation and output increases are expected to be funded from operating cash flow for the foreseeable future. Auxly plans to maintain profitability and conversion to cash flow through focused innovation, investment in efficiency and quality, and rigorous cost control.
The Company anticipates total capital investments of up to $30 million through the end of 2028, inclusive of the capital projects in 2026. These investments will be made within Auxly Leamington's existing footprint and are expected to increase production capacity by 30% from 2025 levels to meet growing demand for Auxly's portfolio of brands. The capital projects are also expected to improve efficiency throughout cultivation and processing. Auxly expects to commit between $10 million and $12 million of cash flow from operations towards such capital projects in 2026, with a portion of the associated expenditures expected to occur in the first half of 2027.
Over the long-term, Auxly remains confident in its ability to deepen its leadership position in Canada and make meaningful advances towards our vision of global leadership while maintaining profitability. With its consumer-trusted brands, best-in-class operating assets, national distribution, and data-driven approach to innovation, Auxly is well-positioned to meet evolving consumer preferences and deliver strong financial performance.
Balance Sheet and Capital Allocation
As of September 30, 2026, current assets were $123.5 million, including cash and cash equivalents of $51.4 million. Total Debt outstanding was $43.4 million and total Debt to TTM Adjusted EBITDA was 0.8x. Cash flow from operations before working capital changes was $14.8 million, representing 94% conversion from Adjusted EBITDA.
Total basic and diluted weighted average common shares outstanding for the three months ended September 30, 2026 were 103.1 million shares and 114.4 million shares, respectively.
In the first nine months of the 2026 fiscal year, the Company repurchased 2.7 million shares for total consideration of $6.1 million. The Company has remaining capacity to repurchase common shares under its Normal Course Issuer Bid, which expires on the earlier of April 19, 2027 or the completion of the maximum authorized purchases.
Non- GAAP Measures
EBITDA and Adjusted EBITDA are non-GAAP financial measures used in the cannabis industry and by the Company to assess operating performance removing the impacts and volatility of non-cash and other adjustments. The definition may differ by issuer. EBITDA and Adjusted EBITDA used by the Company are reconciled with net income or loss from continuing operations of the Company, an IFRS measure, in the section "Results of Operations" in the MD&A dated November 11, 2026.
"Gross Margin on Finished Cannabis Inventory Sold" is a supplementary financial measure and is defined as net revenue less cost of finished cannabis inventory sold divided by net revenue. "Gross Profit Margin" is defined as gross profit divided by net revenue. Gross Profit Margin is a supplementary financial measure. "Debt" is defined as current and long-term debt and is a supplementary financial measure. It is a useful measure in managing the Company's capital structure and financing requirements.
Conference Call
Auxly's management team will host a conference call today, Thursday, November 12, 2026, at 10:00 a.m. EST to discuss its financial results. Participants can access the conference call by telephone by dialing: 1-888-699-1199 (conference ID: 60066) or by audio webcast at: https://app.webinar.net/AJoqKOwKarO. For those unable to participate in the conference call at the scheduled time, it will be available for replay on the Company's website within 24 hours after the conclusion of the call.
ON BEHALF OF THE BOARD
"Hugo Alves" CEO
About Auxly Cannabis Group Inc. (TSX: XLY)
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
Financial Highlights and Key Performance Indicators
For the three months ended: September 30, September 30,
(000's) 2026 2025 Change % Change
Net revenue $49,481 $39,898 $9,583 24 %
Gross Margin on Finished Cannabis Inventory Sold* 27,924 22,366 5,558 25 %
Gross Margin on Finished Cannabis Inventory Sold (%)* 56 % 56 % 0 % 1 %
Net income/(loss) 13,614 20,491 (6,877) -34 %
Adjusted EBITDA* 15,831 12,269 3,562 29 %
Weighted average shares outstanding - basic** 103,111,698 95,830,371 7,281,327 8 %
For the nine months ended: September 30, September 30,
(000's) 2026 2025 Change % Change
Net revenue $135,038 $111,369 $23,669 21 %
Gross Margin on Finished Cannabis Inventory Sold* 74,892 58,465 16,427 28 %
Gross Margin on Finished Cannabis Inventory Sold (%)* 56 % 53 % 3 % 6 %
Net income/(loss) 24,781 40,912 (16,131) -39 %
Adjusted EBITDA* 42,362 31,247 11,115 36 %
Weighted average shares outstanding - basic** 101,271,947 94,472,523 6,799,424 7 %
As at: September 30, December 31,
(000's) 2026 2025 Change % Change
Cash and cash equivalents $51,420 $32,279 $19,141 59 %
Total assets 289,557 271,636 17,921 7 %
Debt* 43,402 46,279 (2,877) -6 %
*Non-IFRS or supplementary financial measure. Refer to the Non-GAAP Measures section for definitions.
**Weighted average shares outstanding have been adjusted to reflect the effect of 14:1 Share Consolidation effective July 28, 2026.
Results of Operations
For the periods ended: Three months September 30, Nine months September 30,
(000's) 2026 2025 2026 2025
Revenue
Revenue from sales of cannabis products $76,867 $59,363 $207,372 $167,699
Excise taxes (27,386) (19,465) (72,334) (56,330)
Total net revenue 49,481 39,898 135,038 111,369
Costs of sales
Costs of finished cannabis inventory sold 21,557 17,532 60,146 52,904
Inventory impairment 137 235 1,551 505
Gross profit/(loss) excluding fair value items 27,787 22,131 73,341 57,960
Unrealized fair value gain/(loss) on biological transformation 14,433 18,093 36,794 46,247
Realized fair value gain/(loss) on inventory (11,552) (12,071) (37,293) (34,682)
Gross profit 30,668 28,153 72,842 69,525
Expenses
Selling, general, and administrative expenses 13,710 11,641 37,626 31,628
Equity-based compensation 1,359 1,293 3,808 3,890
Depreciation and amortization 1,170 1,224 3,592 3,796
Interest and accretion expenses 985 1,423 3,148 5,436
Total expenses 17,224 15,581 48,174 44,750
Other income/(loss)
Interest and other income 75 26 403 105
Gain/(loss) on settlement of assets and liabilities and other expenses 6,775 1 6,571
Foreign exchange gain/(loss) 95 (95) (291) 123
Total other income/(loss) 170 6,706 113 6,799
Net income/(loss) before income tax 13,614 19,278 24,781 31,574
Income tax recovery/(expense) 1,213 9,338
Net income/(loss) $13,614 $20,491 $24,781 $40,912
Adjusted EBITDA $15,831 $12,269 $42,362 $31,247
Net income/(loss) per common share - basic* $0.13 $0.21 $0.24 $0.43
Net income/(loss) per common share - diluted* $0.12 $0.18 $0.22 $0.36
Weighted average shares outstanding - basic* 103,111,698 95,830,371 101,271,947 94,472,523
Weighted average shares outstanding - diluted* 114,369,564 114,691,081 112,432,621 112,229,756
*Weighted average shares outstanding have been adjusted to reflect the effect of 14:1 Share Consolidation effective July 28, 2026.
EBITDA and Adjusted EBITDA Reconciliation
($'000's) Q4/24 Q1/25 Q2/25 Q3/25 Q4/25 Q1/26 Q2/26 Q3/26
Net income/(loss) 4,423 12,111 8,310 20,491 943 3,466 7,701 13,614
Interest and accretion expenses 2,291 2,147 1,866 1,423 1,222 1,092 1,071 985
Interest and other income (27) (47) (32) (26) (25) (58) (270) (75)
Income tax expense/(recovery) (8,125) (1,213)
Depreciation and amortization 1,338 1,274 1,785 1,544 1,844 1,768 1,711 1,617
included in cost of sales
Depreciation and amortization 990 1,296 1,276 1,224 1,204 1,218 1,204 1,170
included in expenses
EBITDA 9,015 8,656 13,205 23,443 5,188 7,486 11,417 17,311
Impairment of inventory 729 123 147 235 364 234 1,180 137
Unrealized fair value loss/(gain) on (11,073) (12,312) (15,842) (18,093) (10,857) (9,758) (12,603) (14,433)
biological transformation
Realized fair value loss/(gain) on inventory 11,625 9,337 13,274 12,071 15,911 13,086 12,655 11,552
Restructuring and acquisition costs 271
Equity-based compensation 1,103 1,505 1,092 1,293 1,830 1,011 1,438 1,359
Non-recurring expense/(recovery) (193) (217)
Loss/(gain) on settlement of assets, (1,461) (39) 243 (6,775) 245 (1)
liabilities and disposals
Foreign exchange loss/(gain) 797 163 (381) 95 76 197 189 (95)
Adjusted EBITDA 11,006 7,433 11,545 12,269 12,540 12,256 14,275 15,831
Notice Regarding Forward Looking Information:
This news release contains certain "forward‐looking information" within the meaning of applicable Canadian securities law. Forward‐looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward‐looking information throughout this news release. Forward‐looking information includes, but is not limited to: the proposed operation of Auxly, its subsidiaries and partners; the intention to grow the business, operations and existing and potential activities of Auxly; proposed timelines for the build‐out, expansion, licencing or commercialization of the Company's facilities and projects; the Company's execution of its innovative product development, commercialization strategy and expansion plans; the Company's intention to introduce innovative new cannabis products to the market and the timing thereof; the anticipated benefits of the Company's partnerships, research and development initiatives and other commercial arrangements; the expectation, timing and quantum of future revenues, Gross Margin on Finished Cannabis Inventory Sold, SG&A and of positive Adjusted EBITDA; expectations regarding the Company's expansion of sales, operations and investment into foreign jurisdictions; future legislative and regulatory developments involving cannabis and cannabis products; the timing and outcomes of regulatory or intellectual property decisions; the ability of the Company to maintain and grow its market share; the impact of the Share consolidation on future trading price, liquidity, marketability or attractive of the Shares; the relevance of Auxly's subsidiaries' current and proposed products with provincial purchasers and consumers; consumer preferences; political change; competition and other risks affecting the Company in particular and the cannabis industry generally.
A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward‐looking information in this release including, but not limited to, whether: the Company will be able to execute on its business strategy or achieve its goals; Auxly's subsidiaries are able to maintain the necessary governmental and regulatory authorizations to conduct business; the Company is able to successfully manage the integration of its various business units with its own; the Company's subsidiaries obtain and maintain all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the Company will be able to increase and maintain revenues, maintain positive Adjusted EBITDA, and/or achieve and maintain its target Gross Margin on Finished Cannabis Inventory Sold; the market price of the Shares following the Share consolidation may not increase proportionally to the consolidation ratio; there can be no assurance that the Share consolidation will achieve the Company's intended objectives, including improving the trading price, liquidity, marketability or attractiveness of the Shares; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company's costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2025 dated March 25, 2026.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information. The forward‐looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward‐ looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward‐looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward‐looking information contained in this release.
The forward‐looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward‐ looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
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SOURCE Auxly Cannabis Group Inc.
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