Auxly Cannabis Group (XLY) investor relations material

Executive summary

• Achieved record Q2 2026 net revenue of CAD 45.8 million, up 18% year-over-year, driven by strong demand for core products and operational improvements.

• Adjusted EBITDA rose 24% to CAD 14.3 million, representing a 31% margin, with a 94% conversion to cash flow from operations before working capital changes.

• Net income was CAD 7.7 million, essentially flat year-over-year, with underlying growth excluding non-cash fair value adjustments.

• Completed a 14:1 share consolidation in July 2026 to strengthen capital structure and enhance market quality.

• Maintained a 31% EBITDA margin for five consecutive quarters, reflecting structural operating leverage and disciplined cost control.

Financial highlights

• Net revenue reached CAD 45.8 million in Q2 2026, up 18% year-over-year.

• Gross margin on finished cannabis inventory sold improved to 55% from 52% in Q2 2025, reflecting manufacturing efficiencies.

• Adjusted EBITDA was CAD 14.3 million, up 24% year-over-year, with a 31% margin.

• Cash flow from operations before working capital changes was CAD 13.4 million, up 31% year-over-year, with a 94% conversion from adjusted EBITDA.

• Cash and cash equivalents stood at CAD 38.6 million as of June 30, 2026; total assets were CAD 276.2 million.

Outlook and guidance

• 2026 outlook unchanged; expects to grow net revenue above market rates through investments in distribution, innovation, and increased capacity.

• Plans to invest CAD 10–12 million in capital projects in 2026 and up to CAD 30 million through 2028 to increase production capacity by 30% from 2025 levels.

• Yield improvements expected throughout the three-year period, with full completion by end of 2028.

• Innovation and output increases to be funded from operating cash flow, with continued focus on efficiency and cost control.

• Canadian recreational cannabis market expected to benefit from increasing social acceptability and international market opportunities.