cbdMD (YCBD) investor relations material

Executive summary

• Net sales increased 19% year-over-year to $5.6 million for Q2 FY2026, driven by core business momentum and the Bluebird Botanicals acquisition, with direct-to-consumer and wholesale channels both contributing.

• Bluebird Botanicals integration completed, generating positive income by March and expected to further contribute in upcoming quarters.

• Operating loss widened to $801,000 from $485,000 year-over-year, reflecting higher expenses including acquisition and integration costs.

• The company is investing in the CMS Substance Access/BEI Medicare pathway, positioning for long-term growth in the Medicare channel.

• Management remains focused on cost controls, product innovation, and expanding distribution channels to drive profitability.

Financial highlights

• Gross margin was 58% (down from 62% year-over-year), mainly due to increased wholesale mix and compliance costs.

• Net loss attributable to common shareholders was $0.88 million ($0.08/share), improved from $1.5 million ($1.90/share) year-over-year.

• Adjusted non-GAAP EBITDA loss was $220,000, impacted by Bluebird acquisition costs and CMS BEI program investment.

• Cash and cash equivalents were $2.6 million at March 31, 2026, with working capital of $5.4 million.

• Cash used in operations was $723,000, reflecting accounts receivable and inventory build to support growth.

Outlook and guidance

• Management expects Bluebird Botanicals to become accretive to earnings in Q3 as integration completes and synergies are realized.

• Continued investment in the CMS BEI program, with revenue contribution expected to build over the next 12–18 months.

• Early phase of BEI Medicare pathway expected to be implementation-led, with adoption visibility in the second half of 2026.

• Ongoing focus on disciplined expense management, margin improvement, and sustainable profitability.

• Break-even quarterly revenue modeled well below $7 million.