Kits Eyecare (KITS) investor relations material

Executive summary

• Achieved record Q2 revenue of $58.4 million (CAD 58.4 million), up 18% year-over-year, with first half revenue at $115.9 million, up 20.5% year-over-year.

• Net income was $1.5 million, reversing a prior year loss of $0.7 million, and operating cash flow reached a record $7.8 million.

• Glasses revenue surged 54% to $11.1 million, now nearly 19% of total revenue, with premium lens upgrades making up 45.2% of glasses revenue.

• Repeat revenue accounted for $38.3 million (65.5% of total), with the active customer base up 15.2% to 1.14 million.

• Autoship subscription program reached a $24.6 million annualized run rate.

Financial highlights

• Gross profit was $22.2 million with a gross margin of 37.9%, up 160 basis points year-over-year.

• Adjusted EBITDA was $2.9 million (5.0% margin), marking the 15th consecutive positive quarter.

• Free cash flow was $6.4 million, aided by working capital normalization and inventory optimization.

• Marketing expenses rose to 17.4% of revenue, reflecting investment in glasses customer acquisition.

• Ended the quarter with $27.4 million in cash and no debt.

Outlook and guidance

• Q3 revenue projected at $62–64 million, with Adjusted EBITDA margin guidance of 4%–6%.

• Continued momentum expected, with a rebalance toward contact lens acquisition while maintaining glasses growth.

• Ongoing investment in premium lens innovation and retail expansion to drive future growth.