Vext Science Earnings + Call Notes
Arizona outperforms, Ohio heating up.
$12.7M Revs; est. $13M
$2.1M AEBITDA; est. $4.1M
$4M GP; est. $5.5M
31.3% GM; est. 42%
Revenue of $12.7 million, up 41% YoY.
^ driven by expanded Ohio retail operations, resilient performance in Arizona.
YTD operating cash flow of $8.5M
^ compared to $(0.7) million in Q324 YTD.
Strengthened Ohio retail footprint to five consolidated locations.
On track to reach the state dispensary license cap of eight in 2026.
^ positions Vext to capture sustained growth from growing AU market in Ohio.
Management Commentary
“Vext delivered another solid quarter, with revenue of $12.7 million, up 41% year-over-year, and year-to-date operating cash flow of $8.5 million. Even with mixed market dynamics during the quarter, our operational discipline remained evident.
Ohio continued to be a growth engine for Vext, with our expanded retail footprint and higher-margin channel mix contributing to meaningful year-over-year gains.
In Arizona, our disciplined operations enabled us to continue to outperform state averages on a per-store basis and deliver steady performance despite a broader market decline.
For the remainder of 2025, we expect continued operational momentum and remain focused on maximizing performance across our five Ohio dispensaries and advancing construction and licensing of the three additional locations planned for 2026.
We continue to generate strong cash flow and we expect Q4 cash flow to improve as we work through the inventory built in Q3.
Overall, we’re operating from a position of strength across both our core markets and remain well-placed to leverage our vertically-integrated platform and growing retail footprint to drive sustainable, profitable growth and create long-term shareholder value.” Eric Offenberger, CEO of Vext Science
Call Notes & Observations
Solid quarter.
Continued progress in OH AZ.
OPCF+
^ 4th consecutive quarter
Different market dynamics across AZ OH.
OH continues to gain momentum.
^ as A/U sales expand + retail footprint grows.
Capturing more OH demand.
^through continued retail expansion and improved cultivation output.
AZ a mature, competitive market with excess supply and lower pricing.
^ doing a great job managing.
Outperforming AZ state averages.
Generating Adj EBITDA+ and protecting margins
OH stands out as a growth engine.
^ revenue steady QoQ as 2 dispensaries ramp.
^ offsetting intentionally lower wholesale activity.
4 OH dispensaries continue to perform well.
Drive throughs in OH a clear success,
^ driving convenience, frequency.
^ reinforcing vertical platform approach.
Adding drive throughs across retail platofm wherever permitted.
^ results consistently positive.
Increased inventory in OH ahead of retail growth.
Fairfield OH opening shifted to early 2026 due to permitting delays.
Will bring 3 remaining OH dispensaries online in 2026.
^ will meaningfully contribute to results.
Expect to monetize excess inventory through remainder of year in OH.
Expect to see strong revenue growth in Q4.
Focused on completing 3 remaining dispensaries in OH during 2026.
OH openings will be in line w/ permitting.
AZ operations perform well.
^ sales exceeding state averages on a per store basis.
Broader AZ market soft.
^ statewide sales down 12% QoQ and 6% YoY.
^ due to pricing pressure and typical seasonality
AZ focus on verticalization and margins.
Eloy cultivation AZ facility exceeding market averages
Able to maintain AZ ebitda despite compression in the state.
AZ an indication of ability to win in markets as they grow increasingly competitive.
Entering YE w/ momentum.
In OH see strong high margin growth as A/U market expands.
AZ proving can stay profitable/efficient in a mature environment.
Capital light model.
^ focus on vertical operations.
^ allows delivery of solid CF margin.
Converting growth into more CF.
^ improving the balance sheet.
During a tougher quarter w/ increased seasonality, generated CF.
On track for OH expansion.
$12.7m vs. $13.4m in Q2 ‘25.
YTD revenue of $37.6m.
^ +46% YoY.
^ driven by OH retail / steady performance in AZ.
Solid operational momentum, especially in cultivation.
Better aligning cultivation footprint w/ retail demand.
Over last 2 years, avg yields have improved.
^ +10% YoY in Q3 ’24.
^ +15% in this YoY period.
Test yields from new efforts showing upwards of 50% increase vs. averages.
Intentionally built flower inventory in OH ahead of Fairfield store launch.
^ more sellable grams on hand in Q3 vs. Q2.
Fairfield delay impacted short term working capital / OPCF.
Well positioned to capture additional revenue / cash conversion next few months.
Inventory down QoQ.
^ realigned w/ market conditions + pricing.
Expect margins to normalize as excess inventory sells through in Q4.
$2.1m adj EBITDA, 16.7% margin.
Decline in adj EBITDA driven by lower wholesale flower prices in AZ and non-cash working capital adjustments.
Core profitability remains consistent w/ early ’25 R/R.
$1.26m OPCF, 9.9% OPCF margin.
Wholesale pricing movement impacted working capital.
^ drove much of the QoQ decline.
Adjusting for 1 time items and income tax payments.
OPCF would have been in-line w/ 1H ’25 performance.
OPEX down YoY and down as a % of revenue.
^ reflecting continued cost discipline.
^ even as expanding retail footprint.
Operating leverage showing through.
^ especially as new stores are consolidated.
$3.7m cash.
Pieces in place for strong finish for the year.
Revenue, adj EBITDA, and CF to step up meaningfully in Q4. 👀
Expect to deliver consistent financial performance through year end.
^ and expanding strength into ’26 as remaining OH doors open.
AZ seasonal traffic was similar patterns to last year.
^ most of the issues still price driven.
Also more stores in AZ vs. last year.
Don’t believe AZ wholesale has bottomed out.
Don’t think it declines as fast as it has been.
Some people selling inventory below costs of cultivation.
Depends on how long those operators can stay alive for.
7 of 8 OH dispensaries can have drive throughs.
^ think will be done by EOY.
^ 2 more being retrofitted / depends on permitting / zoning.
In-house counsel understands R/E transactions well.
^ has been strong in getting dispensaries open.
OH seeing retail competition.
Vertical model allows maintaining of market share at a cost of price.
Think brands primarily wholesale in OH are bringing retail online.
^ and shifting to vertical sales to maintain margins.
Market own vext brands / quality in-store to ensure margins.
Saw some price compression.
^ but seeing improvements in yield that will help on the cost side.
Expect to leap frog pack as a result of cultivation improvements.
Staying focused on opening 8 OH stores, generating cash, improve balance sheet.
Looking at accretive opportunities that make sense.
^ nothing jumping out, but looking at everything as a general rule.
OH strategy wont be different.
^ will support stores and own brands.
^ 70% internal, 30% external.
Today vertical + wholesale strategy is working well.
^ will continue with that strategy.
Sitting on a fair amount of inventory in OH.
YoY up about 50% vs last year on wholesale inventory.
^ will tick up because of cultivation yield improvements.
Expect OH wholesale to be elevated for the next several quarters.
^ will service 70% verticality and additional wholesale.
Not seeing A/R issues that other operators are mentioning.
^ wholesale up 50%, AR only up 35%.
Still very optimistic about where at on the remaining 3 dispensaries in OH.
^ where putting those stores, how they’ve been embraced.
6th store is something really excited to see open.
^ really happy w the landlord and the location.
Think OH store 7 will be in Columbus, get permitting done quickly.
Think OH store 8 will be in Cincinnati, happy w/ where that store is located.
R/E in OH has been phenomenal.
/end
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