VEXT Science Earnings + Call Notes
Leaning into the Ohio market.
$12.2M Revs; est. $12.4M
$3.6M AEBITDA; est. $2.7M
$4.4M GP; est. $4.3M
35.8% GM; est. 35%
($0.9M) NI; est. ($2.3M)
Revenue of $12.2 million, up 5.2% year-over-year.
Gross profit more than doubled to $5.5 million (45.4% margin).
Net loss narrowed 73.2% to $(0.9) million.
Operating cash flow of $1.6 million and cash position of $5.5 million at quarter-end.
Ohio revenue of $8.2 million, up 34% year-over-year across five operating dispensaries. ^ improving cultivation yields.
^ Arizona repositioning on track with the Eloy cultivation exit underway.
Management Commentary
“Q1 was a strong quarter for VEXT. Gross profit more than doubled to $5.5 million, and Adjusted EBITDA was $3.6 million on 29% margins, up sharply from where we ended last year.
Ohio drove the quarter. Revenue was up 34% to $8.2 million across five stores, and our cultivation is improving every quarter. The strategy we have been executing on is straightforward: build disciplined retail operations and match the upstream platform to the realities of each market.
In Ohio, where vertical integration and scale continue to create value, every store we add strengthens the model and supports improving cash flow generation.
In Arizona, the cultivation exit is underway and remains on track to be completed by the end of the second quarter of 2026. The Arizona wholesale market is oversupplied, and prices have compressed to the point our capital was better deployed elsewhere.
What remains is the part of Arizona that has maintained economic viability: two dispensaries, light manufacturing, and flexibility to source and price competitively.
Between an Ohio platform that’s scaling, and an Arizona business now right-sized for the market, we believe the business is well positioned to continue generating strong cash flow through 2026 and beyond.”
Eric Offenberger, CEO of VEXT
Call Notes & Observations
Profitability gains in OH more than offsetting pressure in AZ.
Revenue increased 5% YoY to $12.2m.
GP more than doubled to $5.5m.
Adj EBITDA of $3.6m, 29% margin.
^ up sharply vs. Q4.
Underlying business continues to generate cash.
^ $1.6m CFFO despite temporary working capital headwinds and drag of AZ cult operations ahead of Eloy shutdown
OPCF is one of the clearest indications of business scale efficiency.
OH the primary growth driver.
OH sales increased more than 20% YoY in Jan/Feb.
OH revs increased 34% to $8.2m.
^ supported by additional dispensary contribution and cultivation performance
Opening the right stores in the right places, supply through owned cultivation, convert to cash.
New stores makes VEXT proven model stronger.
OH market maturing, competition increasing as dispensaries come online, particularly in Columbus.
Pricing pressure emerging in certain categories in OH, a dynamic VEXT knows well.
Strategic retail locations, strong capital allocation.
Operators focused on CF generation will separate as markets mature.
Will continue building out OH retail network.
^ increase cultivation capacity to support new stores.
Opening Fairfield in Q2 and Columbus later this year.
^ 8th OH dispensary in early ‘27.
Eloy final harvest in first week of May, expect to be shuttered in Q2.
Expect related CF drag from Eloy to improve as the year progresses.
AZ footprint is 2 retail doors in Phoenix and strategic manufacturing footprint.
Refocused AZ strategy will cut substantial operating costs and improve margin / CF profile of AZ business.
Focusing capital on highest return opportunities.
Priority is executing on next phase of growth in OH and further streamlining AZ to enhance margins and CF generation.
OH retail platform continues to generate a larger % of total revenue.
AZ revenue declined 24% YoY as market continued to experience wholesale compression and oversupply.
Wholesale revenue declined 50% YoY to $1.7m.
^ reflects continued retail-first prioritization in OH and full sell through of inventory.
Expect OH wholesale to rebuild from here.
GP up to $5.5m, 45.4% margin ; vs. 19.7% margin in YoY period.
GP improvement reflects operating leverage in OH, improved cultivation performance.
29.3% adj EBITDA margin vs. 15% margin in Q4 ’25 and 29.6% margin in Q1 ‘25.
Q4 profitability impacted by timing related FV adjustments associated w/ AZ.
^ normalized into Q1.
($0.9m) net loss vs. ($3.3m) in YoY period.
^ reflects higher GP, improved adj EBITDA, continued discipline.
$1.6m CFFO, 13% margin.
Full CF benefit from Eloy shutdown in Q3.
UTP increased to $10.6m vs. $8.1m at Q4 ’25.
^ reflects $2.5m adjustment related to differences vq’25 tax provision, and returns.
^ still being finalized
Excluding UTP liability, VEXT working capital is positive.
$5.5m cash, up from $5.1m at YE’25.
Well positioned for ’26 w/ OH scaling and AZ focusing to a capital light retail model.
Expect operating leverage, margin expansion, and CF generation through balance of 2026.
Fairfield store should be one of more active stores, if not the best store in the OH chain.
Fairfield store ramping should be pretty quick.
7th store opening in Columbus, still working through permitting.
^ will take 3-4 months to ramp.
Anticipate Columbus to be a top performer as well.
^ will have drive-thru capabilities.
Like rural stores, like underserved markets, think that’s a good work force to attract, a good customer loyalty base to attract, not as much congestion within the area.
Now more nimble to adjust to AZ strategy.
Value to shareholders, if value in AZ retail makes more sense to sell, would sell.
At current pricing levels, everyone in AZ acquisition mode, but people want to benefit from the step up generated by VEXT in AZ (retail + cult shut down).
VEXT not in desperation mode, doesn’t need to sell cheap and desperately.
Stable pricing in AZ around $400-500/lb., not the only operator suffering from overproduction, will continue to be opportunistic and finding deals sub-$400.
Jeffersonville drive thru should be online in a week.
^ security company is finishing cameras right now.
Athens drive thru, speaking to contractor yesterday, progressing, window is in, need a new retaining wall, getting that finished, should be next 30-45 days.
Q1 came in just under 15% improvement in OH.
AZ had improvement as well; expecting further strong improvement in Q2.
Columbus store approx. $3-3.2m capex, but will own that store completely.
8th store will be $2-2.5m capex.
Expect 8th store to open in 1H ’27, but permitting is a challenge.
Took care of some outstanding accounts payable during the quarter, adjacent to construction partner.
Expecting a meaningful improvement in adj EBITDA and CFFO in AZ, post-Eloy.
/end
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