CV Sciences ((CVSI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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CV Sciences’ latest earnings call painted a picture of both progress and challenges. The company reported significant improvements in gross margin, cash flow, and cost efficiency, alongside successful new product developments and strategic M&A integration. However, challenges such as revenue decline, regulatory issues, and a decrease in B2C revenue were noted. Despite these hurdles, the company’s positive adjusted EBITDA and improved financial metrics demonstrate progress towards profitability.
Improved Gross Margin
CV Sciences reported a Q2 gross margin of 50.9%, a significant improvement from the Q1 2025 gross margin of 46%, marking the highest margin since 2019. This improvement highlights the company’s effective cost management and operational efficiency.
Positive Adjusted EBITDA
For the first time since Q2 2019, CV Sciences achieved a positive adjusted EBITDA of $59,000. This milestone underscores the company’s efforts in enhancing profitability and financial health.
Cost Efficiency Gains
The company successfully reduced SG&A expenses by 20% year-over-year, leading to significant cash savings. These cost structure improvements are pivotal in supporting CV Sciences’ path to profitability.
New Product Development Success
New products introduced since 2023 accounted for 39% of revenue in Q2 2025, showcasing the company’s successful product innovation and ability to capture market interest.
Increased Market Share
CV Sciences maintained its #1 position in the natural product retail channel and increased its market share, reflecting strong brand presence and consumer trust.
Cash Flow Improvement
The company generated positive cash from operating activities of $0.3 million in Q2 2025, a significant improvement from the cash used in operations in Q2 2024, indicating better financial management.
Strategic M&A Integration
The acquisition of Elevated Softgels has realized efficiency gains and is expected to further improve cost efficiency and gross margin, enhancing CV Sciences’ competitive edge.
Revenue Decline
Despite the positive developments, CV Sciences faced a year-over-year revenue decline from $4.0 million in Q2 2024 to $3.6 million in Q2 2025, driven by a 7% decrease in unit sales.
Regulatory Challenges
Increased state regulations have negatively impacted unit sales and continue to pose challenges for the CBD category, affecting overall revenue performance.
B2C Revenue Decline
B2C revenues declined by 7% sequentially due to reduced traffic to the site, highlighting challenges in maintaining consumer engagement.
Operating Loss
CV Sciences reported an operating loss of $0.1 million in Q2 2025, compared to an operating income of $11,000 in Q1 2025, indicating ongoing challenges in achieving consistent profitability.
Forward-Looking Guidance
Looking ahead, CV Sciences remains committed to maintaining its leading position in the natural product retail channel and expanding its product offerings, including non-cannabinoid items under the PlusHLTH brand. The company is also investing in Cultured Foods, which has led to the launch of Lunar Fox, a new line of plant-based foods. Despite a challenging regulatory environment, CV Sciences is aligning its cost structure to support growth and profitability.
In summary, CV Sciences’ earnings call reflected a mixed sentiment with notable achievements in gross margin improvement, cost efficiency, and product development. However, challenges such as revenue decline and regulatory hurdles persist. The company’s strategic initiatives and focus on innovation and efficiency position it well for future growth and profitability.