Vext Science ((TSE:VEXT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Vext Science highlighted a mixed sentiment, with strong performance in Ohio driving significant revenue growth and improved EBITDA margins. However, challenges in the Arizona market and a decline in wholesale sales were noted as hurdles. Overall, the positive growth in Ohio and operational improvements slightly outweighed the issues faced in Arizona.
Record Revenue and Growth
Vext Science reported a remarkable 59% year-over-year revenue growth, reaching $13.4 million in Q2 2025 compared to $8.4 million in Q2 2024. This impressive increase was primarily driven by the company’s strategic expansion in Ohio.
Strong Performance in Ohio
Ohio retail sales saw an 86% sequential growth during the second quarter. The addition of drive-thrus and new dispensaries significantly contributed to the increase in customer traffic, showcasing Ohio as a key market for Vext Science.
Adjusted EBITDA Increase
The company achieved an adjusted EBITDA increase of $3 million, reaching $4.1 million, with a 30% adjusted EBITDA margin. This reflects Vext Science’s top-line growth and disciplined cost management strategies.
Operating Cash Flow Improvement
Vext Science’s operating cash flow improved significantly, reaching $4.2 million in Q2 2025, a notable turnaround from a negative $0.6 million in Q2 2024. This improvement underscores the company’s effective financial management.
Challenges in Arizona Market
Despite the overall positive performance, Vext Science faced challenges in the Arizona market. Retail sales in Arizona decreased by 0.3% year-over-year, with a 3.6% sequential decline, attributed to a contracting market and pricing misalignment.
Decline in Third-Party Wholesale Sales
Net third-party wholesale sales in Ohio declined due to the Big Perm acquisition, with associated wholesale volumes now captured as retail sales. This shift reflects a strategic realignment in the company’s sales approach.
Income Tax Expense
The company recorded a $2 million income tax expense related to an uncertain tax position stemming from an ongoing 280E audit, highlighting some of the financial challenges faced during the quarter.
Forward-Looking Guidance
Vext Science’s forward-looking guidance emphasizes continued robust growth metrics, with a focus on disciplined execution and efficient capital allocation. The company plans to capitalize on the growing Ohio market, aiming to convert top-line growth into free cash flow while maintaining a strong balance sheet. Despite challenges in Arizona, Vext Science’s effective cost management and operational discipline are expected to support future growth.
In summary, Vext Science’s earnings call reflected a positive overall sentiment, driven by strong performance in Ohio and operational improvements. While challenges in Arizona and a decline in wholesale sales were noted, the company’s strategic focus on Ohio and disciplined financial management are expected to drive future growth.