Vext Science, Inc.

Q2 revenue was $12.1 million, down about 10% year over year and essentially flat sequentially. Gross profit was $6.7 million versus $4.9 million a year ago, and gross margin was 55% versus 36% last year; gross margin before fair value adjustments was 44% versus about 39%. Adjusted EBITDA was $3.4 million, up 22% from Q1, with adjusted EBITDA margin of 28% versus 23%. Net loss narrowed to $300 thousand from $1.5 million a year ago. Operating cash flow was $1.2 million, and the company ended the quarter with about $4.5 million in cash. For guidance, management expects improved performance in the second half as Arizona repositioning takes hold, Ohio inventory converts to cash, Fairfield continues to ramp, and the Ohio footprint expands. They said the seventh Ohio location is under construction and expected to open in Q1 27, while the Eloy property is held for sale at $7.8 million and proceeds are expected to pay down secured debt. They also said Arizona will no longer be a laggard on cash flow margin or adjusted EBITDA margin once the last Eloy sell-through rolls off in Q3, with Q4 becoming the first clean quarter there.

Eric Offenberger framed the quarter as a deliberate execution quarter: Arizona cultivation was wound down on schedule, Ohio expanded with Fairfield opening, and adjusted EBITDA improved again. He emphasized that Vext’s model is built around owning real estate, running a retail-first business, and using cultivation only when it strengthens retail economics. His tone was confident and pragmatic, repeatedly stressing discipline, pricing, and the need to measure the business against Ohio growth, Arizona repositioning, and debt paydown.

Trevor Smith highlighted the financial progression: revenue of $12.1 million, gross profit of $6.7 million, gross margin of 55%, adjusted EBITDA of $3.4 million, and net loss of $300 thousand. He pointed to a deliberate $2 million Ohio inventory build, which, along with over $1 million of payables that were fully paid by quarter-end, explained the gap between adjusted EBITDA and reported operating cash flow; he said operating cash flow was $1.2 million. He also noted the Eloy property moved to held for sale at $7.8 million, cash was about $4.5 million, the East West Bank note maturity was extended by 6 months to January 2028, and Wright-Patt financing brought in approximately $17 million gross proceeds used to refinance about $10.5 million of debt, acquire the Jackson facility for $6 million, and fund Ohio development.

Analysts focused on why Ohio sales remained strong, how medical and recreational demand are interacting, the economics of Arizona cultivation versus third-party sourcing, and whether M&A activity is picking up. Management said Ohio pricing and packaging changes affected near-term traffic, but customer counts recovered after pricing was corrected; Fairfield has the most room to grow, and Columbus recovered over the last three months. On Arizona, Trevor said third-party sourcing can be dramatically cheaper than producing, with cash cost potentially sub-$300 versus a fully absorbed cost that would be tough to get below $700, and that there is no major cost advantage to producing versus purchasing in the current oversupplied market. On M&A, Eric said there is a lot of “tire kicking” but not much real transaction momentum yet.