Village Farms International, Inc.

Consolidated net sales were $64 million, up 27% sequentially and 7% year over year. Net income from continuing operations was $7.2 million, or $0.06 per share. Consolidated adjusted EBITDA from continuing operations was $15.4 million, or 24% of sales, versus $17.1 million, or 28.5% of sales in Q2 of last year; management said the year-over-year comparison was distorted by a one-time $4.3 million vendor settlement in the prior year. Cannabis segment sales were $53.5 million, up 5% year over year, and cannabis gross margin was 51%, up 900 basis points from 42% a year ago. Cannabis adjusted EBITDA rose 16% to a record $15.3 million, with a 29% margin. Cash ended at approximately $73 million. Management said the first half included about $17 million of Canadian income taxes, $31 million of excise taxes, $15 million of CapEx, $7 million of share buybacks, and a $15 million equity placement. Long-term debt was approximately $40 million at a blended interest rate of 5.6% as of June 30, 2026. Guidance-wise, management expects the second half to bring stronger free cash flow and continued cash growth, with Groningen ramping through the next few quarters and Delta 2’s second-half conversion starting September 1. They continue to expect an incremental 15 metric tons from Delta 2 in 2026, another 25 tons in 2027, a 40-ton run rate starting in Q3 2027, and full 40 tons of incremental capacity available beginning fiscal 2028.

Mike DeGiglio struck an upbeat tone, framing the quarter as proof that the company’s global cannabis platform is gaining scale and efficiency. He emphasized record harvest yields in Delta, BC, record export sales, stronger EU GMP demand, and top-10 market share across major Canadian categories. He also highlighted the Netherlands and Germany as major growth avenues and said the company will pursue only strategically compelling opportunities that create long-term shareholder value.

Steve Ruffini focused on the quarter’s financial mechanics: $64 million of consolidated sales, $15.4 million of adjusted EBITDA from continuing operations, and $7.2 million of net income from continuing operations. He said cannabis gross margin rose to 51% from 42% due to better mix, efficiencies, and lower production costs, while SG&A increased to 28% of sales because of transfer pricing updates and higher commercial spending. He also detailed liquidity and capital deployment, noting about $73 million of cash, roughly $40 million of debt at 5.6% interest, $17 million of income taxes, $31 million of excise taxes, $15 million of CapEx, $7 million of buybacks, and a $15 million equity placement, and he reiterated a balanced capital allocation approach.

Analysts pressed management on German growth visibility, export pricing, and whether the company’s EU GMP advantage can hold if U.S. exporters enter Europe. Management said German demand is still growing, non-compliant supply is declining, and EU GMP certification is costly and difficult to maintain, which should protect Village Farms’ position. Questions also centered on margin sustainability, where management reiterated a long-term 30% to 40% gross margin/EBITDA margin goal, and on capex, where management said most spending is already done. In Europe, management said it expects to become more vertically integrated over time and believes it is already the largest Canadian exporter by volume.