Company Announcements

CALGARY, AB , Aug. 21, 2025 /PRNewswire/ - Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSXV: DB) (OTCQB: DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its unaudited interim financial results for the three and six month periods ending June 30, 2025.

"Decibel delivered a strong second quarter with exceptional sequential growth, record international volumes, and continued strength across all profitability metrics. Q2 marked a pivotal period for the Company, highlighted by the successful integration of AgMedica, which has firmly established our international platform. As we move into the second half of 2025, we are well positioned to accelerate our momentum in Canada and expand our presence in high-growth global markets."  

Benjamin Sze – Chief Executive Officer

Second Quarter Highlights

• Net Revenue was $29.8 million, a year over year increase of 35%. Net revenue growth in the quarter was primarily a result of contributions from AgMedica Bioscience Inc. ("AgMedica") which accelerated international sales, coupled with modest net Canadian recreational sales growth. Total sales contributed from AgMedica were $5.4 million, of which $4.7 million were international sales and the remainder net Canadian recreational sales.
  
  
• Net Canadian Recreational Sales were $23.7 million, a year over year increase of 7%. The increase in net Canadian recreational sales was driven by successful initiatives including: new marketing campaigns, reinvesting in growing the Qwest brand presence, launching ultra high potency vapes and infused pre-rolls, new large format all-in-one disposable, and milled flower.
  
  
• International Sales were $6.1 million, a year over year increase of $6.1 million, and a quarter over quarter increase of 176%. The increase in international sales was primarily driven by the contributions from AgMedica. Total international sales contributed from AgMedica were $4.7 million. The Company has executed additional contracts related to cannabis exports to international markets and delivered modest volumes related to such contracts in the second quarter. With the majority coming in future periods. The Company sees strong demand internationally and anticipates incremental volumes and contracts in the second half of 2025.
  
  
• Gross Margin Before Fair Value Adjustments was 47% in the second quarter of 2025, compared to 42% in the second quarter of 2024.
  
  
• Adjusted EBITDA ⁽¹⁾ of $6.3 million, a year over year increase of 60%. The increase in Adjusted EBITDA for the quarter was primarily driven by international sales and net Canadian recreational sales growth.
  
  
• Free Cash Flow ⁽¹⁾ of $2.2 million, a year over year increase of $4.3 million. The increase in Free Cash Flow is primarily attributable to strong growth in net revenue, partially offset by changes in non-cash working capital as the Company positions itself for anticipated growth.
  
  
• Adjusted Net Income ⁽¹⁾ of $3.4 million, a year over year increase of $2.8 million. Adjusted Earnings per Share were $0.01, an improvement of $0.01 year over year. 

Summary Highlights

Decibel's unaudited condensed consolidated interim financial statements for the three and six month periods ending June 30, 2025 (the "Financial Statements") and related management's discussion & analysis for the three and six month periods ending June 30, 2025 ("MD&A") are available on SEDAR+ under the Company's profile at www.sedarplus.ca.

As of June 30, 2025, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

Decibel is a consumer-focused cannabis company known for premium products that delight customers through innovation and quality. With brands like General Admission, Qwest, and Vox, Decibel's offerings are available across Canada, with expanding reach into global markets. Following the acquisition of AgMedica in Q4 2024, Decibel has added an EU-GMP-certified facility, supporting its commitment to international standards and global distribution growth. Decibel now operates three cultivation facilities and a processing and manufacturing center, positioning the company as a leader in high-quality, globally accessible cannabis products and brands.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statements

Non-GAAP Measures

This news release contains certain financial performance measures, namely Adjusted EBITDA, Adjusted Net Loss and Free Cash Flow, that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Adjusted Net Income is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted EPS is a non-GAAP ratio that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. 

These measures are intended to provide a proxy for the Company's net income (loss) and comprehensive income (loss) and are used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations less cash provided by (used in) investing activities. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Adjusted Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations plus cash provided by (used in) investing activities, changes in non-cash working capital, less repayment of long-term debt. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Supplementary Financial Measures 

International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company's wholesale operations.

Gross Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company's wholesale operations.

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company's wholesale operations.

Forward-Looking Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release.

Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: expectations relating to the scaling of internal sales and management's belief that current and prospective results will lead to a transformative year for Decibel; expectations that demand for Decibel's products will grow; the ability for Decibel to delight customers through the Company's product offering; the ability of the Company to extend its product offering to new countries and create a global footprint, including anticipation of incremental international volumes and new contracts in the second half of 2025 and the anticipated contributions from these activities, and the timing thereof; the Company's marketing efforts and brand expansion, and the expected benefits therefrom; and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections or other factors should they change, except as required by law.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts; capital requirements; construction impacts; the ability to obtain and maintain licences to retail cannabis products; review of the Company's production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; including the imposition of levies and tariffs, and the general impact of such policies on the broader economy; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company's management's discussion and analysis for the three months ended March 31, 2025, which is available under the Company's profile at www.sedarplus.ca.

With respect to forward-looking statements contained in this news release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel 's products; Decibel's ability to enter new markets and industry verticals; Decibel's ability to attract, develop and retain key personnel; Decibel's ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches; Decibel's ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel's industry or the global economy; the Company's ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company's products; anticipated and unanticipated costs; government regulation of the Company's activities and products; the timely receipt of any required regulatory approvals; the Company's ability to conduct operations in a safe, efficient and effective manner; the Company's construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

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SOURCE Decibel Cannabis Company Inc.