VFF · Village Farms International, Inc.

Village Farms International delivered a strong Q1 2026 performance, with consolidated net sales climbing 27% to $50.2 million, primarily propelled by record international medical cannabis export sales that surged 171% year-over-year to $14.6 million. This growth was complemented by Canadian branded sales up 5% and Netherlands sales exploding 448%, reflecting robust demand for the company's EU-GMP compliant products, especially in Germany. Cannabis operations, now the sole reportable segment following a Q1 realignment for operational efficiencies, saw gross margins expand to 43% from 39%, underscoring improved pricing stability and production scale. Adjusted EBITDA from continuing operations more than doubled to $9.9 million (20% margin), outpacing revenue growth due to margin leverage and international momentum. Net income turned positive at $2.9 million ($0.03 basic EPS), marking the fourth consecutive profitable quarter. CEO Michael DeGiglio highlighted precision execution, market share gains via Pure Sunfarms (top in Canadian dried flower for 15 months), and facility upgrades at the 4.8 million sq ft Delta, BC campus—now claimed as the world's largest EU-GMP certified cannabis facility. Capacity expansions, including Delta 2 (adding 40 metric tonnes annually by 2027) and Netherlands Phase II (ramping to 10 metric tonnes by year-end), position the company for accelerated H2 2026 sales. Despite operating cash outflow of $11.8 million from $15 million tax payments, the company repurchased $6.4 million in shares, invested $9.2 million in capex, and amended its $15.4 million FCC loan to a lower rate (<7%) with maturity extended to 2031. Succession planning for outgoing CFO Steve Ruffini signals focus on M&A opportunities amid a strong balance sheet. President Trump's executive order rescheduling marijuana to Schedule III is viewed as a U.S. market tailwind.