Village Farms International Reports Q2 2025 Financial Results

VANCOUVER – Village Farms International, Inc. reported its financial results for the second quarter of 2025, indicating record profitability and performance of strategic shifts, including the privatization of parts of its produce segment, which has sharpened its focus on high-margin Cannabis markets.

Village Farms reported consolidated net sales of $59.9 million, a 12% increase from $53.6 million in Q2 2024. Net income from ongoing operations hit $9.9 million, marking a substantial improvement from a net loss of $16.6 million in the prior year. Total net income was $26.5 million, compared to a net loss of $23.5 million. Adjusted EBITDA from continuing operations hit a record $17.1 million, up from $2.9 million, with an adjusted EBITDA margin of 28.6%, a 2.320 basis point increase from 5.4% in Q2 2024. Year-to-date cash flow from continuing operations was $22.3 million, reversing a $3.7 million outflow from the prior year. The company ended the quarter with $65 million in cash, reflecting a strengthened balance sheet following a $40 million cash influx from the produce segment privatization.

The Canadian Cannabis segment, a cornerstone of Village Farms’ operations, saw net sales rise 9% to $44.5 million (CAD 61.4 million) from $40.7 million (CAD 55.8 million). This growth was driven by a 690% surge in international medical export sales, though retail branded sales dipped 20% due to a deliberate shift toward higher-margin products. The segment’s gross margin improved to 39% from 26%, reflecting successful margin enhancement initiatives. Adjusted EBITDA increased by 146% to $11.9 million (CAD 16.5 million), while cash flow from operations shot up by 233% to $18 million (CAD 24.6 million). According to third-party data, the company maintained a top-three market share in Canada and held the number-one position in dried flower through July 2025.

In the Netherlands, Village Farms’ Leli Holland subsidiary, which began sales in Q1 2025, generated $2.5 million in net sales and $1.2 million in adjusted EBITDA. Its products are now available in 66 of 80 participating coffeeshops, achieving 82.5% market penetration. The company is on track to launch hash products in Q4 2025 and complete a Phase II facility in Groningen by Q1 2026, which is expected to quintuple production capacity.

In the U.S., Balanced Health Botanicals reported $3.8 million in net sales, down from $4.3 million, but improved its gross margin to 63% from 61%. The company’s application for a Texas medicinal Cannabis license is under review, with plans to comply with regulatory requirements if approved.

The produce segment saw continuing sales rise 2% to $8.6 million, with net income improving to $4.3 million from a $1.3 million loss, aided by a vendor settlement related to prior operational challenges. Adjusted EBITDA for the segment reached $6.4 million, up from $0.1 million. The privatization of certain produce assets, completed on May 30, 2025, yielded $40 million and a 37.9% equity stake in Vanguard Food LP. Village Farms will continue supplying produce from its Delta 1 and Delta 2 greenhouses under multi-year agreements, though Delta 2 will shift to Cannabis cultivation post-2025 tomato crop to meet rising demand.

Village Farms is capitalizing on global Cannabis market opportunities, with international export sales hitting annual targets in just six months. The company successfully refinanced its Canadian Cannabis term loans, securing a lower interest rate and an extended maturity date of 2028. A planned expansion of its Delta 2 greenhouse will add 40 metric tons of annual Cannabis production capacity, funded by existing cash reserves. Additionally, Village Farms published peer-reviewed research on THC potency variability, advocating for improved product quality and labeling standards in the Cannabis industry.

Village Farms’ Q2 2025 results underscore a disciplined approach to profitability, with its Canadian Cannabis segment leading the charge through margin improvements and international growth. The company’s strategic divestiture of produce assets has fortified its financial position, enabling self-funded expansion in high-growth Cannabis markets. However, challenges remain, including navigating regulatory complexities in the U.S. and sustaining margin gains amid competitive pressures. Village Farms’ focus on operational efficiency and market share positions it as a formidable player, though we’ll likely monitor its ability to translate these gains into consistent free cash flow.