Organigram Global Inc. (OGI:CA) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with significant YoY revenue and EBITDA growth, improved margins, and net income turnaround. Despite seasonal revenue decline and working capital strain, the company has strategic plans for international expansion and new product launches. The Q&A highlighted management's proactive approach to resolving international issues and capitalizing on Canadian market opportunities. The lack of specific guidance on EU certification and U.S. market plans slightly tempers the outlook, but overall, the positive financials and strategic initiatives suggest a positive stock price movement.
Key Financial Performance
Net Revenue $65.3 million, a 49% increase year-over-year, primarily due to growth in the Canadian business, integration of Motif, and higher international sales.
International Sales $5 million, a 55% increase year-over-year, driven by elevated demand, though there was a sequential decline due to higher-than-expected proportion of flower not meeting international specifications.
Adjusted Gross Profit $23.9 million, a 67% increase year-over-year, supported by higher revenue, international sales growth, and efficiency gains.
Adjusted Gross Margin 38%, an increase of 500 basis points year-over-year, driven by higher yields, lower cultivation costs, and Motif synergy realization.
G&A Costs $15 million, a 33% increase year-over-year, due to Motif consolidation, ERP and professional fees, and higher depreciation, partially offset by cost savings initiatives.
Sales and Marketing Costs $9 million, a 55% increase year-over-year, primarily to support Motif and Collective Project brand portfolios.
Adjusted EBITDA $5.3 million, a 273% increase year-over-year, driven by increased scale, higher international sales, and lower proportional operating expenses.
Net Income $20 million, compared to a net loss of $23 million in the prior year, a $43 million improvement due to changes in fair value of derivative liabilities and top-up rights.
Cash Provided by Operating Activities (before working capital changes) $0.3 million, compared to cash used of $6.3 million in the prior year, reflecting improved cash generation from the core business.
Cash Used by Operations (after working capital changes) $16 million, compared to $4.2 million in the prior year, driven by higher inventory levels and timing of excise duties and licensing payments.
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Operating Highlights
New product launches: SHRED Soda and SHRED Shots introduced, featuring fast-acting soluble technology with a 15-minute onset claim.
Innovation in concentrates: BOXHOT Whipped Diamonds became the #1 dabbable concentrate in Canada.
Edibles growth: SHRED became the #2 gummy brand in Canada with a 17.9% market share.
Market share in Canada: Maintained #1 position nationally with 11.3% share in Q1 and 11.7% over the past 12 months. Strong performance in Ontario, British Columbia, Alberta, and Quebec.
International expansion: Generated $5 million in international sales, up 55% year-over-year. Expanded U.S. retail footprint to 11 states with Collective Project and Fetch.
Harvest and yield improvements: Harvested over 28,000 kilograms of flower, a 43% year-over-year increase, driven by LED lighting and nutrient program refinements.
Breakthrough in plant science: Developed a genetic marker for powdery mildew resistance, reducing screening time from 90 days to 10 days.
Manufacturing optimization: 100% hydrocarbon-based extraction with an 87% capacity increase year-over-year. Commissioned beverage line in Winnipeg for in-house production.
Focus on efficiency and margins: Achieved 38% adjusted gross margin, supported by higher yields and lower cultivation costs.
ERP system upgrades: Ongoing optimization expected to enhance distribution efficiency and cost management.
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Risk or Challenges
Market Share Decline: The company experienced a market share decline of approximately 500 basis points in Q1, largely due to the 8-week BC General Employee Union strike and increased competition in vapes and IPRs.
International Sales Variability: International sales volumes declined sequentially due to a higher-than-expected proportion of flower not meeting international specifications, leading to temporary operational challenges.
Regulatory Uncertainty: The company faces regulatory uncertainty in both domestic and international markets, which could impact operations and strategic plans.
Increased Competition: There is significant competition in key product categories such as vapes, IPRs, and pre-rolls, which has impacted market share and sales performance.
ERP Implementation Costs: The ongoing ERP implementation has led to increased costs, which are expected to roll off after the second quarter but currently weigh on financial performance.
U.S. Market Challenges: Penetration in the U.S. market has been slower than anticipated due to increasing competition and ongoing regulatory developments, impacting growth expectations.
Seasonal Revenue Decline: The company experienced a typical seasonal revenue decline in Q1, which, combined with other factors, affected financial performance.
Working Capital Strain: Higher inventory levels and timing of excise duties and licensing payments have led to increased cash usage, straining working capital.
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Guidance & Outlook
Revenue Expectations: The company expects to deliver revenue exceeding $300 million for the full fiscal year 2026, supported by improving fundamentals and expanding margins.
Margin Projections: Margins are expected to expand as international volumes scale throughout the year, supported by higher yields, lower cultivation costs, and efficiency improvements.
International Sales Growth: The company anticipates meaningful international sales growth in fiscal 2026, driven by elevated demand and remediation of temporary issues with out-of-spec products.
EU GMP Certification: The company is preparing follow-up responses to regulators and expects to await confirmation of certification or next steps, which could impact international sales.
U.S. Market Penetration: Incremental growth is anticipated in the U.S. market, with products available in over 20 states, though the company is not relying on the U.S. market for growth due to regulatory and competitive challenges.
Product Innovation: New products, including SHRED Soda and SHRED Shots, are expected to drive growth, with SHRED Shots positioned as a competitive option in the ingestible category.
Operational Improvements: Ongoing operational improvements, including hydrocarbon extraction optimization and ERP upgrades, are expected to contribute to cost efficiency and margin expansion.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Where are the lower-hanging near-term opportunities versus long-term initiatives for the company?
A:The CEO, James Yamanaka, emphasized short-term priorities on operational execution, cost base focus, margin improvement, and market delivery. Long-term initiatives include international expansion, balancing risks, and sustainable growth.
Q:What happened with international volumes and flower issues, and what actions were taken?
A:The company faced microbial growth issues due to increased yields, particularly affecting the German market. They identified core drivers and are working to resolve the issue. The impact was approximately $3.5 million on international revenue. The affected flower was repurposed for the Canadian market.
Q:Can the out-of-spec product be reallocated, and what is the outlook for the Canadian market?
A:Yes, the out-of-spec product was reallocated to the Canadian market without inventory write-offs. The Canadian market is expected to recover, with traditional distribution levels restored in BC and new product launches planned to address competitive challenges in vapes and pre-rolls.
Q:What is the timeline for the pending EU GMP certification?
A:The company received feedback from regulators in January and is working to address their questions. However, no specific timeline was provided due to the unpredictability of regulatory processes.
Q:What is the company's route-to-market strategy in Europe?
A:The company uses a mix of direct sales and partnerships, such as with Sanity Group, depending on market regulations and cost-effectiveness. They ship directly to Germany and the UK and evaluate the best approach for other markets.
Q:How does the company plan to approach the U.S. market given regulatory uncertainties?
A:The U.S. market is currently a small part of the business (<1% of revenue). The company is cautious about heavy investments due to regulatory uncertainties and is focusing on supporting existing business while preparing for potential federal regulation changes.
Q:Was there increased promotional intensity in pre-rolls, and how competitive is the market?
A:Yes, there was increased competition and promotional intensity in pre-rolls, with higher potencies and lower pricing being key challenges. The company is optimistic about new offerings and higher potency products to compete effectively.
Q:Review of Unclear Management Responses
A:Management avoided providing a specific timeline for the EU GMP certification, citing regulatory unpredictability. Additionally, they did not offer detailed plans for accelerating M&A in the U.S. market, focusing instead on regulatory uncertainties and a cautious investment approach.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
BC
BOXHOT
British Columbia
Brunswick
CEO Organigram
Collective Project
GA
IPRs
New
SHRED
Sales marketing
Shots
ability cash
basis point
breeding
capital liquidity
cash generation
center
competition
cost inventory
decline
decrease
dynamic
efficiency cost
generation core
hydrocarbon extraction
investment cash
level
mildew resistance
plant science
product development
response
share basis
spec
strike
today CEO
visibility
OGI Transcript
Organigram Global Inc. (OGI:CA) Q1 2026 Earnings Call Transcript
Positive2-10
The earnings call reveals strong financial performance with significant YoY revenue and EBITDA growth, improved margins, and net income turnaround. Despite seasonal revenue decline and working capital strain, the company has strategic plans for international expansion and new product launches. The Q&A highlighted management's proactive approach to resolving international issues and capitalizing on Canadian market opportunities. The lack of specific guidance on EU certification and U.S. market plans slightly tempers the outlook, but overall, the positive financials and strategic initiatives suggest a positive stock price movement.
Organigram Global Inc. (OGI:CA) Q4 2025 Earnings Call Transcript
Positive12-16
The earnings call summary highlights strong financial performance, including significant revenue and EBITDA growth, and optimistic guidance for future expansion and margin improvements. Despite some concerns like higher G&A costs and seasonal revenue fluctuations, the company's strategic initiatives, such as capacity expansion and international growth, are promising. The Q&A section reinforced positive sentiment, with management providing clear answers and outlining plans for operational improvements. Overall, the positive aspects outweigh the negatives, suggesting a likely positive stock price movement over the next two weeks.
Organigram Global Inc. (OGI) Q3 2025 Earnings Call Transcript
Unknown8-13
Despite strong financial growth and international expansion, concerns about regulatory hurdles, dependency on international markets, and margin pressures offset positive aspects. The Q&A highlighted delays in EU GMP certification and lack of clarity on U.S. investments, contributing to uncertainty. Overall, the stock price is likely to remain stable in the short term.
Organigram Global Inc. (NASDAQ:OGI) Q2 2025 Earnings Call Transcript
Unknown5-13
The company's financial performance shows mixed results: strong revenue growth and improved EBITDA, but a miss on EPS expectations. The Q&A highlights potential risks, such as integration challenges and market demand fluctuations, while management's vague responses on key issues raise concerns. The lack of a share repurchase program and significant capital investments add uncertainty. Despite positive aspects like international sales growth and strategic investments, these are counterbalanced by execution risks and market uncertainties, leading to a neutral sentiment.
OGI Slides
OGI Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
