Revenue — no API Ninjas consensus estimate for this event
Verdict
Revenue was CAD 28.0m against CAD 5.4m a year ago and up 12.5% sequentially; the VSDHOne direct-to-consumer platform supplied CAD 22.8m of it against roughly CAD 700,000 in the same quarter last year.
The quarter stayed profitable at both lines, with adjusted EBITDA of CAD 3.2m and net income of CAD 2.5m against essentially break-even a year ago.
Gross margin fell to about 19.4% from about 36% as lower-margin pharmacy sales took the mix; pharmacy margin itself was about 14%, down from about 17% in Q1 against a roughly 20% target.
Guidance is unchanged at CAD 150m of FY2026 revenue with an adjusted EBITDA margin of approximately 15%-17%.
The one thing that matters: the revenue is real and profitable, but it arrived at roughly 14% pharmacy margin, and the reaffirmed CAD 150m still requires a second-half acceleration management itself calls material after CAD 53m in the first half.
Guidance & KPIs
Item
New guidance
Prior guidance
FY2026 revenue
CAD 150 million, reaffirmed
CAD 150 million
FY2026 adjusted EBITDA margin
approximately 15%-17%
—
Management commentary
Madden tied the working-capital build to funding pharmacy partners for customized compound product lines, describing the spend as structural and front-loaded rather than a recurring revolving cycle, and expects it to normalize from Q4 into Q1 of next year.
On the second-half shape, Madden said the guide was constructed as a baseline from existing partners and observable volumes: "The working capital we deployed in the first half is, in a very real sense, the second half being built."
On the pharmacy margin, Madden pointed to GLP-1 price declines driven partly by non-compliant competitors, and said FDA enforcement — 200 pharmacies reprimanded in the past week — is starting to normalize pricing.
Madden framed FDA movement on compounded peptides as a tailwind: a dozen moved out of the most restrictive category in April and six recommended for the National Compounding List in July, while noting these are recommendations, not final rules.
Quality of earnings
Profit did not follow revenue. Revenue rose about 420% year over year, but adjusted EBITDA of CAD 3.2m came in below Q1's CAD 3.3m and net income of CAD 2.5m was flat sequentially, because the incremental revenue arrived at 19.4% gross margin against about 36% a year ago.
Profitable on the income statement, negative in cash. The first half used CAD 8.7m of cash in operating activities against CAD 5.1m of first-half net income, the gap sitting in receivables and pharmacy prepayments with a 30- to 180-day conversion cycle.
Adjusted revenue of CAD 30.2m exceeds reported revenue of CAD 28.0m; the difference is deferred business-partner contract revenue, so the adjusted measure counts cash receipts the income statement has not yet recognized.
Gotchas & watch items
Pharmacy gross margin of about 14% is below the roughly 20% target and down from about 17% in Q1; management attributes it to GLP-1 price declines and concessions on new partnerships and gave no timeline for recovery.
The adjusted EBITDA margin guide of approximately 15%-17% sits above the 11.5% delivered this quarter and the 13.1% delivered in Q1.
Working capital rose to CAD 35.1m from CAD 15.7m at year-end against CAD 20m of cash, and it is funding pharmacy partners rather than inventory the company owns.
Mobile medical services, the original business, grew nearly 30% year over year while the group grew about 420% — essentially all of the step change is one platform, VSDHOne, at CAD 22.8m.