Decibel Q1 2026 Update – $DB.v
Decibel delivers strong start to FY26
I was waiting to get my hands on the call transcript, but I can’t find it anywhere online. So here is the update without it.
Disclosure: I own shares in DB. I am not a professional. Please do your own due diligence.
Decibel Cannabis Company Inc. is a premium cannabis producer operating licensed cultivation, processing, and manufacturing facilities in Canada. The company develops and sells cannabis flower, pre‑rolls, vapes, and derivative products under brands including Qwest, General Admission, and Vox. Decibel also supplies international medical cannabis markets through export partnerships.
Price: $0.13 CAD
MC: ~75 million CAD
EV: ~121 million CAD
1 year performance: +85.7%
Decibel reported Q1 2026 results on May 21, 2026. Results were ahead of my expectations, and the stock is essentially flat from before earnings.
all numbers in CAD unless stated otherwise
Quarter Recap
Q1 2026 Financials
Revenue: 29.8M vs 21.1M (+41.0% YoY)
Gross Profit: 15.2M vs 10.6M (+43.0% YoY)
Gross Margin: 51.0% vs 50.0% (+100 bps YoY)
Adjusted EBITDA: 6.2M vs 3.1M (+100.0% YoY)
Adjusted EBITDA Margin: 20.8% vs 14.7% (+610 bps YoY)
Geographical Breakdown
Canada revenue: 20.3M vs 19.3M (+5.0% YoY)
International revenue: 9.6M vs 3.0M (+220.0% YoY)
Segment and Other KPIs Breakdown
Domestic product mix
Infused pre‑rolls: 61% vs 60% (+1 pp YoY)
Vapes: 33% vs 34% (-1 pp YoY)
Straight pre‑rolls: 2% vs 3% (-1 pp YoY)
Flower: 3% vs 2% (+1 pp YoY)
Other: 1% vs 1% (flat YoY)
International mix
Flower: 87% vs 95% (-8 pp YoY)
Extracts: 7% vs 3% (+4 pp YoY)
Services: 6% vs 2% (+4 pp YoY)
Conference Call Notes
I took some quick notes while listening to the call, but I wanted to double check my notes with the transcript. Since I can’t get my hands on the transcript, I’ll use my notes and the MD&A. As well I grabbed some info from the recent YT interview here.
International demand
International shipments increased compared to prior periods
International revenue was 9.6M vs 3.0M (+220.0% YoY)
International represented 32% of total revenue vs 14% prior year (+18 pp YoY)
Additional international customers were added
Expecting strong growth from international moving forward
Domestic performance
Domestic revenue was 20.3M vs 19.3M (+5.0% YoY)
The company maintained strong market share in infused pre‑rolls
Vape category performance remained stable
Domestic pricing conditions remained competitive
Margin drivers
Gross margin was 51.0% vs 50.0% (+100 bps YoY)
Gross profit was 15.2M vs 10.6M (+43.0% YoY)
Margins benefited from product mix
Operational efficiencies contributed to margin stability
Cost structure improvements were referenced
Capital and financing
Total debt (including lease liabilities) was 63.7M vs 52.4M (+21.6% YoY)
Net debt was 57.6M vs 47.0M (+22.6% YoY)
Refinancing reduced 2026 principal payments by ~5M
Creston facility exit expected to reduce annual costs by ~4M beginning Q3 2026
Debt maturities were extended to 2030
Guidance & Outlook
Q2 revenue of 33M–35M, implying ~14% YoY growth at midpoint
Q2 adjusted EBITDA of 6.5M–7.5M
FY26 revenue of 130M–135M
FY26 adjusted EBITDA of 27M–31M
Valuation
DB is trading at 4.5x EV/ttm EBITDA and 4.3x EV/mid-point 2026 EBITDA. I have them at about 5x ttm FCF.
Closing Thoughts
The quarter was a step in the right direction in my mind.
Domestic market stability with
International growth in full swing
Debt refinanced increase flexibility
Reaffirmed guide for 2026
DB fits nicely in the cannabis basket. I am not sure what it will take for the market to give them a better multiple, but I continue to nibble.
Thanks for reading my work.
Dean
long DB.v