cbdMD's Q2 2025: Unpacking Contradictions in Herbal Oasis Growth, Cash Burn, and Financial Strategy

Herbal Oasis revenue and growth impact, cash burn and liquidity status, financial flexibility and strategic maneuvering, herbal oasis growth and revenue impact, and cash burn and cash generation are the key contradictions discussed in cbdMD's latest 2025Q2 earnings call.



Capital Structure Restructuring:
- cbdMD successfully converted its Series A Preferred Stock into common stock, raising its pro forma non-GAAP adjusted book value from approximately $670,000 to over $7 million as of March 31, 2025.
- This move eliminated legacy obligations and simplified the company's capital structure, positioning it for regulatory compliance and future strategic opportunities.

Operational and Financial Improvement:
- The company's SG&A expenses decreased to $3.5 million in Q2 fiscal 2025, down from $4.1 million in the prior year comparative quarter.
- The improvement was primarily due to reductions in payroll, professional fees, and other cost-saving initiatives, contributing to a loss from operations of approximately $485,000, as compared to a $1.5 million loss in the prior year period.

Herbal Oasis Expansion:
- cbdMD's hemp-derived THC seltzer brand, Herbal Oasis, was awarded for all four flavors at the 2025 High Spirits Awards.
- The company increased distribution partners in Alabama, Florida, and North Carolina, with new markets and retail placements in the pipeline, despite regulatory challenges slowing rollout momentum in Q2.

Revenue and Earnings:
- Total net sales for Q2 fiscal 2025 were $4.7 million, representing an 8.6% increase from the prior year comparative quarter.
- The increase was due to a 22% rise in wholesale revenue and operational cost reductions, although direct-to-consumer business remained flat year-over-year.