Village Farms International Soars 35.47% on Record Q2 Profitability

Village Farms International rose 35.47% in pre-market trading on August 11, 2025, marking a significant surge in its stock price.

Village Farms International reported a record profitability in the second quarter of 2025, with a net income of $26.5 million, or $0.24 per share. This represents a sharp turnaround from a net loss of $23.5 million in the prior year. The company's GAAP earnings per share rose to $0.24, exceeding analyst expectations. The company's GAAP revenue increased 12.0% to $59.9 million in Q2 2025, also exceeding consensus GAAP estimates. The company's Canadian cannabis business remained the largest and most profitable segment, showing notable gains in both gross margin and profitability. Net sales in Canada were $44.5 million, up 9%, with gross margin rising to 39% from 26% in the prior year. Net income for the Canadian cannabis segment was $6.5 million, while adjusted EBITDA more than doubled year over year, reflecting a planned shift toward higher-margin products and increased international sales. The company maintained a top-three overall market share in Canada year-to-date through July 2025 and maintained its number one spot in dried flower sales, demonstrating continued brand strength despite reducing lower-margin product sales. International sales increased 690% year-over-year, with medical cannabis exports from Canada surged 690% year-over-year, reaching C$16.6 million in international sales. This performance allowed the company to reach its full-year export target within the first half of FY2025. The U.S. cannabis segment stabilized profitability, even as net sales declined slightly to $3.8 million. Gross margins improved. This segment, which focuses on hemp and cannabidiol (CBD) products, has been hampered by regulatory uncertainty and limited growth catalysts, but cost management improved results. In the Netherlands, the company launched adult-use cannabis products, quickly capturing over 80% of eligible coffee shops in the regulated pilot market and generating $2.5 million in net sales with positive net income and adjusted EBITDA, despite being in an early ramp-up stage. The clean energy segment posted profits from landfill gas-to-energy projects. Across the business, Village Farms reported a GAAP end-of-quarter cash balance of $60.0 million, up from $24.6 million as of Q4 2024. Operating cash flow from continuing operations in the first half of FY2025 was $22.3 million, supporting continued investment in greenhouse expansion and new cannabis cultivation. Total debt at quarter’s end stood at $39.1 million as of June 30, 2025, and the company noted improved lending terms after refinancing core cannabis loans. The company’s Canadian cannabis portfolio, sold under brands such as Pure Sunfarms, remains focused on dried flower and has been supported by added product innovations, like new windowed packaging, and research on the consistency of tetrahydrocannabinol (THC) levels. Cannabis exports from Canada, primarily intended for medical use in regulated overseas markets, are now a core growth driver. These exports are high-margin. In the Netherlands, the company is among the limited licensed suppliers for adult-use cannabis in a pilot market that captures significant coffee shop demand. U.S. operations supply hemp-derived CBD wellness products in select states, facing slow but steady recovery. Meanwhile, the clean energy arm provides a recurring revenue stream from a royalty arrangement based on landfill-derived natural gas, utilized for power and heat generation. The company received $40 million in cash proceeds from the produce sale, with future upside tied to its Vanguard Food LP equity. Investments in greenhouse expansion are intensifying, including the Delta 2 facility in Canada, which is set to add significant cannabis production capacity in 2026, with Board approval for an expansion expected to yield an incremental 40 metric tons of annualized cannabis production. Notably, new investments were made to ramp up the next phase in the Netherlands, with completion of the Phase II facility expected in Q1 2026 and projected to quintuple current production capacity, further extending the company’s international reach. Looking ahead, management sees the trends established in the second quarter as sustainable. The company anticipates maintaining strong performance in international cannabis exports over the rest of fiscal 2025 and expects its Netherlands operation to deliver much higher output after the next expansion phase becomes operational. Management expressed continued focus on profitable organic growth and maintaining balance sheet strength as the company invests in new opportunities. Investors will want to monitor several key factors in coming periods: the pace of development in new international markets like the Netherlands, and another important area is the company’s ability to defend its Canadian cannabis market share year-to-date through July 2025, despite planned retail sales reductions. Village Farms’ exposure to the produce segment now comes through its minority stake in Vanguard Food LP, with value generation dependent on the success of this new partnership.