cbdMD (YCBD) Q3 FY26 earnings call: guidance and Q&A

Clarification on whether the $100k-$150k monthly savings are cash-based and the timing of their full realization, and the current cash flow break-even revenue run rate.

The savings are cash-based, mostly realized by end of August, with a small portion of lease savings bleeding into October. The cash flow break-even revenue run rate is now estimated in the low to mid $6 million per quarter.

“Yes, those numbers were cash related, Adam. [...] Correct, low six millions to mid six millions? That is how we are modeling this out right now.”

asked by Adam Waldo · answered by Ronan Kennedy

Whether the company intends to be cautious on new marketing initiatives and product launches until federal regulatory clarity emerges.

The company will be cautious on major new marketing initiatives, focusing on leveraging existing distribution and customer bases for new launches, while being as cautious as possible with marketing spend.

“I think that's fair. We do have a few new launches that we're planning, but I think it's leveraging existing distribution channels that we have and existing customer bases that we're focused on, but I think we are being… as cautious as we can in sort of the marketing spend as we sort of look to the end of the.”

asked by Adam Waldo · answered by Ronan Kennedy

What is driving the acceleration in Oasis depletions – expanding distribution or higher sell-through at existing doors?

It's a combination of both: focused investment in sales resources and programming within distributors and retailers, ensuring alignment with the right partners, and driving sell-through through those accounts.

“A great, great question, Thomas. I think it's a little bit of both. I think we've been very focused on our territory. in investing in sales resource and programming within our distributors and retailers.”

asked by Thomas McGovern · answered by Ronan Kennedy

Timing of the new Texas distribution partner and initial sell-through rates.

The move was made at the end of June. Sell-through has strengthened, with good results in adding doors and sales. Recent state updates restricting synthetic cannabinoids have also accelerated sales of hemp-derived THC products.

“Yes, great question. Look, I think we made that move right at the end of June, so I think some revenue from the quarter came from some of that, from the, post move, but since then we've seen kind of things strengthen and are seeing good results both in adding doors and self-healing some of the doors as well.”

asked by Thomas McGovern · answered by Ronan Kennedy

How the go-to-market strategy for the Kava beverage differs, its target demographic, and marketing, and if it was launched during or after the quarter.

The Kava Oasis beverage was launched today (call date). It's part of a strategy to fill empty shelf space created by regulatory uncertainty around THC products, offering a non-alcoholic, relaxing botanical alternative. The focus was on achieving good flavor for challenging botanicals.

“Tom, that was launched today. So today is sort of the first day that that product is available. And where that, you know, that came from is we have been looking at a number of other botanicals to help support the herbal oasis this brand, knowing that, you know, customers have moved into the, you know, there's been a strong movement into the hemp-derived THC sort of beverage space, and part of that is they're seeking a non-alcoholic solution that's going to help them, you know, relax and unwind.”

asked by Thomas McGovern · answered by Ronan Kennedy

Expectation of timeline for other botanical product launches and whether they would be developed in-house or acquired.

The company is aggressively working on formulations for one or two other botanicals and expects announcements before year-end. They are also open to acquisitions in this category and beyond functional beverages.

“As mentioned, we have one or two other ingredients that we're working on formulations with. So we, you know, we're moving as aggressively as we can. Part of this is making sure we get the right flavor, and some of these are a little bit more challenging. It's newer categories to do that with. So I would expect before the end of the year, you know, some announcements around some other botanicals.”

asked by Thomas McGovern · answered by Ronan Kennedy

How the revenue mix between wholesale and direct-to-consumer (DTC) might evolve, given the shift towards wholesale.

Regulatory changes, such as the Hemp Parity Bill, suggest a shift towards a three-tier system (like alcohol), which would force more revenue into wholesale, especially for intoxicating products. States like Tennessee are already banning DTC sales of THC-containing products.

“I wish I could give you great clarity, but someone that's relying on sort of regulatory changes, I think it would be prudent to think that as a, As regulators, when you look at some of the regulation that's coming out, like the Hemp Parity Bill that came out this week, what they're fundamentally doing is saying, look, if people are concerned about keeping these products away from kids, you using the traditional alcohol industry is a very logical way to think about regulating this product. And that means it could end up ultimately going through a three-tier system which would, by result force more of the revenue into sort of a wholesale type business.”

asked by Thomas McGovern · answered by Ronan Kennedy

Whether the company prefers to wait for more regulatory clarity before pursuing M&A, or if they can structure deals to be accretive despite uncertainty.

The company is focused on accretive transactions irrespective of regulatory changes, aiming to drive shareholder value and short-term cash flow as quickly as possible, both in core business and M&A.

“I think we are focused on getting transactions done that we think will be accretive. Irrespective of changes in regulation and we're on a mission to drive shareholder value and have to make decisions in light of some uncertainty, you know, looking out over the next 12 months.”

asked by Adam Waldo · answered by Ronan Kennedy