Organigram Global (OGI.TO) swung to net loss in the second quarter as net revenue fell in the quarter, and updated its fiscal 2026 guidance, the company said on Tuesday.
Second quarter net loss was C$0.9 million compared to net income of $42.5 million in Q2 Fiscal 2025. The decrease in net income in the current period was primarily attributable to lower fair value gains on derivative liabilities and preferred shares, as well as lower net revenue and gross margins compared to the prior year period, said the company. It added that the current period results were negatively impacted by a $5.8 million impairment loss related to the company's hemp-derived products business in the U.S.
Second quarter net revenue decreased 9% to $59.8 million, from $65.6 million in the second quarter ended March 31, 2025, primarily driven by lower vape and infused pre-roll sales, said the company. The consensus estimates compiled by FactSet for Sales was $70.3 million.
"Q2 reflected our underperformance in vapes and temporary challenges in infused pre-roll production, compounded by slower industry growth," said James Yamanaka, Chief Executive Officer of Organigram. "We acted quickly to address these issues, and the operational changes and product enhancements we have implemented are already beginning to stabilize performance. Combined with continued improvements in yields and flower potency, and the contribution from Sanity Group beginning in Q3, we believe the business is positioned for stronger execution and improved performance in the second half of fiscal 2026."
As of March 31, 2026, the company had total cash, including restricted cash and short-term investments, of $54.8 million. Subsequent to quarter end, it deployed the majority of its total cash position in consideration of the Sanity Group acquisition and secured $60 million in debt financing from ATB Financial of which $20 million was allocated to the Sanity Group acquisition, the company added.
The company is now projecting net revenue to exceed $350 million in fiscal 2026, with adjusted EBITDA and adjusted gross margin exceeding fiscal 2025 performance, free cash flow approximately break even, and capital expenditures of less than $10 million.
"Following the acquisition of Sanity Group, which closed in April 2026, the company is updating its Fiscal 2026 guidance. Prior to the acquisition, shipments to Sanity Group were recognized as revenue upon shipment to Sanity Group; post-acquisition, shipments to Sanity Group are recognized as revenue upon ultimate sale by Sanity Group to third parties."
The company originally issued its fiscal 2026 guidance in Q4 Fiscal 2025, prior to the acquisition of Sanity Group, which closed in April 2026, and had contemplated net revenue exceeding $300 million, higher adjusted gross margin and adjusted EBITDA relative to fiscal 2025, positive free cash flow, and capital expenditures of less than $10 million.