cbdMD (NYSEAMERICAN:YCBD) reported first fiscal quarter 2026 results and provided a business update, highlighting a third consecutive quarter of sequential revenue growth, steps to strengthen its balance sheet, and the mid-January acquisition of Bluebird Botanicals’ assets.
Revenue trends and channel mix
Chief Executive Officer and Chief Financial Officer Ronan Kennedy said the first quarter of fiscal 2026 represented “another important step forward in stabilizing and rebuilding” the company, citing “three quarters of sequential revenue growth” and quarterly revenue of “just over $5 million,” up 12% from the fourth quarter of fiscal 2025.
By channel, the company said direct-to-consumer remained its largest contributor at about 72% of total revenue, while wholesale represented 28%. Kennedy described wholesale growth as an important indicator of improved execution across the core cbdMD brand and continued progress for its beverage brand, Oasis. He added that regulatory challenges created “packaging and compliance-related confusion” among customers tied to proposed and newly enacted rules, but said management was encouraged by wholesale momentum despite that backdrop.
Bluebird Botanicals acquisition and integration plans
Kennedy said the company’s capital structure had historically limited its ability to pursue “accretive M&A,” but after converting its Series A Preferred in May and regaining full NYSE American continued listing compliance, it was able to reengage on strategic opportunities. He said the company completed an asset acquisition of Bluebird Botanicals in mid-January.
Management characterized the transaction as strategically important for several reasons, including:
- Adding incremental revenue and a loyal customer base, with an aim to build a broader wellness portfolio beyond CBD.
- Adding intellectual property including GRAS status for full-spectrum CBD, which Kennedy said balances cbdMD’s safety and clinical data on THC-free broad-spectrum CBD.
- Strengthening the company’s regulatory and scientific position.
Kennedy said second-quarter priorities include integrating Bluebird by consolidating supply chain, marketing, and other operational areas, while extracting costs and revenue synergies. He added the acquisition was structured with limited upfront equity and a performance-based earn-out, which management said was intended to mitigate risk, and described Bluebird as providing a “step function increase in revenue and attractive contribution margins.”
In response to an analyst question, Kennedy said the acquired business had a small team and that cbdMD had brought over several people. He also said cbdMD sees opportunities to leverage its supply chain and SKU mix to fill gaps in Bluebird’s portfolio, as well as applying its experience in building acquisition funnels to grow the brand.
On brand strategy, Kennedy said cbdMD intends to maintain cbdMD and Bluebird as separate brands, noting the Bluebird customer is “slightly different” and that management sees an opportunity to grow the acquired customer base.
Profitability, margins, and cash flow
Chief Accounting Officer Brad Whitford reported net sales of $5.0 million, compared with $5.1 million in the prior-year period, and reiterated the 12% sequential increase from the fourth quarter of fiscal 2025.
Gross margin was 60% in the quarter, down from 66% a year earlier. Whitford attributed the decline primarily to higher warehouse expense during the year and a shift in revenue mix toward wholesale, alongside product mix and “continued pricing discipline.”
Loss from operations was approximately $286,000, compared with a loss of $86,000 in the prior-year period. Net loss attributable to common shareholders was about $325,000, or $0.04 per share, compared with a net loss of approximately $1 million, or $1.73 per share, in the prior-year quarter. Whitford said the per-share improvement was mainly driven by the elimination of the Series A preferred dividend during fiscal 2025 and the conversion of Series A into common stock.
Adjusted non-GAAP EBITDA loss was $36,000, and Whitford said the company remains focused on generating positive EBITDA.
Whitford said cash used in operating activities totaled roughly $812,000, reflecting the minimal EBITDA loss along with a roughly $200,000 inventory investment, a $225,000 increase in prepaids (including annual insurance and ERP contracts), and an approximate $300,000 reduction in payables. He said the first fiscal quarter typically requires more working capital than other quarters, and added that excluding the Bluebird acquisition, management does not expect the same working-capital build in the next quarter.
Balance sheet actions and regulatory commentary
Kennedy said the company received notice from the NYSE in early December confirming it had regained compliance with continued listing requirements and that its temporary status had been removed.
During December, cbdMD completed approximately $2.25 million in Series C Preferred financing. As of December 31, 2025, the company ended the quarter with approximately $3.4 million in cash and $5.4 million in working capital, which Kennedy said were meaningfully higher than at fiscal year-end. Whitford separately reported cash and cash equivalents increased by about $1.1 million to $3.3 million during the quarter, driven by the Series C financing.
Kennedy also said the company structured a $20 million equity line of credit to provide flexibility to strengthen the balance sheet under favorable market conditions while seeking to minimize costs and dilution. He noted that in the second half of calendar 2025, cbdMD’s stock price and volume reacted favorably to certain news announcements and that the company was unable to fully capitalize on those moves, adding that management believes the facility will allow it to do so more prudently in the future.
On regulation, Kennedy said the environment remains “active and at times uncertain.” He referenced restrictive hemp language included in H.R. 5371 enacted in November, which he said could have industry-wide impact if left unchanged, while also noting bipartisan efforts to revisit restrictive hemp legislation, including the Hemp Act introduced in January. Kennedy said cbdMD supports the Hemp Act, describing it as offering more reasonable per-serving limits and stronger consumer protections, clarity, and enforcement consistency.
He also said the company continues to engage with industry organizations and policymakers, including time on Capitol Hill. Kennedy added that cbdMD is pursuing efforts and incurring costs to participate in CBD programs referenced in December 17 executive orders regarding CBD usage for Medicare ahead of an April pilot program.
Looking ahead, Kennedy said priorities include continued sequential revenue improvement, successful integration of Bluebird, cost and margin discipline, and responsible navigation of the regulatory landscape. In the Q&A, he added that Oasis is “starting to contribute” but remains small relative to the core cbdMD brand, and said the company expects improvement over the year and will reassess what it is willing to disclose as progress continues.
About cbdMD (NYSEAMERICAN:YCBD)
cbdMD, Inc (NYSEAMERICAN: YCBD) is a Charlotte, North Carolina–based producer and distributor of hemp-derived cannabidiol (CBD) products. Since its founding in 2018, the company has focused on developing a diverse portfolio of wellness offerings designed for human and pet use. Its product range includes tinctures, capsules, gummies, topicals, and pet-specific formulations, each developed to comply with U.S. Food and Drug Administration (FDA) guidelines for hemp-derived substances.
The company operates a vertically integrated business model, sourcing U.S.-grown hemp and overseeing manufacturing processes in cGMP-certified facilities.
