CV Sciences, Inc. (CVSI) Q3 2025 Earnings Call Prepared Remarks Transcript

CV Sciences, Inc. (CVSI) reported Q3 2025 revenue of $3.3 million, a sequential decrease, while achieving a 48.5% gross margin and an adjusted EBITDA loss of $118,000, reflecting continued efforts towards profitability and cost efficiency, partly through in-sourcing manufacturing via its Elevated Softgels acquisition. The company is diversifying its product portfolio with non-cannabinoid offerings, with new products contributing 39% of Q3 revenue. A key development is new federal legislation restricting hemp products with over 0.4mg THC, though its enforcement is delayed until November 2026, allowing CVSI to actively lobby for a more balanced regulatory framework and adapt its strategy.

Analysis

CV Sciences reported Q3 2025 revenue of $3.3 million, a sequential decline from $3.6 million in Q2 2025 and a 16% year-over-year decrease, primarily due to unit sales decline and restrictive state regulations. Despite this, the company maintained a strong gross margin of 48.5% and reduced its adjusted EBITDA loss to $118,000, signaling progress towards its stated goal of profitability and positive cash flow in 2026. Cost-saving initiatives, including a 12% year-over-year reduction in SG&A, contributed to this operational improvement.

Strategic initiatives are focused on diversification and efficiency. The acquisition of Elevated Softgels is facilitating in-source manufacturing, with full cost savings expected in 2026 results, and the company is actively pursuing further bolt-on acquisitions. New product innovation, including a push into non-cannabinoid offerings under the +PlusHLTH brand, is a key growth driver, with products launched since early 2023 accounting for 39% of Q3 revenue.

A significant regulatory challenge emerged with new federal legislation disallowing hemp products with over 0.4mg THC per container, though enforcement is delayed until November 13, 2026. CV Sciences plans to leverage this one-year window to actively lobby Congress for a balanced regulatory framework, citing bipartisan support. The company is adapting its product development to mitigate these regulatory risks and position itself for the evolving market.

Key Decisions for Investors

• Monitor the company's progress in lobbying for sensible federal hemp regulation, as the current legislative uncertainty poses a significant risk to its core business
• Evaluate the effectiveness of CV Sciences' product diversification strategy into non-cannabinoid offerings and the financial impact of in-sourcing manufacturing from the Elevated Softgels acquisition on 2026 profitability
• Assess the company's ability to achieve positive operating cash flow in 2026, considering the sequential revenue decline and ongoing regulatory headwinds