EMERGE Reports Strong Q2 2025 Results
Revenue increased 70% YoY to $8.5M
Adj. EBITDA improved to $958K, an increase of $1M YoY
Cash position grew to $3.5M (June 30, 2025) vs. $2.7M (March 31, 2025), despite $1.1M spent to close Tee 2 Green ("T2G") acquisition, driven by strong cash flow generation
Q3 2025 Outlook: Double-digit revenue growth and positive Adj. EBITDA
TORONTO, Aug. 27, 2025 /CNW/ - EMERGE Commerce Ltd. (TSXV:ECOM) ("EMERGE" or the "Company"), a Canadian portfolio of premium brands, today announced its financial results for the three months ended June 30, 2025. Copies of the interim Financial Statements and MD&A are available on the Company's profile on SEDAR at www.sedar.com.
Q2 2025 Financial Highlights
For the second quarter of 2025, compared to the second quarter of 2024:
Revenue grew to $8.5M vs. $4.98M, an increase of 70% YoY, marking the 5th consecutive quarter of revenue growth. Both grocery and golf verticals achieved positive organic growth
Gross profit grew to $3.1M vs. $2.1M. Excluding $382K fair value of inventory adjustment in relation to T2G, a non-cash item, gross margin would be approximately 41.0% vs. 41.3%
Adj. EBITDA1 improved to $958K vs. ($40K), an increase of $1M YoY, marking the 2nd consecutive quarter of positive Adj. EBITDA and our strongest result since re-focusing EMERGE around Grocery and Golf verticals
Net Income from continuing operations improved to $201K vs. ($623K). Excluding $382K fair value of inventory adjustment in relation to T2G, a non-cash item, net income from continuing operations would be $583K
Cash flow from operations of $2M vs. ($0.2M) in Q2 2024
Cash position grew to $3.5M (June 30, 2025) vs. $2.7M (March 31, 2025) and $2.2M (June 30, 2024). Cash grew quarter-over-quarter, despite the $1.1M spent to close the T2G acquisition in early Q2
Q2 marks the first quarter with the results of T2G included, as the acquisition was completed on April 4, 2025.
Ghassan Halazon, Founder and CEO, EMERGE commented, "Q2 was a break-through quarter for the Company. We drove exceptional revenue growth, profitability and cash flow generation. We closed the transformative acquisition of T2G, and subsequently super-charged that brand, historically a low growth business, to high double-digits in its first quarter under EMERGE, leveraging our digital ads playbook and cross-brand synergies with our golf portfolio. We also continued to drive positive organic growth at truLOCAL, a benefactor of the "Buy Canadian" consumer sentiment. Special thanks to our team, Board, and trusted partners on a standout quarter of operational execution and strategic precision. We plan to remain disciplined, focused and opportunistic in the quarters and years ahead."
Q2 2025 Strategic Highlights
Acquisition of Tee 2 Green
On April 4, 2025, EMERGE closed the acquisition of Tee 2 Green, a profitable, discount golf apparel and equipment business with a 38-year track record of retail operations, focused on the Canadian market. T2G achieved revenue of $6.4M, Adjusted EBITDA(1) of $1M and net income of $700K in 2024 (unaudited).
EMERGE utilized the cash proceeds from the Carnivore Club asset sale, as well as the previously announced sale of the premium, dormant SHOP domains to Shopify (TSX:SHOP) towards closing the T2G acquisition.
T2G's first quarter under EMERGE ownership, Q2 2025, delivered exceptional organic revenue growth and profitability, exceeding management's expectations. The strong performance was fueled by EMERGE's targeted digital advertising and cross-brand synergies within its golf vertical. Cash flow generated by T2G in its first quarter under EMERGE comfortably exceeded the $1.1M upfront cash payment made by EMERGE to complete the transaction.
Debt Refinancing
Alongside the T2G transaction on April 4, 2025, the Company also entered into a first amendment (the "Amended Facility") to the second amended and restated credit agreement dated January 31, 2024 with its existing lender. The Amended Facility provides an 18-month extension, and an additional 6-month extension option provided that lender consent is obtained. Inclusive of the 6-month extension, the Amended Facility would mature in April 2027. The Company remains in good standing with its existing lender, which it has worked with since November 2019. The recent interest rate cuts, and the anticipated upcoming rate reductions, are expected to result in meaningful cash savings.
The Company also anticipates that its materially improved profitability, cash position and leverage profile could be helpful for purposes of accessing cheaper, longer-term debt refinancing options in the future.
Q3 2025 Outlook
For Q3 2025, EMERGE management is seeing continued operational momentum QTD, and expects to achieve another quarter of double-digit revenue growth, and positive Adjusted EBITDA(1).
truLOCAL, our premium, Canadian meat and seafood subscription brand, is expected to continue to be a benefactor of the "Buy Canadian" sentiment.
Our discounted golf experiences and products vertical is expected to continue to gain from the weakening macro climate given the recession-friendly nature of the business model.
See "Forward-Looking Statements" below for important disclosure with respect to expectations and forward-looking information.
Acquisition Pipeline
Building off our early success acquiring and accelerating T2G, EMERGE is selectively advancing accretive acquisition opportunities, specifically in the grocery and golf verticals, where we have amassed deep expertise, bench strength, brand awareness and substantial customer databases. EMERGE's focus is exclusively on profitable acquisition candidates with $750K-$2M in Adj. EBITDA, with a long-standing track record of revenue stability and cash flow generation.
Top Priorities
The Company's top priorities in the near-term are to i) continue to drive organic revenue growth, ii) extract synergies to drive profitability, iii) explore accretive tuck-in acquisition opportunities in the grocery and golf verticals; and iv) opportunistically explore avenues to enhance cash flow and reduce interest expense.
