KITS Eyecare Reports Record First Quarter 2025 Results

Revenue Increased 34% Year-Over-Year to a Record $46.6 million
Adjusted EBITDA of 7.4%, Improving Year-Over-Year to a Record $3.5 million
Tenth Consecutive Quarter Reporting Positive Adjusted EBITDA

VANCOUVER, BC, May 6, 2025 /CNW/ - Kits Eyecare Ltd. (TSX: KITS) ("KITS" or the "Company"), a leading vertically integrated eyecare provider, is reporting its results for the first quarter ended March 31, 2025.

First Quarter 2025 Financial & Operational Highlights

For the first quarter of 2025, compared to the first quarter of 2024:

• Revenue increased by 34.0% to a record $46.6 million compared to $34.8 million
• Gross profit was $17.1 million, or 36.7% of revenue, compared to $11.2 million or 32.1% of revenue
• Adjusted EBITDA improved by $2.9 million to $3.5 million compared to $0.6 million
• Net income was $1.6 million compared to net income of $0.06 million
• Glasses revenue increased by 46.4% to a record $6.7 million compared to $4.6 million
• Record breaking 104,000 pairs of glasses delivered in the quarter compared to 75,000 pairs of glasses

Management Commentary

"We are pleased to deliver another quarter of record results, with revenue up 34% year-over-year and gross profit increasing by over 50%," said Roger Hardy, Co-Founder and CEO of KITS. "These results reflect the strength of our vertically integrated model and our team's continued focus on operational efficiency. With 104,000 pairs of glasses delivered this quarter and our highest Adjusted EBITDA margin to date, we remain confident in our ability to drive sustained profitable growth while advancing our mission to make eyecare easy."

First Quarter 2025 Financial Results

Revenue increased by 34.0% to $46.6 million compared to $34.8 million in the first quarter of 2024. The continued appeal of our eyecare offerings for both contact lenses and glasses fueled this expansion, setting a solid foundation for sustained momentum throughout the remainder of the year.

Gross profit increased by 53.2% to $17.1 million compared to $11.2 million in the first quarter of 2024, while gross margin increased by 460 basis points to 36.7% compared to 32.1% in the first quarter of 2024. The increase was primarily achieved through targeted promotions focused on acquiring higher-value new customers and retaining repeat customers.

Net income improved to $1.6 million, or $0.05 per share (basic), compared to a net income of $0.06 million, or $0.00 per share (basic), in the first quarter of 2024. The improvement was primarily attributable to an improvement in revenue, fulfillment and marketing efficiency.

EBITDA increased by $1.9 million to $3.1 million compared to $1.2 million in the first quarter of 2024, while Adjusted EBITDA improved by 468% to $3.5 million compared to $0.6 million in the first quarter of 2024. The improvement in Adjusted EBITDA was primarily driven by consistent and stable recurring customer orders that deliver an annuity of recurring long-term earnings and profitability as well as our continued focus on balancing growth and profitability

On March 31, 2025, cash and cash equivalents totaled $17.7 million compared to $19.3 million on December 31, 2024.

Second Quarter 2025 Outlook

For the second quarter of 2025, KITS management expects revenue to be in the range of $48.0 million to $50.0 million, with Adjusted EBITDA as a percentage of revenue between 3.0% and 5.0%. See "Forward-Looking Statements" below for important disclosure with respect to expectations and forward-looking information.

Conference Call

KITS management will host a conference call followed by a question-and-answer period. To access the call instantly, please click here to register your name and phone number via the rapid connect link.

The conference call will also be webcast live with a presentation and available for replay here and via the investor relations section of the Company's website at www.kits.com.

Date: Wednesday, May 7, 2025
Time: 9:00 a.m. Eastern time (6:00 a.m. Pacific time)
Presentation webcast link: https://app.webinar.net/d9Zq7Z3OyVm
Rapid connect link: https://emportal.ink/4iIMMDT         
North American toll-free number: 1-888-510-2154
Local Toronto dial-in number: 1-437-900-0527
Confirmation #: 41795 #

Financial Highlights

The following selected financial information is qualified in its entirety by and should be read conjunction with our consolidated financial statements for the years ended March 31, 2025 and 2024 and accompanying notes and Management's Discussion and Analysis ("MD&A") which may be viewed on SEDAR at www.sedarplus.ca.

	Three Months Ended
Financial and Operating Data	March 31, 2025 (unaudited)			March 31, 2024 (unaudited)
Revenue	$	46,595		$	34,782
Net income (loss)	$	1,603		$	64
Net income (loss) per share
Basic	$	0.05		$	0.00
Diluted	$	0.05		$	0.00
Non-IFRS Measures (a):
Constant currency revenue	$	44,671		$	34,782
EBITDA	$	3,102		$	1,157
Adjusted EBITDA	$	3,461		$	609
Adjusted EBITDA Margin % (d)		7.4 %			1.8 %
Reconciliation of constant currency revenue
Revenue	$	46,595		$	34,782
Foreign exchange impact		(1,924)			-
Constant Currency Revenue	$	44,671		$	34,782
Change in constant currency	$	9,889
Change in constant currency %		28.4 %
Reconciliation of Adjusted EBITDA
Net income (loss) for the period	$	1,603		$	64
Add back:
Income taxes		704			18
Finance (income) costs – net		171			320
Depreciation and amortization		624			755
EBITDA	$	3,102		$	1,157
Add back
Share-based compensation (b)	$	269		$	270
Exchange loss / (gain)		87			(821)
One-time costs (c)		3			3
Adjusted EBITDA	$	3,461		$	609
Revenue	$	46,595		$	34,782
Adjusted EBITDA Margin % (d)		7.4 %			1.8 %

Notes:
(a)	Refer to "Non-IFRS Measures and Industry Metrics" section of the MD&A filed on www.sedarplus.ca and below.
(b)	Represents non-cash share-based compensation expense associated with restricted share rights ("RSRs") and options recognized in the period.
(c)	One-time IPO directors' and officers' insurance costs which are expensed over the insurance coverage period.
(d)	Represents Adjusted EBITDA divided by revenue from the same period.

About KITS

KITS makes eyecare easy. KITS is a leading vertically integrated digital eyecare brand providing eyewear for eyes everywhere. We offer customers access to a vast selection of contact lenses and eyeglasses, including our own exclusive KITS designed products, as well as a robust suite of online vision tools. Our efficient digital platform, backed by our industry-leading manufacturing and designs, removes intermediaries, and enables us to offer great prices and deliver made to order personalized products with incredible care and accuracy. We are creating disruption in the industry by constantly pursuing cutting-edge technologies to enable the best customer experience, including online eyewear fitting tools, and virtual try-on for glasses. We strive to delight our customers with our competitive prices, a convenient digital shopping experience, fast and reliable delivery options, and an unrelenting focus on earning our customers' lifelong trust. For more information on KITS, visit: www.kits.com.

Non-IFRS Financial Measures and Industry Metrics

This press release includes references to certain non-IFRS financial measures such as Constant Currency Revenue, ate, EBITDA and Adjusted EBITDA, and certain industry metrics. These financial measures and industry metrics are employed by the company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the company's operating and financial performance. These financial measures are not defined under IFRS, nor do they replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure and Industry Metrics can be found in our Management's Discussion and Analysis. Such non- IFRS reconciliations can also be found in this press release under "Financial Highlights".

Forward-Looking Statements

This press release contains forward-looking statements, including statements relating to the execution of our proposed strategy, our operating performance, our expectations and outlook for the second quarter of 2025 and prospects for the business. These forward-looking statements generally can be identified by the use of words such as "intend," "believe," "could," "continue," "expect," "estimate," "forecast," "may," "potential," "project," "plan," "would," "will," and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such a statement. Our business is subject to substantial risks and uncertainties. This forward-looking information and other forward-looking information are based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of the expansion and enhancement of our fulfillment network, including our optical laboratory for glasses and warehouse facilities; the growth of our business and launch of new technologies; premium lens adoptions and smart eyewear expansion; our ability to drive sales growth; our ability to maintain, enhance, and grow within our addressable market; our ability to drive ongoing development and innovation of our exclusive brands and product categories; our ability to continue directly sourcing from third party suppliers and manufacturers; our ability to retain key personnel; our ability to add, maintain and expand production, distribution and fulfillment capabilities; our ability to continue investing in infrastructure to support our growth; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; the impact of tariffs and U.S. and international trade actions, policies and reform; and the changes in laws, rules, regulations, and global standards. KITS' risks and uncertainties are discussed in detail in the company's Annual Information Form, filed on SEDAR on March 5, 2025. Investors, potential investors, and others should give careful consideration to these risks and uncertainties. We caution investors not to rely on the forward-looking statements contained in this press release when making an investment decision in our securities. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements, except as required under applicable securities laws.  If we do update certain forward-looking information, no inference should be made that we will further update such or other forward-looking information.

SOURCE KITS Eyecare Ltd.

Investor Relations Contacts: Olivia Evans, Director of Corporate Development and Investor Relations, [email protected]