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 5^th 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 2^nd 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.

Conference Call

Management will host a conference call on Wednesday, August 27 at 9:00 am ET to discuss its Q2 2025 results. To access the conference call, please dial [phone] or [phone] and provide conference ID 62402

Alternatively, the conference call can be accessed online at: https://app.webinar.net/ln3Ymlpmpoj 

Selected Financial Highlights

The tables below set out selected financial information and should be read in conjunction with the Company's consolidated financial statements and MD&A for the three months ended June 30, 2025, which are available on SEDAR.

The following financial information has been summarized from the Company's unaudited condensed consolidated interim financial statements (excluding Gross Merchandise Sale ("GMS") and Adjusted EBITDA):

	Three months ended June 30,		Six months ended June 30,
	2025	2024	2025	2024
Gross Merchandise Sales^1	11,441,510	8,160,664	19,450,080	15,556,187
Total revenue	8,480,847	4,980,600	13,509,805	9,634,624
Adjusted EBITDA^1	958,016	(39,546)	990,315	(231,397)
Net income from continuing operations	201,031	(623,170)	179,422	(705,258)
Net income	200,086	(549,190)	603,206	(63,382)
Basic and diluted income per share from continuing operations and total	0.00141	(0.00479)	0.00127	(0.00556)
Total assets	10,625,159	7,261,540	10,625,159	7,261,540
Long-term liabilities	9,463,464	7,023,091	9,463,464	7,023,091

¹ Non-GAAP Financial Measure. Refer to section "Non-GAAP Financial Measures" for additional information.

Results from WholesalePet and Carnivore Club business have been reclassified to discontinued operations.

The following table presents Adjusted EBITDA for the three months ended June 30, 2025, and the Adjusted EBITDA loss for the three months ended June 30, 2024, along with a reconciliation of the Company's reported results to its adjusted measures.

	Three months ended June 30,		Six months ended June 30,
	2025	2024	2025	2024
Net income	200,086	(549,190)	603,206	(63,382)
Add back:
Finance costs	369,681	300,326	623,908	799,163
Income taxes (recovery)	108,915	36,105	189,462	(134,378)
Amortization	51,669	58,350	104,447	116,825
EBITDA	730,351	(154,409)	1,521,023	718,228
Share-based compensation	63,379	29,363	121,524	54,635
Transaction cost	16,259	231	29,217	101,589
Foreign exchange and other gains	(234,772)	159,249	(639,519)	(463,973)
Fair value adjustment to inventory acquired^1	381,854	-	381,854	-
Net income from discontinued operations	945	(73,980)	(423,784)	(641,876)
Adjusted EBITDA	958,016	(39,546)	990,315	(231,397)

¹ On completion of the acquisition of Tee2Green Inc., the Company acquired inventory with a book value of $2.8 million. As required under accounting standards for business combinations, the inventory was measured at fair value. The provisional fair value was determined to be $3.6 million, and approximately 52% of the inventory was sold in Q2, resulting in a portion of the fair value increment being recognized in cost of sales. The related fair value adjustment was excluded from Adjusted EBITDA, as it represents a non-recurring component. 

About EMERGE

EMERGE is a Canadian e-commerce and retail portfolio of premium brands. Our subscription, marketplace, and retail businesses provide our members with access to offerings across our grocery and golf verticals. truLOCAL is our flagship Canadian meat and seafood subscription service, connecting local farmers with a health-conscious audience. Our golf vertical includes our discounted tee-times/ experiences brand, UnderPar, and our discounted golf apparel and equipment brands, JustGolfStuff and Tee 2 Green.

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Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Non-GAAP Measures

This press release makes reference to certain non-GAAP measures. These non-GAAP measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of the Company reported under IFRS. Gross Merchandise Sales ("GMS"), EBITDA, and Adjusted EBITDA should not be construed as alternatives to revenue or net income/loss determined in accordance with IFRS. GMS, EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.

GMS as defined by management is the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of discounts and refunds. Management believes GMS provides a useful measure for the dollar volume of e-commerce transactions made through our platforms and an indicator for our business performance.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA as defined by management means earnings before interest and financing costs, income taxes, depreciation and amortization, transaction costs, foreign exchange gains/losses, discontinued operations, unrealized gains/losses on contingent consideration and share-based compensation. Management believes that Adjusted EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.

A reconciliation of the adjusted measures is included in the Company's management discussion & analysis for the three months ended June 30, 2025 in the section "Non-GAAP Financial Measures" available through SEDAR at www.sedar.com.

Notice regarding forward-looking statements

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including, without limitation, statements related to the closing of the Transaction and the timing thereof, the satisfaction of all conditions precedent to the closing of the Transaction, including, without limitation, TSXV approval in respect of the Transaction, any benefit that may be derived by the Company from the Transaction, including, without limitation, any material benefit to the working capital or financial position of the Company as a result of the Transaction, expectations regarding cash flow both as a result of the Transaction and in general, as well as other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. There is no guarantee the Transaction will be completed as contemplated or at all, and the forward-looking information contained herein is based on the assumptions of management of the Company as of the date hereof including, without limitation, assumptions with respect to the financial position, cash flow, and working capital of the Company, the ability of the Company to obtain TSXV approval for the Transaction and the satisfaction of any other conditions thereto, and the conditions of the financial markets and the e-commerce markets generally, among others. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including risks related to the disposition of an operating business by the Company, risks that the benefits derived from the Transaction may not be as expected or that the Company may not see any benefit from the Transaction, risks that each party to the Agreement may not satisfy its obligations or covenants, risks that the Company may be subject to litigation as a result of the Transaction including allegations of misrepresentation or breach of conditions or covenants, risks that the TSXV may not approve the Transaction, as well as the risk factors discussed in the Company's MD&A, which is available through SEDAR+ at www.sedarplus.ca. The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

On Behalf of the Board
Ghassan Halazon
Director, President, and CEO
EMERGE Commerce Ltd.

SOURCE Emerge Commerce Ltd.

SOURCE Emerge Commerce Ltd.

For further information: Dasha Enenko, EMERGE Commerce Ltd., 416-479-9590, [email protected]