ORGANIGRAM GLOBAL INC.
For the period ended Sep 30, 2025. Filed Dec 16, 2025.
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The yearly report of certain Canadian companies, filed under a joint US and Canadian system. It is the main yearly account these companies give US investors, largely as filed in Canada.
FY2025 · Filed Dec 16, 2025
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EX-99.5 · ADJUSTED GROSS MARGIN
ADJUSTED GROSS MARGIN
Adjusted gross margin is calculated by subtracting cost of sales, before the effects of: (i) unrealized gain on changes in fair value of biological assets; (ii) realized fair value on inventories sold and other inventory charges; (iii) realized fair value on inventories sold from acquisitions; (iv) provisions and impairment of inventories and biological assets; and (v) provisions to net realizable value. The Company believes that this measure provides useful information to assess the profitability of the Company's operations as it represents the normalized gross margin generated from operations and excludes the effects of non-cash fair value adjustments on inventories and biological assets, which are required by IFRS. See "Cautionary Statement Regarding Certain Non-IFRS Measures". The most directly comparable measure to adjusted gross margin calculated in accordance with IFRS is gross margin before fair value adjustments.
| Q1-F24 | Q2-F24 | Q3-F24 | Q4-2024 | Q1-F25 | Q2-F25 | Q3-F25 | Q4-F25 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|
| Net revenue | $36,455 | $37,628 | $41,060 | $44,698 | $42,730 | $65,600 | $70,792 | 80,061 | 259,183 |
| Cost of sales before adjustments | 25,259 | 26,019 | 26,474 | 28,155 | 28,451 | 43,679 | 46,566 | 49,483 | 168,179 |
| Adjusted gross margin | 11,196 | 11,609 | 14,586 | 16,543 | 14,279 | 21,921 | 24,226 | 30,578 | 91,004 |
| Adjusted gross margin % | 31% | 31% | 36% | 37% | 33% | 33% | 34% | 38% | 35% |
| Less: | |||||||||
| Provisions of inventories and biological assets | 1,672 | 314 | 628 | 2,043 | 13 | 548 | 921 | 1,603 | 3,085 |
| Provisions to net realizable value | 13 | 33 | 71 | 709 | 151 | — | 15 | 967 | 1,133 |
| Realized fair value on inventories sold from acquisitions | — | — | — | — | — | 1,586 | 867 | — | 2,453 |
| Gross margin before fair value adjustments | $9,511 | $11,262 | $13,887 | $13,791 | $14,115 | $19,787 | $22,423 | $28,008 | $84,333 |
| Gross margin % (before fair value adjustments) | 26% | 30% | 34% | 31% | 33% | 30% | 32% | 35% | 33% |
| Add: Realized fair value on inventories sold and other inventory charges | $(11,923) | $(11,062) | $(13,728) | $(15,365) | $(13,066) | $(14,192) | $(14,461) | $(25,406) | $(67,125) |
| Unrealized gain on changes in fair value of biological assets | $9,112 | $9,400 | $13,849 | $18,790 | $12,765 | $12,823 | $18,184 | $29,236 | $73,008 |
| Gross margin(1) | $6,700 | $9,600 | $14,008 | $17,216 | $13,814 | $18,418 | $26,146 | $31,838 | $90,216 |
| Gross margin %(1) | 18% | 26% | 34% | 39% | 32% | 28% | 37% | 40% | 35% |
Note (1): Gross margin reflects the IFRS measure per the Company’s Financial Statements.
Both adjusted gross margin and gross margin before fair value adjustments have generally improved throughout Fiscal 2024. This improvement is attributed to several factors, including lower cultivation and post-harvest costs, reduced inventory provisions, lower depreciation resulting from impairment charges recorded in fiscal year 2023 and higher recreational cannabis revenue. In Q1 Fiscal 2025, gross margin declined primarily due to lower unrealized gain on changes in fair value of biological assets and lower international sales. In Q2 Fiscal 2025, gross margin declined primarily due to the fair value adjustment on inventories acquired through the Motif acquisition and subsequently sold, as required under IFRS. In Q3 Fiscal 2025, gross margin has
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 20249 increased primarily due to higher international sales and higher unrealized gain on changes in fair value of biological assets. In Q4 Fiscal 2025, the gross margin increase wasdriven by a higher proportion of international sales with stronger margins, lower cost of sales per unit achieved through greater scale and operating efficiencies (including but not limited to an improvement in yields), and higher unrealized gain on changes in fair value of biological assets, partially offset by lower margins on domestic white label and B2B sales.
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