CV Sciences (OTCMKTS:CVSI) used its fiscal 2025 year-end and fourth-quarter earnings call to highlight margin expansion, cost reductions, and progress toward profitability amid what management described as a challenging market and regulatory environment for the CBD industry.
Chief Executive Officer Joseph Dowling said the company’s priorities remain scaling the business, driving continuous cost efficiency, and achieving profitability and positive cash flow. He added that the company is advancing a transition toward a broader global health and wellness platform, including expansion beyond cannabinoid-based products.
Full-year results show lower revenue but improved margins and expenses
Despite the revenue decline, the company posted significant gross margin improvement. Gross margin rose to 49% in 2025 from 45.6% in 2024. Grasser said the improvement was driven primarily by lower product and shipping costs, along with continued progress insourcing manufacturing for certain softgel and tincture products.
Operating expenses also declined. Dowling said operating expenses fell 17.2% to $7.7 million from $9.4 million the prior year. Grasser added that full-year SG&A decreased to $7.6 million from $9.2 million, citing lower legal and professional fees, reduced marketing spend, and administrative efficiencies. He characterized the reductions as structural and tied to a more scalable operating model.
Adjusted EBITDA loss narrowed to $0.3 million for 2025 from $0.8 million in 2024, according to Dowling.
Fourth-quarter performance: positive adjusted EBITDA and margin expansion
In the fourth quarter, revenue was $3.3 million versus $3.9 million in the year-ago quarter and was consistent with the third quarter of 2025, Grasser said. He noted that while unit sales declined year over year, management was encouraged by newer product performance and execution of its go-to-market strategy.
Fourth-quarter gross margin increased to 50.5%, compared with 43.2% in the fourth quarter of 2024 and 48.5% in the third quarter of 2025, reflecting what Grasser described as structural improvements in the supply chain and cost base. He said the company expects additional benefits as it increases the number of products insourced during 2026.
SG&A expense in the fourth quarter was $1.7 million, down from $2.3 million a year earlier, which Grasser said represented a decrease of nearly 25%.
Profitability metrics also improved. Grasser reported an operating loss of $0.1 million for the quarter, compared with an operating loss of $0.6 million a year ago. Adjusted EBITDA was positive $0.1 million in the fourth quarter, compared with an adjusted EBITDA loss of $0.4 million in the prior-year period. On a GAAP basis, net loss was $0.2 million, compared with $0.7 million a year earlier.
Strategy focus: innovation, cost efficiency, and M&A
Dowling said the company’s growth plan centers on three strategic areas:
- Product innovation, including expanding beyond cannabinoid-based offerings
- Cost efficiency, including supply chain and manufacturing improvements
- Strategic M&A to add scale, efficiency, and diversification
On product development, Dowling said CV Sciences launched a new +PlusHLTH branded line of cannabinoid-free supplements, with initial products including Clarity (cognitive support), Peace (occasional stress), and ReShape (metabolic health). He said early feedback from consumers and retailers has been encouraging.
He also said the company launched +PlusHLTH Empowr in the first quarter of 2026, describing it as a functional nutrition product that combines 20 grams of protein, 5 grams of creatine, and active probiotics, positioned for strength, recovery, mental clarity, and gut health. Dowling added that the company plans to launch multiple non-cannabinoid products throughout 2026 to drive organic growth and help offset revenue pressure tied to regulatory challenges.
Dowling also discussed the company’s European subsidiary, Cultured Foods, describing it as a key component of the innovation strategy that provides in-region production capabilities for European and global markets. He said Cultured Foods is expected to play an increasing role in new product launches in 2026.
In the pet category, Dowling said the +PlusCBD Pet line continues to build momentum, and he highlighted Hip and Joint Health and Calming Care Chews as strong performers. He also said the company is expanding its relationship with Chewy to strengthen its presence in the online pet category.
On cost efficiency, Dowling said the company reduced shipping costs through improved logistics and fulfillment efficiency. He pointed to the acquisition of Elevated Softgels as a key driver of future margin expansion by bringing certain manufacturing capabilities in-house to reduce costs and improve speed to market, alongside selective outsourcing through Cultured Foods.
On M&A, Dowling said acquisitions of Cultured Foods and Elevated Softgels over the past two years are contributing to scale, efficiency, and diversification, and that the company continues to evaluate additional opportunities with its advisors.
Liquidity, cash flow trends, and balance sheet update
Grasser said the company ended the fourth quarter with $0.3 million of cash, compared with $0.5 million at the end of 2024. He noted that in 2025 the company entered into a financing agreement with an institutional investor that was later modified in March 2026 to include a conversion feature, which he said strengthened the balance sheet and improved financial flexibility.
On cash flow, Grasser said CV Sciences used $0.3 million of cash from operations in the fourth quarter, consistent with both the prior-year quarter and the third quarter. For the full year, operating cash usage improved to $0.4 million, down from $0.9 million in 2024. He said management is focusing on accounts receivable collections, inventory management, and vendor payables, while aligning the cost structure to current revenue levels.
Inventory at year-end was $4.1 million, down from $4.9 million a year earlier. Grasser said that after integrating Cultured Foods and Elevated Softgels, the company expects to begin realizing meaningful synergies from the acquisitions in the second half of 2026. He added that while the company anticipates modest cash usage near term, it expects continued improvement and is working toward generating positive cash flow in the second half of 2026.
Regulatory developments and potential catalysts
Management spent a portion of the call discussing regulation. Dowling said the regulatory environment remains complex, with a lack of consistent federal guidance creating challenges including increased costs and uneven state rules. He said the November 2025 Appropriations Act could have mixed implications and potentially serve as a catalyst for regulatory clarity, while also requiring a pivot away from certain products if unchanged.
Dowling highlighted a development he described as positive: an executive order signed on December 18, 2025, titled “Increasing Medical Marijuana and Cannabidiol Research”. He said it directed the Attorney General to take steps to complete rulemaking to reschedule marijuana from Schedule I to Schedule III as expeditiously as permitted by federal law. Dowling also said the order directed the administration to work with Congress to update the statutory definition of final hemp-derived cannabinoid products to allow continued access to appropriate full-spectrum CBD products while restricting products that pose serious health risks, and directed multiple federal health agencies to develop research methods and models using real-world evidence.
Dowling also said CMS Administrator Dr. Mehmet Oz announced that the Center for Medicare and Medicaid Innovation was planning a model that would allow Medicare beneficiaries to receive hemp-derived CBD products at no charge if recommended by their physicians, with coverage of up to $500 annually in hemp-derived products, potentially beginning as early as April 2026. Dowling said the company is pursuing the opportunity aggressively as additional program details become public.
The call concluded without analyst questions. Dowling reiterated that the company has streamlined operations, improved efficiency, and intends to remain flexible as it pivots into areas such as in-house manufacturing and non-cannabinoid products, while remaining an active participant in industry consolidation when it creates strategic value.
About CV Sciences (OTCMKTS:CVSI)
CV Sciences, Inc is a developer, manufacturer and marketer of hemp-derived products, with a focus on cannabidiol (CBD) formulations for both consumer and industrial applications. The company’s consumer segment offers a range of dietary supplements, topical creams, personal care items and pet products under its flagship PlusCBD™ Oil brand, while its industrial segment provides hemp-derived ingredients for use in wellness, pharmaceutical and cosmetic formulations.
Headquartered in San Diego, California, CV Sciences operates a manufacturing facility in El Cajon that oversees cultivation partnerships, extraction, refinement and product formulation.
