What you need to know: • Rubicon reported Q3 financial results that beat our estimates. Revenue came in at $15.6M (+16% YoY) compared to our estimate of $15.1M and adjusted EBITDA came in at $1.7M (11% margin) compared to our estimate of $1.0M. • ROMJ also announced that Glen Ibbott has been appointed as CFO, its newly acquired Cascadia facility has received its Health Canada license, and that it has entered into a new credit agreement for $4.0M. • We recently initiated coverage on Rubicon Organics, see here. Yesterday, after market close, Rubicon Organics Inc. (ROMJ:TSXV, ROMJF:OTCQX) reported its Q3 financials that beat our estimates. We remind readers that we recently initiated coverage on ROMJ (read here), and today’s price makes for a compelling entry point as the Company executes and the investor sentiment for cannabis stocks remains near all-time lows. We are maintaining our BUY rating and $1.00/share target price on Rubicon Organics. Financial Highlights • Revenue for the quarter was $15.6M, an increase of 16% YoY and 8% QoQ, compared to our estimate of $15.1M. Product sales came in at $19.9M, representing 12% YoY growth. • This was achieved through new genetic launches and product innovation, resulting in 6.2% national market share in premium flower and pre-rolls, 13.2% in premium vapes, 16.0% in premium edibles, and having the #1 topical SKU. See Figure 2 for YoY market share changes. • Gross margin (before fair value adjustments) came in at 34%, consistent with our 35% forecast and above the 32% reported in Q3/24. • Adjusted EBITDA came in at $1.7M, versus our estimate of $1.0M and the $2.0M reported last year, representing an 11% margin (vs. 6% expected). This value comes after adding back $252K in Cascadia startup costs. Management attributes the strong margins to operational scale, disciplined cost control, and focus on quality premium products. • Production costs represented 17% of revenue, an all-time low, and salaries and wages represented 15% of revenue, the lowest since Q3/23. • Net income totalled $2.8M vs. our estimate of $0.8M, which was largely due to a $2.8M fair value adjustment. OCF came in at $0.5M in the quarter, or $1.5M before working capital changes. • Rubicon ended the quarter with $6.7M in cash and $9.3M in debt, prior to entering a new credit agreement earlier this week.