What you need to know: • DWS reported solid Q3/26 financial results, including revenue of $8.2M (+28% YoY) vs. our estimate of $7.1M and adjusted EBITDA of $0.7M, in line with our expectations. • This represented Diamond’s third consecutive quarter of positive YoY revenue growth as well as YoY gross margin expansion. • Management provided a bullish outlook for the year ahead, with the 2025 harvest being one of the largest in company history. • We continue to believe DWS is undervalued given its apparent turnaround. Diamond Estates Wines and Spirits (DWS:TSXV, DWWEF:OTC) reported Q3/26 financial results yesterday evening that came in mostly ahead of expectations. This represented DWS’s third consecutive quarter of positive revenue growth and gross margin expansion. Management provided a strong forward outlook, giving us further confidence in our thesis in DWS. We are maintaining our BUY Rating and target price of $0.30/share on Diamond Estates. Q3/26 Financial Highlights • Revenue came in at $8.2M (+28% YoY), nicely beating our estimate of $7.1M, and $6.4M in Q3/25. The winery division saw sales increase $1.9M, driven by growth in grocery, convenience, and big-box channels (core to our thesis) as well as enhancements to the VQA Support Program. The agency division saw revenue decline by $0.1M. Nine-month revenue was $25.0M, up 23% YoY. • Gross margin was 57% vs. our estimate of 55%, and 54% in Q3/25. This demonstrates the strong economies of scale that DWS is realizing; we remind readers that gross margin was just 32% in FY23. Management highlighted that Q3 did not include any wine sector support program rebates, while Q3/25 included $0.6M in rebates, meaning that the true comparable gross margin has improved even further YoY. We will note that our gross margin corresponds to the financial statements rather than the numbers in the press release. • G&A increased $1.2M YoY (14% of sales vs. 13% in Q3/25), due to VQS support payments to Generations related to the DPTB licensing agreement. • Adjusted EBITDA was $0.7M (8% margin), which was in line with our forecast of $0.7M and slightly above the $0.6M reported in Q3/25. • Net income was ($0.1M), in line with our estimate of ($0.1M). OCF (before WC changes) was $0.3M for the quarter and $2.3M for the nine months. • DWS ended Q3 with $25.2M in current assets (including $4.4M in assets held for sale) compared to current liabilities of $23.3M and debt of $17.7M.