Elixinol’s Q4 Surge: Revenue Up, Costs Down, Cash Flow Turns Positive

Revenue Growth and Strategic Acquisitions

Elixinol Wellness Ltd (ASX – EXL) closed out FY25 with a strong December quarter, reporting a 9.5% increase in revenue to $4.1 million compared to the previous quarter. The full year revenue rose 3.6% to $15.5 million, a performance largely supported by the acquisition of Healthy Chef, which has diversified Elixinol’s revenue streams, particularly through e-commerce channels.

The Healthy Chef brand saw a 42% jump in e-commerce sales during Q4 FY25 compared to the same period last year, reflecting successful product innovation and targeted digital marketing efforts. This growth in higher-margin online sales complements Elixinol’s traditional retail presence and supports its strategic pivot towards premium, functional nutrition products.

Cost Reduction and Margin Expansion

Alongside revenue gains, Elixinol has aggressively cut its operating costs by approximately 30% year-on-year in Q4, a structural reduction that has materially lowered its ongoing expense run-rate. This disciplined cost control, combined with a deliberate shift to higher-margin products and channels, has driven a 100 basis point improvement in gross margin compared to the prior year quarter.

These efforts culminated in Elixinol achieving its first underlying operating cash flow positive quarter, a significant milestone that signals improved operational efficiency and a clearer path to profitability. The company’s cloud upgrade to its financial reporting system also supports enhanced cost management and transparency.

Market Position and Contract Expansion

Elixinol has reasserted its dominant position as a trusted hemp supplier to Australian retailers, expanding its contracted supply volumes and deepening relationships with major grocery chains, including Costco. Hemp Foods Australia delivered a record sales quarter, while Australian Primary Hemp secured extended supply agreements, reinforcing Elixinol’s leadership in the domestic hemp ingredients market.

The company is also refining its Mt Elephant brand strategy, focusing on innovation and sustainability to improve competitiveness in mainstream grocery. Although distribution will narrow to a single major retail partner, this concentrated approach aims to enhance in-store execution and marketing effectiveness.

Outlook and Capital Position

Despite a seasonally weaker Q1 FY26 expected, Elixinol’s management remains optimistic about scaling the business profitably. The company completed a $2.5 million capital raise during the year and reduced contingent liabilities by renegotiating earn-out obligations related to the Healthy Chef acquisition, strengthening liquidity.

With a cash balance of $1.4 million at the end of December and access to various financing facilities secured against future e-commerce receipts, Elixinol is well-positioned to fund its growth initiatives and pursue both organic and inorganic expansion opportunities.