Peak Processing Achieves First Positive EBITDA Month and Raises Q4 Guidance

• First positive EBITDA month with A$159k in March
• Q3 production exceeds guidance by 10%, Q4 forecast raised to 1.5 million units
• Operational improvements sustain 99.95% on-time delivery
• Major contract expansions with St. Peter's and Electric Brands
• A$2.25m annualised cost savings and reduced liabilities

March Marks First Positive EBITDA Month

Peak Processing Limited (ASX:PKP) finally turned a corner in March 2026, delivering its first positive EBITDA month under a revamped operating model. The company posted an unaudited EBITDA of approximately A$159,000 on record monthly revenue of about A$1.2 million, supported by a 56% contribution margin, a sharp improvement from February's 32%. This milestone underscores the success of the cost optimisation program that has cut annualised expenses by A$2.25 million, with March recording the lowest monthly operating costs in FY26.

With production volumes scaling rapidly, the company exceeded its Q3 guidance by producing around 1 million beverage units, a 42% quarter-on-quarter increase, and has now raised its Q4 forecast to 1.5 million units, up from 1.4 million. This upgrade follows confirmed customer purchase orders and reflects growing market demand as the business moves beyond its operational reset phase.

Contract Expansions Drive Production Growth

Peak's manufacturing agreements have expanded significantly, notably a 250% increase in SKUs for St. Peter's Beverages, from 4 to 14, expected to add between 500,000 and 700,000 beverage units annually. Meanwhile, the Electric Brands deal for the Sweet Justice portfolio was extended with exclusivity provisions, locking in approximately 1.4 million annualised units across Canada and supporting US market entry. This extension builds on the company's longstanding relationship with Electric Brands and confirms demand durability for its leading cannabis beverage brand in British Columbia.

These contract wins are complemented by the addition of 30 new product listings across Canadian provinces, including the Ontario Cannabis Store (OCS), where Peak secured 10 new listings in the March 2026 call alone, the highest tally in a single product call to date. Proprietary brands also gained traction, with Just Seltzers Lite rapidly scaling to 229 distribution points in British Columbia within three weeks of launch and new multipack listings for SnapBack in Ontario.

Operational Excellence Sustained with Near-Perfect Delivery

Operationally, Peak has maintained an impressive 99.95% On-Time-In-Full (OTIF) delivery rate through Q3 FY26, a vast improvement from 53% in June 2025 when the reset began. This metric is crucial for provincial distributors in Canada and underpins the company's ability to secure new listings and expand existing contracts. Investments in automation and quality control, including vision inspection systems and automated fill-level verification, have contributed to enhanced throughput and reliability.

In parallel, the proprietary Envision Emulsions™ platform now powers 50% of all active SKUs, with cumulative production reaching around 3,000 kilograms. The commissioning of the Envision Emulsion Lab in Florida further consolidates Peak's US operations, enabling streamlined product development and manufacturing under one roof.

Balance Sheet Repair and Capital Raising Underway

Financially, Peak has made strides in repairing its balance sheet, notably reducing its Canada Revenue Agency liability from a peak of approximately A$1.8 million to about A$200,000. Working capital has been strategically deployed into core inventory to support the Q4 production ramp and mitigate supply chain risks, although this contributed to a net operating cash outflow of A$2.6 million in the quarter.

The company ended March with cash and equivalents of A$538,000 and total available funding of A$543,000. To bolster its working capital through the Q4 ramp and fund accretive capital expenditure, Peak is undertaking a convertible note capital raising, following a successful A$2.7 million placement completed in the quarter, which was supported by both new and existing investors including board members.

Looking Ahead to Q4 and Beyond

With the operational reset behind it, Peak enters Q4 FY26 with its strongest forward order book ever. The upgraded production guidance of 1.5 million beverage units, backed by expanded contracts and new product listings, sets the stage for materially higher revenue and the prospect of positive operating cash flow this quarter. Several advanced-stage manufacturing negotiations in both Canada and the US could further accelerate growth if concluded successfully.

While the company’s cash runway remains tight, the ongoing capital raising and improved operational metrics suggest a leaner, more efficient platform poised for scale. Investors will watch closely as Peak aims to convert its operational momentum into sustained financial performance, building on the foundation laid during the reset phase.

Peak’s journey from steep losses and restructuring in early 2026 to positive EBITDA and upgraded guidance demonstrates a significant turnaround, but the path ahead will require continued execution and market traction to maintain this trajectory.

These developments build on the company’s prior progress, including the expanded Sweet Justice manufacturing agreement reported earlier this year and the steady climb in beverage production volumes over recent quarters, highlighting a clear shift in Peak's operational and financial narrative.1.4M Beverage Units in Q4 and Expanded Deal with Electric Brands provide additional context to this growth phase.

Bottom Line?

Peak Processing’s operational reset has delivered tangible results, but the company’s ability to sustain growth hinges on converting production gains into consistent cash flow and successfully closing its ongoing capital raise.

Questions in the middle?

• Will Peak’s convertible note raising secure sufficient funding to support its Q4 ramp and US expansion?
• Can the company maintain near-perfect OTIF delivery as production volumes scale further?
• How quickly will new US commercial partnerships materialise into revenue streams?