Good morning, everyone, and welcome to the TelyRx Third Quarter 2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If anyone has any difficulty hearing the conference, you may press star then zero for operator assistance at any time. Listeners are reminded that portions of today's discussion may contain forward-looking statements that reflect the company's current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.
For more information on TelyRx's risks and uncertainties related to these forward-looking statements, please refer to the company's filing statement dated November 5th, 2026, which is posted on SEDAR+. In addition, in today's discussion, we will refer to non-IFRS financial measures such as adjusted EBITDA that do not have any standardized meaning prescribed by IFRS. Management believes non-IFRS results are useful to enhance the understanding of the company's ongoing performance, but these are supplemental to and should not be considered in isolation from or as a substitute for IFRS financial measures. These non-IFRS measures are defined in our earnings press release and available in our MD&A, which also includes a reconciliation of these measures to their respective most directly comparable IFRS financial measures. The company's press release, MD&A, and financial statements are available on its website and on SEDAR+.
All figures presented on today's call are in U.S. dollars unless otherwise stated. This morning's call is being recorded on 6th of November 2026 at 8:30 A.M. Eastern Time. I would now like to turn the call over to Vanessa Slowey, President and Chief Executive Officer of TelyRx. Please go ahead, Ms. Slowey.
Thank you, and good morning, everyone. Welcome to our third quarter 2026 earnings call. With me this morning is our Chief Financial Officer, John Cascio. TelyRx was built to make essential medication simple to get. No appointments, no waiting rooms, and no unnecessary friction between a patient and the prescription they already know they need. That mission hasn't changed, and the way our customers are using the platform tells us it continues to resonate. Our model is straightforward. A patient goes online, selects from our formulary of more than 500 FDA-approved medications, and an independent licensed provider in their state reviews the request. If approved, one of our licensed pharmacies fills the prescription and ships it directly to their door. No insurance and no travel, just the cost of the medication and a flat $22 visit fee. The cash-pay prescription market remains large.
It's under-penetrated and growing, and we are still early in our journey. As we scale, we continue to learn how best to grow this business efficiently and sustainably. This quarter was a good example of that. TelyRx generated $23.1 million of revenue during the third quarter. That's up 88% over the prior year quarter, and we achieved that while spending less on marketing. At the same time, we narrowed our adjusted EBITDA loss to $1.3 million from $3.2 million last quarter. Revenue in the third quarter remained largely consistent with the second quarter as we continued to refine our approach to balancing revenue growth with an operating efficiency. As our business continued to scale, we're placing increased emphasis on optimizing marketing investments, improving customer acquisition economics, and driving operational efficiencies.
These initiatives reflect our commitment to building a more profitable and sustainable business with a clear focus on accelerating our path towards positive adjusted EBITDA while maintaining a strong foundation for future growth. Demonstrating profitability matters in a business model like ours, and that requires discipline in how we acquire customers. We're not pursuing customer growth at all costs. With that in mind, we took a hard look at how we deploy our marketing budget and recalibrated our approach. During the quarter, we invested resources into learning and training our models to improve marketing efficiency across the major digital advertising platforms. While we started to see green shoots in Q3, we will continue to look for positive signs in Q4. We're already seeing that in the data. More traffic is reaching our product page. We're attracting more qualified visitors, and more of them are becoming customers.
As we said before, the relationship between marketing spend and revenue growth is not fixed. It evolves as the business evolves, and we're still a young company early in our growth phase. Each stage teaches us something new. The culmination of those learnings is like an asset that extends our lead on potential competitors in the future. What matters is that we see a shift quickly and respond to it quickly, and this quarter showed we can do exactly that. It was another step in refining the engine that drives our growth. What encouraged me most is what happened beneath the headline number, because revenue from our recurring customers grew to $17.4 million. That's up 120% from $7.9 million in the third quarter of 2025, and now makes up 75% of total revenue, and that's up from 64% in the same period last year.
This is higher quality, longer tail revenue. Bringing an existing customer back costs a fraction of what it takes to acquire a new one. As this mix builds, so does durability of our revenue base. We served approximately 125,000 recurring customers during Q3 2026. That's up 127% from 55,000 in the third quarter of 2025. Refills also grew to 29% of recurring revenue from 27% last year. That's another sign that customers are making TelyRx part of how they manage their ongoing health. This quarter, we also saw a greater percentage of chronic medications purchased in the quarter compared to purchase for one-time acute needs. This is also higher quality revenue, since chronic prescriptions tend to be refilled month after month, year after year, which means longer customer relationships and more predictable revenue over time.
We continue to bring new customers onto the platform, welcoming more than 55,000 new customers and generating $5.7 million in new customer revenue in the quarter. Blended average order value rose to $113 from $109 in the third quarter of 2025. Our refreshed brand and new website, which launched early in the quarter, are now in place and give customers a simpler, cleaner experience, and they are finding their way around the site much more easily. Fewer customers are leaving right after they arrive. That is down about a quarter, and twice as many people who start on the homepage are going on to make a purchase. We are also showing up better in search. Our domain authority, that is a measure of how well a website ranks in search results, has more than doubled since late last year. That is going from 16 to 37.
All of this has led to a 17% improvement in revenue per visitor, and we are continuing to fine-tune the site, so our plan is to keep improving those numbers. We also continue to invest in the customer experience. As part of our Clearwater expansion, we opened a dedicated customer care center, open seven days a week, which we believe sets us apart from our peers. Across TelyRx as a whole, customers are noticing the difference. Our Net Promoter Score has risen significantly to +76. With a score of 4.7 based on more than 4,200 reviews, TelyRx is the highest rated digital pharmacy in the U.S. on Trustpilot. A better customer experience makes people more likely to come back to us, and that supports the continued growth in our recurring customer base. We are also extending our reach.
On October 23rd, our Clearwater pharmacy was licensed to serve the state of Arkansas, which expands our platform to 49 states and territories. In Q4, we plan to launch the TelyRx mobile app, which will make it even easier for our customers to order, refill their prescriptions, and manage their accounts. This will provide our customers with another convenient way to access the medications they need, and is designed to facilitate more repeat use. I am very proud of the entire TelyRx team, those in our pharmacies who get our customers the medications they need, and the people that work hard every day to improve the customer's experience. It is the dedication and the hard work of the collective team that has enabled us to deliver these results. I will now turn the call over to John, who will discuss our third quarter financial results in more detail. John?
Thank you, Vanessa, and good morning, everyone. Revenue in the third quarter was $23.1 million compared to $12.3 million in the third quarter of 2025, an increase of $10.8 million or 88% growth. The year-over-year increase in revenue was driven by growth in overall sales volumes and continued contributions from recurring customers. Revenue consisted of revenue from recurring customers of $17.4 million in the quarter and revenue from new customers of $5.7 million. Recurring customer revenue growth grew 120% over the same period last year, and recurring customer revenue represented 75% of total revenue in the current period. Third quarter gross profit was $13.8 million compared to $6.9 million in the third quarter of 2025. Gross margin was 60% in the third quarter of this year compared to 56% in the same period a year ago.
The increase in gross margin was driven primarily by improved purchasing economics for prescription medications, lower credit card processing fees on a per order basis, and improved margins on shipping and handling. Marketing spend in the quarter was $8.5 million compared to $4.6 million in the third quarter of 2025. adjusted EBITDA in the quarter was a loss of $1.3 million compared to a loss of $351,000 in the third quarter of 2025. That is an improvement by more than half from the adjusted EBITDA loss of $3.2 million in the second quarter of 2026, driven primarily by lower marketing spend, coupled with an increase in recurring customer revenue. Net loss was $2.8 million for the three months ended September 30th, 2026, compared to a net loss of $1.1 million for the same period last year.
Cash used in operating activities during the third quarter was $2.3 million, compared to approximately $100,000 in the same period of last year. Free cash flow was - $3 million compared to - $500,000 in the third quarter of 2025. Turning to our key operating metrics, the blended average order value was $113, up from $109 in Q3 of 2025. blended customer acquisition costs was $149 in the quarter. We filled approximately 254,000 prescriptions in the quarter, compared to 150,000 in Q3 2025, an increase of 69%. Turning to our balance sheet. As of September 30th, 2026, we had cash and cash equivalents of $8.5 million and $18.7 million, including restricted cash. That leaves us in a strong financial position with the runway to execute on our plan. Marketing is our largest operating expense, and it can be adjusted in real time.
This quarter demonstrated that flexibility. We were able to reduce spend as we refined our digital marketing approach and maintain the ability to turn it back on as we see evidence of increased efficiencies. This materialized during the course of Q3 2026, as we reduced total marketing spend by $1.1 million while keeping revenue consistent from Q2 to Q3 of 2026. That flexibility is especially relevant as we move through the fourth quarter. Q4 is typically the most expensive time of the year to advertise, as retailers compete for attention through the holiday season. This year, heavy political advertising around the U.S. midterm elections has also added cost pressure. We will continue to closely evaluate the returns on our marketing investments and remain disciplined in our allocating resources towards opportunities that deliver the greatest long-term value.
Our approach is focused on optimizing customer acquisition economics, maximizing the effectiveness of our marketing investments, and maintaining the flexibility to capitalize on attractive growth opportunities. This disciplined approach supports our commitment to sustainable revenue growth while accelerating our path towards positive adjusted EBITDA. We have meaningful operating leverage across a number of areas, and the business can scale significantly with limited additional investment. CapEx is modest given the investment that we've already made to date and given the nature of the operating leverage within the business. Overall, our financial position remains strong, and we believe we are well-positioned to support continued growth while maintaining a conservative leverage profile. With that, I'll turn the call back over to Vanessa.
Thank you, John. This quarter says something important about how we run TelyRx. We spend with discipline, we measure what works, and we move quickly when the data tells us to. That is how we intend to keep building this company. Our foundation has not changed. Rigorous compliance, clinical integrity, a carefully selected formulary of more than 500 medications, and a nationwide network of licensed providers, a dedicated customer care team available seven days a week, and a seamless digital experience. Our provider network and pharmacy footprint are built for volume well beyond where we are today. As we have told the market, our marketing channels and allocations must be continually refined as the business and the model driving our revenue evolves. The changes we made this quarter are another step in that process, and they are designed to drive better performance at this stage of our growth.
Reaching positive adjusted EBITDA remains a near-term goal, and the progress we have made this quarter is a meaningful step in that direction. We will build that same discipline into the fourth quarter, a seasonally expensive period for advertising, and we will continue to favor profitable, sustainable growth rather than growth for its own sake. Everyone needs medication at some point, and TelyRx has made getting it remarkably simple. More of our customers are staying with us, and more of them are trusting us with their ongoing health needs. Cash-pay prescriptions remain one of the fastest-growing areas of U.S. healthcare, and we believe TelyRx is well-positioned to keep expanding access to affordable, high-quality care as we scale. Thank you for being part of this with us. With that, I would like to open the call to questions. Operator?
Ladies and gentlemen, we will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing the keys. If you wish to remove yourself from the question queue, you may press star and then two. Our first question comes from Tania Armstrong-Whitworth with Canaccord Genuity. Please go ahead.
Good morning, guys, and congrats on the nice EBITDA beat here. I guess to start, maybe could you give us a sense of what level of marketing spend you are planning for Q4, especially given the expensive holiday season, as well as into 2027, taking into consideration that $8.5 million or so of unrestricted cash?
Yes, that's a good question. We're continuing to take a disciplined approach to our marketing investments and balancing growth opportunities with cash preservation. We're going to remain focused on deploying capital where we see the strongest returns, while maintaining the flexibility to adjust spending based on the business performance and ultimately the market conditions. At this point, we're not providing specific marketing guidance at this time, Tania.
Okay, that's fair. Secondly, I believe you quoted the number of recurring customers in the period at 125,000. I'm not sure if I missed it, but could you give us the number of new unique customers in Q3 and what the acquisition cost of these customers was?
Yeah, the acquisition cost for Q3 was $149. I do not have the individual counts of the new versus recurring customers. For me, I believe it was in the press release, but I think it was around 55,000 actually, Tania, for the quarter.
Perfect. Third, just on the macro, since May, I believe TrumpRx has listed more than 600 generics with live cash prices, and these are pulled from Amazon Pharmacy, Cost Plus Drugs, GoodRx. These overlap with your formulary. Alongside this, the expiry of the enhanced ACA subsidies should have grown the uninsured cash pay population pool this year. I'm wondering, are you seeing more price shopping or pressure on order values, and how do your prices compare with Cost Plus on your, I guess, like your top five SKUs, let's say? Why isn't that larger uninsured pool showing up in your new customer growth yet? Or maybe it will next year.
Tania, great question. On price shopping, of course people are going to shop around, and they should. But people don't really come to us for the cheapest pill. TrumpRx, Cost Plus, GoodRx are useful if you already have a prescription in your hand, and a lot of our customers don't. We give them the consult, the prescriber, the pharmacy, and the delivery all in one place. TrumpRx doesn't write anyone a prescription. I don't think I should get into an SKU-by-SKU price fight with Cost Plus. I don't think that's a good idea. That's not the game we're in. Our game is service. Every order gets three human checks before it goes out. When you call a person, a person picks up, not a machine or a bot. That's why we're rated at 4.7 on Trustpilot.
We're, as I said earlier, the highest-rated digital pharmacy platform in the U.S. That's why we also believe our customers are coming back. On the uninsured part of your question, again, that's a fair question, but the newly insured are a few million people spread across the country. Many of them are the most price-sensitive and the least likely to go looking for care at all. We're not building the business on that wave. We're building it on customers who have a good experience and keep coming back.
Okay, that's very fair. I will leave it there. Thank you, guys.
Thanks, Tania.
Once again, if you have a question, please press star and then one. This concludes our question-and-answer session. I would like to turn the conference back over to Vanessa Slowey for any closing remarks.
Thank you, everyone, for participating in today's call and for your continued interest in TelyRx, and we look forward to reporting on our continued progress next quarter.
This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.