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This call is being recorded, like I mentioned, so for anyone just joining or if you do have to hop off, or maybe you're on your commute to work, not to worry, we'll send the replay, and it'll be made available to our investor relations website as well after the call. I'll now turn it over to our CEO, Mr. Shane Madden, of Hydreight Technologies. We'll just give it probably one minute to let everyone else in. I see some people in the wait room. Shane, you can take it away for you as well.
Thank you. Okay, I'm just gonna get started, Abbey. Thank you and good morning, everyone. Appreciate you joining us. I want to use the first part of this call to review what we achieved in 2025, why we were able to achieve it, what it means for where this company is going. The financial results were strong, and I'll get to those in detail, but I think more important story is the structural shift that occurred in the business this past year and why we're so excited about 2026 and beyond. For those new to the story, let me ground you in what we've built. Hydreight is a healthcare infrastructure company. We provide complete back-end solution that allows businesses to operate regulatory compliant direct-to-consumer digital health brands across all 50 U.S. states.
That sounds simple, but it isn't. Healthcare is the most heavily regulated industry in the U.S., and that regulation differs state by state. Setting up a compliant telehealth operation from scratch with a physician network, a lab testing network, a licensed pharmacy network, electronic medical record keeping, prescription workflows, and the compliance framework to operate within corporate practice of medicine guidelines, both legally and cohesively across all 50 states takes years and tens of millions of CAD. The good news is we've already built that, and we license it to others. A business that comes onto our platform can be operationally, can be operational across multiple states in a fraction of the time and at a fraction of the cost of building it themselves.
That is the core value proposition that we provide our customers, and it is proving to be compelling. Coming into 2025, we had three clear priorities. First and foremost, prove that our VSDHOne platform could generate meaningful, repeatable revenue at scale. We launched it midyear, the results exceeded our expectations. Secondly, demonstrate operating leverage. We wanted to show that as the revenue grew, the platform economics would hold and drive profitability. We believe we've done that. Thirdly, put the balance sheet in a position of strength. We came into 2025 with just over CAD 1 million in cash. That's not a position from which we felt we could be aggressive. We needed to fix that, we did. Delving a little bit deeper into each of these.
Firstly, our VSDHOne platform, after a few quarters of client onboarding, VSDHOne went live partway through 2025 and immediately began generating activity. When a business signs a license and goes through our onboarding process, it gains access to our infrastructure, our physician network, pharmacy fulfillment, compliance framework, patient intake, and all the other components that go with operating a fully functional telehealth brand.
The products flowing through the platform include GLP-1 medications, peptides, hormone replacement therapy, hair loss treatments, skin care, and sexual health meds, everything that falls into the patient-specific self-administered category, for longevity medicine. These are high-demand recurring prescription categories. A patient who starts on, for example, a TRT or a GLP-1 program doesn't stop after one prescription. It can be anywhere from 18 months to lifetime in the case of TRT, reorders are monthly and scalable.
That recurring nature is central to the economics of our licensees, and it flows directly through our platform revenue. From a standing start last year, today we currently have over 12,000 licenses signed across VSDHOne. To be clear about what that number means and what it doesn't mean, signing a license is just the start of the relationship. It's not the peak. A licensee that signed in Q3 is still ramping up. A licensee that signed in Q4, for example, is still in the early stages of onboarding. The revenue generated in 2025 from VSDHOne represents a fraction of what those licensees, licenses will eventually produce.
That embedded ramp in the existing license base is, in my view, one of the single most important things to understand about Hydreight as we move into 2026. Next, I'd like to discuss the operating leverage we're seeing in the business and how it's already driving profitability even at the same scale we're currently at, even at the small scale we're currently at. In the second half of 2025, post-launch of VSDHOne, our revenue grew 157% versus the first half. During that same time, our OpEx increased by only 18%. To put it another way, in the second half of 2025, we grew revenue by over CAD 16 million and our OpEx only increased by CAD 600,000. This is the platform model working exactly as it's supposed to. The economics here are straightforward.
With our infrastructure built, adding a new partner adds transaction volume, not head count. We don't rebuild the compliance framework for each new licensee. We don't hire a new physician network. All those operating costs are sunk in at a scale to help us scale across an even larger revenue base. This operating leverage ultimately flows down into our EBITDA and EBITDA margins, which have more than tripled since we launched the platform. We ended the year with a Q4 adjusted EBITDA margin of approximately 11%, a substantial increase from two quarters prior when it was only 3.4%.
What we find so promising is that we achieved an 11% adjusted EBITDA margin so early in our scale-up, which means the operating leverage story is still in its early chapters, and it should only improve as we continue to scale going forward. Next, we wanted to touch on our balance sheet and how we've transformed it.
We entered 2025, as we said, with CAD 1.2 million in cash and a working capital deficiency. In contrast, we ended the year with CAD 16 million in cash and CAD 16 million working capital surplus. That is a fundamental change in the financial position of this company. We accomplished that through a combination of operating cash generation and disciplined financing, including a convertible debenture that allowed us to invest in the platform and build our cash reserves without excessive dilution.
In January 2026, we closed an oversubscribed CAD 15 million bought deal financing which brought our total cash position to over CAD 30 million. That financing was notable not just for the size, but for what it signaled: conviction from institutional investors in where Hydreight is going. Before we talk about the financials, I wanted to discuss what we see as we look ahead to 2026, and I want to be direct about this because many investors have been asking this question. In 2025, we were building and proving. We were launching VSDHOne, onboarding initial partners, getting our internal processes in place, building our pharmacy fulfillment, and overall establishing the model. That's a very different phase of the business than where we are now.
In 2026, we are operating a scaled, proven infrastructure with over 12 licensees, licenses signed, a national pharmacy network, a growing physician network, and a heavily capitalized business to accelerate the growth. The playbook is written, the infrastructure is built. We are now in the phase of scaling it. The biggest driver of our 2026 revenue will not be new licenses. We continue to keep our foot down and bring new customers into the platform, of course, it will be ramp-up of those partners who are already on the platform will be the primary focus. Those partners build their patient bases, increase their prescription volumes, and expand their product utilization, the revenue per partner grows. This is a compounding dynamic. We are in the early stages of it.
We're also expanding into new product categories, Peptides and longevity-focused treatments in particular, that represent the next wave of consumer demand in patient-directed health. More accurately, we're uniquely positioned from a healthcare infrastructure perspective to be able to leverage the company and provide an ecosystem that had not previously existed. Once these licensees are on our system, we can offer those treatments to all of our existing customers, effectively providing new categories and revenue opportunities to them and their existing customer bases, which we then benefit from. This also materially increases our customers' reliance on us and their retention on our platform. One thing to note is the longevity medicine industry did not exist five years ago.
The expansion into peptides is the biggest thing in the healthcare industry for a long, long time. Peptides are growing 2x as fast as the overall pharmacy market. 14, as I mentioned on previous communications, 14 of the previously restricted 19 peptides were released on February 27th of this year by Robert Kennedy Jr., showcasing the movement towards the expansion into this area from a government perspective, from an oversight perspective. With over 100 other peptides in clinical trials, this just showcases where this industry is going. When you consider the growth from just one treatment or one peptide, i.e., the GLP-1s in these last few years, you can see where the market's gonna go when there's 100 plus on there.
Also one thing to note from our ecosystem is that the GLP-1 represents one particular type of customer. These other expansion into the peptides is going to be for general longevity medicine and all manner of patient-specific needs. Again, the market that has already expanded is going to expand by 100x, and this is where everything is going. When I step back and look at where we are today versus one year ago, the platform scale, the balance sheet, licensee growth, and the team we've built, I feel very good about what's ahead. But let's let the numbers speak to that.
Starting from the top, for Q4 2025, total revenue was CAD 14.9 million, compared to CAD 4 million in Q4 2024, representing a growth of 270% year-over-year. For the full year, revenue was CAD 35.4 million versus CAD 16 million in 2024, representing 121% growth year-over-year. Our revenue comes from three streams, business partner contract revenue, commission revenue, and pharmacy sales. The largest driver of the growth in 2025 was pharmacy sales, which grew rapidly as VSDHOne became active and began processing prescriptions orders through our network. Turning to gross profit, for Q4, our gross profit was CAD 3.2 million, equal to a gross margin of approximately 22%. For the full year, gross profit was CAD 9 million, equal to a gross margin of 25%.
As we expected, our gross margin fell year-over-year, driven by the shift in our revenue mix. Pharmacy sales, which carry a lower margin, grew significantly faster than other revenue streams as VSDHOne drove major increases in prescription volumes. The effect of this was an overall lowering of our blended gross margin. In terms of total operating expenses, we are pleased at how we have continued to keep these costs relatively flat despite the high growth we were able to achieve. For the full year of 2025, operating expenses were CAD 7.6 million, compared to CAD 6.1 million in 2024, representing an increase of approximately CAD 1.5 million. In contrast, however, we realized an additional CAD 19.3 million of sales growth. That ratio is the operating leverage I mentioned earlier.
Putting it another way, in Q2 2025, our OpEx as a percentage of revenue was approximately 36%. Of the Q4, it fell to just 15%. We look to adjusted EBITDA, we're happy to report that not only do we achieve positive adjusted EBITDA in every quarter in 2025, but also that every quarter was more profitable than the last. We ended the year with Q4 adjusted EBITDA of CAD 1.6 million, compared to a - CAD 83,000 in the year prior. For the full year, adjusted EBITDA was CAD 2.5 million versus CAD 136,000 in 2024. Along with that growth was an expansion of our adjusted EBITDA margins.
We started the year with a 3.6 adjusted EBITDA margin in Q1 and just ended the year with 11% margin in the final quarter. Given the operating leverage we're seeing in the business, we expect profitability to continue to accelerate as we scale. Now that we've discussed the business and our 2025 results, I want to address our outlook for on 2026. To start, I want to reaffirm Q1 2026 revenue guidance. The activity on the platform has remained strong through the quarter, and we are tracking in line with our expectations. In terms of the full fiscal 2026 year, we continue to guide to a minimum of CAD 150 million in revenue.
We know that that appears to be an ambitious number, but we're highly confident we can achieve it based on everything we know about the business today and what our pipeline for the remainder of the year looks. The drivers behind the guidance are not speculative as we've covered previous. They are the ramp we are seeing in our existing 12,000 + licensed partner base, the continued onboarding of new partners, and the increased per-partner revenue as patient volumes and prescription utilization grow. We're not in a position where we need to discover new customers or build new products or build an infrastructure from scratch. The foundation is already in place. It is a matter of execution, and execution is what we've shown we can do in 2025 and previous years.
In closing, I'd like to thank everyone who joined today. We enter 2026 well-capitalized with a proven platform, a large and still ramping partner base, and a clear line of sight, continued growth, and profitability. We look forward to updating you on our Q1 results very shortly. I'd like to say thank you for all for joining.
Thank you so much, Shane. Thank you everyone for joining today's call. A replay will be available to everybody on Hydreight's website in the investor relations section of hydreight.com. We will also be sending an email to everyone with the recording as well. Thank you very much for joining us today, and we wish you guys a great rest of your day and weekend as well. Thank you so much. Bye now.