VANCOUVER, British Columbia—Kits Eyecare Ltd. (TSX: KITS), a leading vertically integrated eyecare provider, yesterday announced its financial results for the second quarter ended June 30, 2026. Revenue for the period increased by 17.8 percent versus Q2 2025 to reach $58.4 million (CAD), the company said, led by glasses revenue that grew 54.0 percent and now represents nearly one-fifth of the business. The company said it generated $7.8 million in cash flow from operations, equal to 13.3 percent of revenue, and ended the quarter with $27.4 million in cash and no debt.
For the six months ended June 30, 2026, revenue increased 20.5 percent, or 22.2 percent in constant currency, to $115.9 million from $96.2 million versus the same period last year. Glasses revenue reached $21.9 million, representing a 57.2 percent year-over-year increase, the company said. Net income was $3.4 million compared with net income of $0.9 million year-over-year.
“We believe the value of our business lies in the strength of the Kits brand and the loyalty it earns, and this quarter, that loyalty showed up in the numbers,” said Roger Hardy, co-founder and CEO of Kits. “Repeat revenue grew 27.4 percent to 65.5 percent of revenue, average order value reached a record $213, glasses grew 54 percent at expanding margins, and the business generated a record $7.8 million in operating cash flow for the quarter. Very few companies grow at this rate; even fewer do it while generating cash. We are one of them. The business is now paying for its own acceleration, and we are still early.”
The recurring foundation of the business reached new highs in the second quarter, the company noted. Repeat customers contributed 65.5 percent of revenue, up from 60.6 percent in the prior-year period, with repeat revenue growing 27.4 percent year-over-year to $38.3 million. The company’s two-year active customer base grew 15.2 percent to a record 1,142,000, and its Autoship subscription program is now a $24.6 million annualized annuity with what the company said was minimal maintenance cost.
Glasses led the company’s growth, with revenue of $11.1 million on approximately 148,300 units delivered, up 32.4 percent, the company said. Premium lens upgrades represented 45.2 percent of glasses revenue, 78,500 units were delivered to repeat customers (up 51.0 percent), and new glasses customers in the quarter generated first-order revenue 50 percent higher than the comparable prior-year cohort on identical entry pricing, aided by OpticianAI, the company’s AI-powered fitting engine. Glasses customers acquired in 2026 are generating per-customer first-order revenue that exceeds the multi-year cumulative revenue of cohorts acquired in earlier years, the company noted.
“Customers are taking more pairs, they’re upgrading their lenses, they’re buying into categories we’ve added like progressive readers and anti-fatigue lenses,” Hardy stated on a conference call. “And they’re finding all of it faster because of tools like OpticianAI.”
“Coming into 2026 we made a deliberate decision to build out our glasses business, and the results, 54 percent growth, with the strongest new-customer cohorts in our history validates that focus,” added Tai Silvey, president of Kits. “In the back half we intend to rebalance, sustaining the momentum in glasses while ensuring our contact lens acquisition engine remains robust.
“Customers are choosing Kits for all of their vision needs because of the uniqueness of our vertically integrated model—quality, value, and speed in a combination we don’t believe anyone else in the category can match,” he added. “Our mission is to make eyecare easy, and more than 1.1 million active customers are telling us it’s working.”
During the second quarter, the gross margin expanded by 160 basis points to 37.9 percent, driven fully by organic factors such as a growing mix of glasses revenue, increased adoption of premium lens upgrades, and disciplined management of pricing and promotions, the company advised. The period also highlighted a significant shift in capital discipline, as the company noted it retired all remaining legacy debt obligations, completed the sale of its Bitcoin exchange-traded fund treasury position, and began returning capital to shareholders by repurchasing and cancelling 89,200 common shares for $1.0 million under its normal course issuer bid (NCIB).
For the third quarter of 2026, Kits management said it expects revenue to be in the range of $62.0 million to $64.0 million, with adjusted EBITDA as a percentage of revenue between 4.0 percent and 6.0 percent.
In June, the company announced that the Toronto Stock Exchange accepted its notice of intention to make an NCIB to purchase a portion of its common shares. In making the announcement, the company advised that share purchases would provide the company with a capital allocation alternative with a view to long-term shareholder value.
