Knight Therapeutics Reports Third Quarter 2025 Results

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[i] Financial results excluding the impacts of hyperinflation under IAS 29

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The Company applies IAS 29, Financial Reporting in Hyperinflation Economies, as the Company’s Argentine subsidiary used the Argentine Peso as their functional currency. IAS 29 requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy be adjusted based on an appropriate general price index to express the effects of inflation.

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Financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. The impact of hyperinflation under IAS 29 is calculated by applying an appropriate general price index to express the effects of inflation. After applying the effects of translation, the statement of income is converted using the closing foreign exchange rate of the month.

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The Company believes that financial results excluding the impact of hyperinflation under IAS 29 represents a useful measure to investors as they allow results to be viewed without those impacts, thereby facilitating the comparison of results period over period. The presentation of financial results excluding the impact of hyperinflation under IAS 29 is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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The following tables reconcile the financial results under IFRS to financial results excluding the impact of hyperinflation under IAS 29.

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Select financial results excluding the impact of hyperinflation under IAS 29¹

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^{1 _{Adjusted EBITDA, Adjusted EBITDA per share and financial results excluding the impact of IAS 29 are non-GAAP measures and do not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.}}

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Adjusted Revenues¹ by Therapeutic Area

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^{1
_{Excluding the impact of hyperinflation under IAS 29. Adjusted Revenues is a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.}}

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[ii] Financial results at constant currency

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Financial results at constant currency are obtained by translating the prior period revenues and financial results from the functional currencies to CAD using the conversion rates in effect during the current period. Furthermore, with respect to Argentina, the Company excludes the impact of hyperinflation and translates the revenues and results at the average exchange rate in effect for each of the periods.

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The Company believes that financial results at constant currency represents a useful measure to investors because it eliminates the effect that foreign currency exchange rate fluctuations may have on period-to-period comparability given the volatility in foreign currency exchange markets and therefore, provides greater transparency to the underlying performance of our consolidated financial results. The presentation of revenues and financial results under constant currency is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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The following tables are reconciliations of financial results under IFRS to financial results and financial results at constant currency.

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^{1 _{Refer to Subsection – [i] Financial results excluding the impact of hyperinflation under IAS 29 for additional details.}}

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Select financial results at Constant Currency¹

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^{1 _{EBITDA, Adjusted EBITDA, Adjusted EBITDA per share and financial results at constant currency are a non-GAAP measures and do not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.}}

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Adjusted Revenues at Constant Currency¹ by Therapeutic Area

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^{1
_{Adjusted Revenues at constant currency is a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.}}

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[iii] Adjusted Gross Margin
Adjusted Gross Margin is defined as revenues less cost of goods sold, adjusted for the impact of IAS 29 (accounting under hyperinflation) and the impact in cost of goods sold of the difference between the fair value of inventory acquired and the cost paid in the Paladin Transaction, accounted under IFRS 3 – Business Combinations, when the inventory acquired as part of the transaction is sold (“Step-Up Expense”).

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The Company believes that Adjusted Gross Margin represents a useful measure to investors as allow Gross Margin to be viewed without the impact of hyperinflation under IAS 29 and Step-Up Expense, thereby facilitating the comparison period over period. The presentation of Adjusted Gross Margin is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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^{1
_{Adjusted Gross Margin as a percentage of Adjusted Revenues.}}

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For the quarter ended September 30, 2025, Adjusted Gross Margin increased by $16,702 or 39%. The increase was mainly driven by the incremental revenues from the Paladin and Sumitomo Transactions in Canada, which contributed to a higher Adjusted Gross Margin.

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[iv] EBITDA

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EBITDA is defined as operating income or loss adjusted to exclude amortization and impairment of non-current assets, depreciation, but to include costs related to leases.

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The Company believes that EBITDA represents a useful measure to investors to assess profitability and measure the Company’s ability to generate liquidity through operating activities. The presentation of EBITDA is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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[v] Adjusted EBITDA

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Adjusted EBITDA is defined as EBITDA adjusted for the impact of IAS 29, acquisition and transaction costs, Step-Up Expense and non-recurring expenses.

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The Company believes that Adjusted EBITDA represents a useful measure to investors to assess profitability and measure the Company’s ability to generate liquidity through operating activities, without the impact of hyperinflation under IAS 29, acquisition and transaction costs, Step-Up Expense and non-recurring expenses, thereby facilitating the comparison period over period. The presentation of adjusted EBITDA is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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The following table is a reconciliation of operating income (loss) to EBITDA and adjusted EBITDA:

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For the quarter ended September 30, 2025, adjusted EBITDA increased by $7,533 or 56%. The increase was mainly driven by higher Adjusted Gross Margin, partly offset by higher costs related to the Paladin and Sumitomo Transactions and the increase in our promotional activities behind our pipeline and early launch products.

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Explanation of adjustments from EBITDA to Adjusted EBITDA

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[vi] Adjusted EBITDA per share

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Adjusted EBITDA per share is defined as Adjusted EBITDA over number of common shares outstanding at the end of the respective period.

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The Company believes that Adjusted EBITDA per share represents a useful measure to investors to assess profitability and measure the Company’s ability to generate liquidity through operating activities on a per common share basis, without the impact of hyperinflation under IAS 29, acquisition and transaction costs, Step-Up Expense and non-recurring expenses, thereby facilitating the comparison period over period. The presentation of adjusted EBITDA per share is considered to be a non-GAAP ratio and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

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The Company calculated adjusted EBITDA per share as follows:

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