Bubs Australia (ASX:BUB) Limited said it secured permanent US Food and Drug Administration authorisation in September 2026 for three of its infant formula products. The company said it is the only Australian infant formula manufacturer holding this authorisation. The announcement came in its report for the quarter ended 30 September 2026, in which group net revenue fell to A$23.1 million.

What the FDA authorisation means

Bubs said potential private label participation in the US market is subject to further regulatory, technical and commercial milestones, so the authorisation does not by itself represent a contract or revenue. The company said its products are now in more than 12,000 US stores across all 50 states, retail scan sales hit a record, up 46.5 per cent on the prior corresponding period and 10.6 per cent on the June quarter, and Amazon consumer sell-through rose more than 14 per cent year on year. The September quarter also marked the first sales through the CVS drug channel.

Revenue by region

Group net revenue was A$23.1 million, down 9.8 per cent from A$25.6 million a year earlier. Bubs said currency translation reduced reported US revenue by A$1.2 million, with the average exchange rate at 0.71 against 0.65 a year earlier.

US revenue was A$15.3 million (US$10.8 million), compared with A$16.8 million (US$11.0 million). The company said Walmart and Target grew strongly while Amazon sales fell because the year-earlier quarter had a higher replenishment base. China revenue was A$2.6 million, up from A$2.5 million, with channel sell-in and sell-through described as normalised. Australia was A$4.1 million, down from A$4.4 million, which the company attributed to cost-of-living pressure while noting early signs of stabilisation. Rest of World was A$1.2 million, down from A$1.9 million because of disrupted trading that the company said is partly recovering.

Cash flow and funding

Receipts from customers were A$24.193 million. Operating cash outflow was A$6.006 million, compared with A$4.4 million in the first quarter of FY26. Operating payments included A$18.7 million for manufacturing and operating costs, A$3.1 million for advertising and marketing, A$4.6 million for staff costs and A$3.0 million for administration and corporate costs. Bubs drew A$3.0 million in new borrowings, and cash fell by about A$3.0 million, from A$9.4 million to A$6.4 million, comprising A$5.0 million in bank balances and A$1.4 million in term deposits.

The company has a A$20.0 million secured trade refinance facility with NAB, of which A$13.0 million is drawn. The facility carries interest of 8.62 per cent a year and matures on 31 August 2027. Undrawn facilities are A$7.0 million, giving total liquidity of A$13.4 million. Bubs estimates 2.2 quarters of funding, which is above the two-quarter threshold, so the additional Appendix 4C questions were marked not applicable. Related-party payments included A$683,000 to key management personnel and A$119,000 in directors' remuneration. The company said the facility is a standby credit line for trade refinancing, and that the quarter's inventory investment is intended to support its marketing push in the United States.

Risks and next steps

Bubs said cash burn rose year on year because of inventory investment, delayed re-entry to Singapore and Vietnam, and timing differences between sell-in and sell-out. The runway is relatively short, and the company plans continued marketing spend. Rest of World revenue remains well below the prior year, currency moves weighed on US revenue and Australian consumer conditions remain soft. The figures are unaudited.

Next steps include re-entering Singapore and Vietnam, where an initial resupply shipment has been sent to Vietnam to relaunch the brand, taking the further regulatory, technical and commercial steps needed before any private label participation, and targeted US marketing intended to convert distribution into sell-through.