Charlotte's Web (CWBHF) investor relations material

Executive summary

• Q3 revenue fell 18.3% YoY to $9.393M, while gross margin rose to 46.9%; operating loss narrowed to $3.694M, its lowest level since 2019.

• California restrictions and softer category demand weighed on sales; broad-spectrum products were reintroduced in California, where sales began recovering.

Financial highlights

• Q3 gross profit was $4.403M, down 1.7% YoY; net loss narrowed to $3.458M from $5.818M, with EPS of $(0.01) vs. $(0.04).

• Q3 adjusted EBITDA loss narrowed to $0.7M from $2.2M YoY.

• 9M revenue declined 14.1% to $31.407M; net loss was $20.697M vs. $18.318M, including a $4.216M debt-extinguishment loss.

• 9M gross profit was $14.764M, down 11.6% YoY; operating loss narrowed to $12.376M from $14.674M.

• Q3 SG&A fell 16.8% to $8.097M; 9M SG&A declined 13.5% to $27.140M, reflecting lower paid-media spend and cost controls.

Outlook and guidance

• Cash and cash equivalents and short-term investments are expected to fund operations and planned capex for the next 12 months; longer-term liquidity depends on operating performance, revenue growth and expense management.

• Cost containment is expected through the rest of 2026, including efficiency improvements, lower media costs, more efficient technology and changes to revenue and partnering strategies.

• Gross-margin target remains ~50%; quarterly results may vary with inventory adjustments and federal-rule outcomes.

• Preparations are underway for potential Medicare pilot participation in 2027; adoption has been limited, no meaningful BEI-related revenue is expected in 2026, and future terms remain uncertain.

• Growth priorities include customer acquisition and retention, integrative healthcare and participation in CMS Innovation Center models; a corporate update is planned after Dec. 11, 2026.