SNDL (SNDL) investor relations material

Executive summary

• Achieved first-ever positive operating income and net earnings in Q2 2025, driven by strategic improvements, strong growth in Cannabis and Liquor Retail, and disciplined cost management, including a $5M G&A reduction year-over-year.

• Cannabis business outpaced the Canadian recreational market nearly threefold, with 17.4% year-over-year growth and benefits from vertical integration and acquisitions.

• All segments reported gross margin expansion, with Liquor Retail returning to growth and achieving record margins.

• Maintained a strong balance sheet with no debt and over $200M in unrestricted cash, supporting growth investments and M&A.

• Operational rigor and cost management yielded significant savings and improved productivity.

Financial highlights

• Net revenue reached $244.8M in Q2 2025, up 7.3% year-over-year; gross profit was $67.6M, up 16.2%, with gross margin at 27.6%.

• Adjusted operating income was $5.8M–$6M, a 226% increase year-over-year; operating income was $5M after restructuring charges.

• Net earnings of $2.9M in Q2 2025, compared to a net loss of $5M in Q2 2024.

• Free cash flow was negative $7.9M, impacted by working capital, annual incentive, insurance payments, and CapEx for new stores.

• No outstanding debt; unrestricted cash of $208.2M as of June 30, 2025.

Outlook and guidance

• Management expects meaningful international sales growth in the second half of the year, building on $3.8M in Q2 export revenues.

• Strategic priorities include expanding retail footprints, launching the Rise Rewards loyalty program, and evaluating U.S. cannabis exposure.

• Anticipates closing the acquisition of 32 cannabis retail stores from 1CM Inc. in Q3 2025.

• Ongoing investments in talent, operational improvements, and CAPEX to support long-term growth and profitability.

• Focused on sustainable growth, market share expansion, and consistent free cash flow and operating income growth.