Charlotte's Web (CWBHF) Q2 2025 earnings summary

Executive summary

• Achieved second consecutive quarter of year-over-year revenue growth, with Q2 2025 revenue up 4.2% to $12.8 million, driven by new product launches, omnichannel expansion, and functional mushroom and low-dose THC gummies.

• Transformation initiatives, operational improvements, and in-house production of Brightside™ gummies stabilized the business, improved cost structure, and enhanced margins.

• Direct-to-consumer and omnichannel expansion, including Amazon, TikTok Shop, Walmart.com, and Faire, are driving incremental revenue and market reach.

• Regulatory environment for CBD and hemp-derived products is evolving, with recent progress in Washington potentially benefiting established brands.

• Innovative product launches, such as Brightside Delta-9 THC and functional mushroom gummies, exceeded expectations and diversified revenue streams.

Financial highlights

• Q2 2025 revenue was $12.8 million, up 4.2% year-over-year; gross profit was $6.0 million (46.8% margin), compared to $2.6 million (21.0%) in Q2 2024, which included a $3.8 million non-cash inventory provision.

• Adjusted EBITDA for Q2 2025 was $(3.5) million to $(3.6) million, a 30.8%–37.1% improvement year-over-year.

• SG&A expenses reduced 31.7% year-over-year to $10.1 million, aided by the termination of the MLB Promotional Rights Agreement.

• Net loss for Q2 2025 was $6.3 million ($0.04/share), a 43% improvement from $11.1 million ($0.07/share) last year.

• Cash and cash equivalents as of June 30, 2025, were $15.3 million; working capital was $29.3–$29.4 million.

Outlook and guidance

• Targeting positive cash flow in 2026, with sequential improvements expected in Q4 2025 as cost savings and manufacturing efficiencies take effect.

• Projecting $9 million in annualized cost savings for 2026: $6 million from SG&A and $3 million from in-house manufacturing.

• Gross margins expected to return to the low to mid-50% range as internalization and product mix optimization are completed.

• Management expects continued cost reductions and is confident in achieving positive cash flow, supported by lower operating expenses and expanding gross margins.

• Existing liquidity is expected to fund operations and planned capital expenditures for the next 12 months.