Cresco Labs (CL) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $172.8M, up 5% YoY; Adjusted EBITDA was $34.9M at a 20.2% margin, and free cash flow was $21.2M.

• Cultivation constraints, higher-cost inventory and new-market ramp costs pressured margins, while growth initiatives and an acquisition supported performance.

• Near-term priorities are cash generation, scale and efficiency; federal reform remains an opportunity, not a planning assumption.

Financial highlights

• Q3 net revenue was $172.8M versus $164.9M a year earlier; retail revenue was $121M and net wholesale revenue was $52M, both flat QoQ.

• Adjusted gross profit was $80.9M, or 46.8% of revenue; reported gross profit was $79.5M, or 46.0%. Higher COGS reflected inventory from first-half facility upgrades.

• Adjusted SG&A was $54.2M, or 31.3% of revenue; reported SG&A was $57.7M, including $3.6M of primarily one-time costs.

• Net loss narrowed to $14.5M from $22.0M YoY; Adjusted EBITDA was $34.9M versus $39.8M.

• Operating cash flow was $26.1M versus $6.2M a year earlier; free cash flow was $21.2M versus negative $1.0M.

Outlook and guidance

• Q4 net revenue is expected to decline low single digits sequentially, reflecting wholesale seasonality and pricing pressure; gross margin is expected to be similar to Q3.

• Adjusted SG&A is expected to rise modestly due to Pennsylvania rebranding and Kentucky store-opening costs.

• Higher-cost inventory is expected to affect results into Q1; margin recovery is expected as normal-cost inventory returns and facility upgrades improve yields and production costs.

• 2027 priorities include finding scale and efficiencies across core markets and using AI and other technology to improve productivity and profitability.