High Tide (HITI) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 revenue of CAD 137.8 million, up 11% year-over-year, with brick-and-mortar sales up 16% year-over-year, driven by strong same-store sales and new store openings.

• Opened the 200th store, with a 10% increase in Alberta store count and a 30% increase in Ontario footprint year-over-year, maintaining the largest cannabis retail brand status in Canada.

• Same-store sales rose 6.2% year-over-year, the fastest rate in five quarters, and market share increased to 12% in key provinces.

• Cabana Club loyalty program reached 1.9 million members, up 33% year-over-year, with paid ELITE tier up 120% year-over-year and ELITE memberships surpassing 97,000.

• Entered exclusive discussions for a strategic transaction with a leading German medical cannabis importer and wholesaler.

Financial highlights

• Q2 revenue reached CAD 137.8 million, up 11% year-over-year, but down 3% sequentially due to fewer days in the quarter.

• Consolidated gross margin was 26%, down from 28% a year ago but up from 25% sequentially.

• Adjusted EBITDA was CAD 8.1 million, down 20% year-over-year but up 14% sequentially.

• Free cash flow was CAD 4.9 million, compared to CAD 9.4 million a year ago and CAD -1.9 million in Q1.

• Cash and cash equivalents stood at CAD 34.7 million, with total debt at CAD 25.4 million (0.8x trailing adjusted EBITDA).

Outlook and guidance

• Q3 is expected to be seasonally stronger, with further gross margin improvements anticipated.

• Targeting 20-30 new store openings in 2025, with nine opened year-to-date and over a dozen in development.

• Confident in surpassing 300 stores in Canada, with most growth expected to be organic.

• E-commerce remains under review; all options are on the table to maximize shareholder value.

• Pursuing strategic entry into the German medical cannabis market, leveraging Canadian procurement expertise.