IM Cannabis (IMCC) Q4 2024 earnings summary

Executive summary

• Achieved significant growth in Germany following partial legalization in April 2024, with Germany accounting for 40% of total revenue in H2 2024 versus 11% in 2023, and a 183% annual revenue surge to $15.5M.

• Strategic focus shifted to operational efficiency, cost management, and supply chain integration, resulting in a 53% reduction in operating expenses since 2022 and a 42% decrease in Q4 2024 year-over-year.

• Adjusted EBITDA turned positive at CAD 0.5 million ($0.5M) in Q4 2024, compared to a loss of CAD 4.3 million ($4.3M) in Q4 2023; annual adjusted EBITDA loss decreased 87% to CAD 1.1 million ($1.1M).

• Cleared out non-premium inventory, impacting gross margin but setting a leaner foundation for 2025.

• Net loss from continuing operations was CAD 11.8 million ($11.8M) in 2024, compared to CAD 10.2 million ($10.2M) in 2023.

Financial highlights

• Full-year 2024 revenue was CAD 54 million ($54.0M), up 11% year-over-year; Q4 revenue rose 25% to CAD 13.3 million ($13.3M).

• Gross profit for 2024 was CAD 8.5 million ($8.5M), down 14% year-over-year due to a one-time inventory clearance of $3.8M; Q4 gross profit was CAD 2.7 million ($2.7M), up 238%.

• G&A expenses fell 27% to $8.0M in 2024; selling and marketing expenses dropped 34% to $7.1M.

• Other operating expenses of $3.2M in 2024 included $2.7M from the Oranim agreement revocation and $0.5M goodwill impairment.

• Diluted loss per share for 2024 was CAD 4.51 ($(4.51)); Q4 2024 was CAD 0.32 ($(0.32)).

Outlook and guidance

• Expecting Q1 2025 to be the best sales quarter to date in Germany, driven by a strengthened supply chain and operational efficiencies.

• Margin improvement anticipated in 2025 as inventory write-offs are not expected to recur.

• No significant growth expected in Israel for 2025; focus remains on German market expansion.