SNDL (SNDL) Q3 2025 earnings summary

Executive summary

• Achieved record quarterly free cash flow of $16.7 million in Q3 2025 and first-ever positive cumulative free cash flow for the first nine months, totaling $7.7 million year-to-date.

• Cannabis business delivered sustained double-digit revenue growth for the fifteenth consecutive quarter, with margin expansion in retail and reductions in SG&A expenses.

• Reported operating loss of $11.1 million, mainly due to $11.9–$12 million in unfavorable non-cash items, including share-based compensation, inventory adjustments, and asset impairments.

• Maintained a strong balance sheet with no debt and over $240 million in unrestricted cash as of September 30, 2025.

• Continued progress on regulatory review for the acquisition of 32 1CM cannabis stores and investments in new store openings.

Financial highlights

• Net revenue for Q3 2025 reached $244.2 million, up 3.1% year-over-year, driven by cannabis segments.

• Gross profit was $64.2 million, a 1.9% increase year-over-year, despite $3.9 million in non-cash inventory adjustments.

• Consolidated gross margin was 26.3%, down 0.3pp year-over-year due to inventory adjustments.

• Adjusted operating loss was $9.5 million, a 42.7% improvement year-over-year.

• Free cash flow for Q3 was $16.7 million, up 81% year-over-year.

Outlook and guidance

• Expectation for cannabis operations gross margin to stabilize around 25% going forward.

• Anticipate continued growth in international sales, supported by ramped-up production at Atholville facility.

• Projected monthly production at Atholville to exceed 15,000 kg in 2026, with most output directed to international markets.

• Cannabis retail revenue growth expected to remain in low single digits, with margins stabilizing.

• Strategic priorities include driving sustainable growth, consistent free cash flow, and operating income growth.