The Cannabist Company (CBSTF) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $114.8M, down 8% sequentially and 11% year-over-year, primarily due to divestitures in Arizona, Eastern Virginia, and Florida, with net loss narrowing to $1.8M from $36.2M YoY.

• Adjusted EBITDA was $14.8M (12.9–13% margin), down from $17.5M in Q2, reflecting the impact of divested businesses and ongoing losses in Florida.

• Major divestitures generated over $120M in gross proceeds, strengthening liquidity and supporting debt reduction.

• The company is over halfway through its transformation plan, exiting loss-making markets, closing underperforming locations, and streamlining operations.

• Ended Q3 with $31.5M in cash, up from $22M in Q2, aided by divestiture proceeds.

Financial highlights

• Q3 2024 revenue: $114.8M, down from $125.2M in Q2 and $128.4M in Q4 2023; nine-month revenue: $362.6M.

• Adjusted EBITDA: $14.8M (12.9–13% margin), down from $17.5M in Q2 and $20.5M YoY.

• Gross profit was $43.8M, up 18% YoY, with gross margin at 38.2%.

• Cash from operations was -$18M, impacted by restructuring costs and deferred payments.

• Capital expenditures were $1.5M in Q3, expected to average $2–$3M per quarter.

Outlook and guidance

• Targeting Adjusted EBITDA margin above 20% in 2025, with further operational improvements and cost savings planned.

• Anticipates growth catalysts in 2025, including adult use in Delaware and new retail locations in New Jersey, Virginia, and Ohio.

• No formal pro forma guidance provided until all divestitures are complete.

• Focus on optimizing asset portfolio, improving liquidity, and enhancing cash flow generation.