Verano (VRNO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $210 million, down 5% year-over-year, with gross profit of $100 million (47% margin) and Adjusted EBITDA of $54.4 million (26% margin).

• Net loss for the quarter was $12 million (-5% margin), compared to a $5 million loss (-2%) in Q1 2024, impacted by lower revenue, gross profit, and higher tax provision.

• Operations span 13 states, covering an 89 million adult population, with 155 retail locations and 1,200+ wholesale accounts.

• Retail revenue was $169 million, flat year-over-year, driven by growth in Ohio, Virginia, Arizona, and Florida, offset by price compression and loss of Arkansas revenue.

• Wholesale revenue was $80 million, down 8% year-over-year, due to pausing Massachusetts operations and a focus on creditworthy customers.

Financial highlights

• Gross margin was 47%, down from 51% in the prior year, due to revenue decline and increased promotions.

• SG&A expenses decreased by $5 million year-over-year to $85 million, reflecting operational efficiencies despite new store openings.

• Cash and equivalents stood at $84 million as of March 31, 2025, with total debt of $421 million.

• CapEx for Q1 was $14 million, up from $10 million year-over-year; full-year CapEx guidance raised to $30–$45 million.

• Total assets were $1.97 billion, with shareholders' equity of $943.4 million.

Outlook and guidance

• Margin improvement and stronger cash flow are expected in the second half of 2025 as one-time items subside and efficiency measures take effect.

• Plans to potentially pay down an additional $50 million in debt in the second half of 2025.

• Full-year CapEx to focus on facility upgrades and strategic retail expansion.

• Management is prioritizing further efficiencies and cost-saving initiatives to improve profitability.