Vireo Growth (VREO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue excluding discontinued operations and New York rose 6.2% year-over-year to $22.4M, led by double-digit growth in Maryland and supported by operational improvements such as higher harvest yields and better flower quality.

• GAAP revenue for Q3 was $25.2M, up 2% year-over-year; operating income was $3.9M, down 34.4%, while nine-month operating income surged 177.1% to $14.4M.

• EBITDA for Q3 was $5.7M, down 19.4% year-over-year; nine-month EBITDA increased 82% to $20.6M.

• The company advanced its hemp-derived beverage and gummy product strategy, expanding distribution locally and nationally.

• Recently secured a $10M convertible loan at a premium to market to support strategic initiatives and Minnesota adult-use launch.

Financial highlights

• GAAP gross profit for Q3 was $12.3M, down 6.6% year-over-year; gross margin declined 450 bps to 49%.

• Maryland retail revenue increased 12% and wholesale revenue rose 26% year-over-year in Q3; total Maryland growth was approximately 17%.

• Minnesota Q3 retail revenue declined 3% year-over-year; wholesale revenue up significantly from a low base.

• Net loss for Q3 was $4.9M, a slight improvement from $5.2M loss in Q3 2023.

• Cash on hand at quarter-end was $7.3M; total current assets were $144.0M, with current liabilities at $128.7M.

Outlook and guidance

• Focus remains on preparing for Minnesota's adult-use launch in 2025 and expanding hemp-derived beverage distribution.

• Management expects near-term inventory build-up to impact inventory turns ahead of Minnesota launch.

• Anticipates continued similar financial trends in Q4 as seen in Q3.

• Continued execution of CREAM & Fire strategy, focusing on profitability and operational efficiency.