Earnings release
Page 1
NEWS RELEASE Cresco Labs Delivers Strong Q3, Maintains Market Leadership, and Unlocks New Growth Opportunities 2025-11-05 CHICAGO--(BUSINESS WIRE)-- Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), the industry leader in branded cannabis products with a portfolio of America’s most popular brands and the operator of Sunnyside dispensaries, today released its nancial and operating results for the third quarter ended September 30, 2025. All nancial information presented in this release is reported in accordance with U.S. GAAP and in U.S. dollars, unless otherwise indicated, and is available on the Company’s investor website, here. Third Quarter 2025 Highlights Third quarter revenue of $165 million. Third quarter operating cash ow of $6 million. Gross pro t of $79 million. Adjusted gross pro t of $80 million; and an Adjusted gross margin of 48.8%. SG&A of $52 million or 31.3% of revenue. Net loss of $22 million, includes a $16 million loss for debt extinguishment related to the re nancing of the Company’s senior secured term loan, and non-cash impairment charges of $2 million related to California assets being considered held for sale. Third quarter Adjusted EBITDA of $40 million and Adjusted EBITDA margin of 24.1%. Retained the No. 1 share position in multiple billion dollar markets. Management Commentary “In Q3, we re nanced our debt and strengthened our balance sheet while delivering solid results and maintaining leadership across key markets through disciplined execution. Our proven retail and wholesale capabilities continue to drive pro tability, while new dispensaries in Ohio, expansion into Kentucky, and our upcoming product launch in Germany are unlocking compelling avenues for growth. Together, these initiatives position Cresco Labs to 1 1 1 1 2 1
Page 2
outperform the market and create lasting shareholder value.” “The cannabis industry is entering a new phase of growth and consolidation, and Cresco Labs is prepared to lead. Operators with scale, e ciency, and discipline will de ne the next chapter. By leveraging our core assets and operational excellence, we’re building an emerging growth platform designed to create long-term value, both within and beyond regulated U.S. cannabis.” Balance Sheet, Liquidity, and Other Financial Information On August 13, 2025, the Company closed a re nancing of its senior secured term credit facility to reduce total debt and extend the debt maturity to 2030. The new $325 million senior secured term loan bears an interest rate of 12.5%, per annum and matures on August 13, 2030. Proceeds from the new facility, together with cash on hand, were used to repay the Company’s prior $360 million facility. As of September 30, 2025, current assets were $243 million, including cash, cash equivalents, and restricted cash of $79 million. An additional $3 million of restricted cash was classi ed as a non-current asset. The Company had senior secured term loan debt, net of discount and issuance costs, of $309 million and a mortgage loan, net of discount and issuance costs, of $18 million. Total shares on a fully converted basis to Subordinate Voting Shares were 490,889,023 as of September 30, 2025. See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP nancialmeasures.According to Hoodie Analytics. Conference Call and Webcast The Company will host a conference call and webcast to discuss its nancial results on Wednesday, November 5, 2025, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-833-470-1428 (US Toll Free) or 1-646-844-6383 (US Local), and providing access code 307245. Archived access to the webcast will be available for one year on Cresco Labs’ investor website, here. Consolidated Financial Statements The nancial information reported in this press release is based on unaudited management prepared nancial statements for the quarter ended September 30, 2025. These nancial statements have been prepared in accordance with U.S. GAAP. The Company expects to le its unaudited condensed interim consolidated nancial 1 2 2
Page 3
statements for the quarter ended September 30, 2025, on SEDAR+ and EDGAR on or about November 7, 2025. Accordingly, such nancial information may be subject to change. All nancial information contained in this press release is quali ed in its entirety with reference to such nancial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated nancial statements it les on SEDAR+ and EDGAR, to the extent that the nancial information contained in this press release is inconsistent with the information contained in the Company’s nancial statements, the nancial information contained in this press release shall be deemed to be modi ed or superseded by the Company’s led nancial statements. The making of a modifying or superseding statement shall not be deemed an admission, for any purposes, that the modi ed or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited nancial statements for the year ended December 31, 2024, led on SEDAR+ and EDGAR. Cresco Labs references certain non-GAAP nancial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-GAAP Financial Measures” section below for more detailed information. Non-GAAP Financial Measures This release reports its nancial results in accordance with U.S. GAAP and includes certain non-GAAP nancial measures that do not have standardized de nitions under U.S. GAAP. The non-GAAP measures include: Earnings before interest, taxes, depreciation, and amortization (“EBITDA”); Adjusted EBITDA; Adjusted EBITDA margin; Adjusted gross pro t; Adjusted gross pro t margin; Adjusted selling, general, and administrative expenses (“Adjusted SG&A”), Adjusted SG&A margin; and Free Cash Flow are non-GAAP nancial measures and do not have standardized de nitions under U.S. GAAP. The Company de nes these non-GAAP nancial measures as follows: EBITDA as net loss (income) before interest, taxes, depreciation, and amortization; Adjusted EBITDA as EBITDA less other (expense) income, net, fair value mark-up for acquired inventory, adjustments for acquisition and non-core costs, impairment and share-based compensation; Adjusted EBITDA Margin as Adjusted EBITDA divided by revenues, net; Adjusted gross pro t as gross pro t less fair value mark-up for acquired inventory and adjustments for acquisition and non-core costs; Adjusted gross pro t margin as Adjusted gross pro t divided by revenues, net; Adjusted SG&A as SG&A less adjustments for acquisition and non-core costs; Adjusted SG&A margin as Adjusted SG&A divided by revenues, net; and Free Cash Flow as Net cash provided by operating activities less purchases of property and equipment and proceeds from tenant improvement allowances. The Company has provided the non- GAAP nancial measures, which are not calculated or presented in accordance with U.S. GAAP, as supplemental information and in addition to the nancial measures that are calculated and presented in accordance with U.S. GAAP and may not be comparable to similar measures presented by other issuers. These supplemental non-GAAP nancial measures are presented because management has evaluated the nancial results both including and 3
Page 4
excluding the adjusted items and believe that the supplemental non-GAAP nancial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP nancial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the U.S. GAAP nancial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP nancial measures to the most directly comparable nancial measures calculated and presented in accordance with U.S. GAAP. About Cresco Labs Inc. Cresco Labs’ mission is to normalize and professionalize the cannabis industry through a CPG approach to building national brands and a customer-focused retail experience, while acting as a steward for the industry on legislative and regulatory-focused initiatives. As a leader in cultivation, production, and branded product distribution, the Company is leveraging its scale and agility to grow its portfolio of brands that include Cresco, High Supply, FloraCal, Good News, Wonder Wellness Co., Mindy’s, and Remedi, on a national level. The Company also operates highly productive dispensaries nationally under the Sunnyside brand that focus on building patient and consumer trust and delivering ongoing education and convenience in a wonderfully traditional retail experience. Through year- round policy, community outreach and SEED initiative e orts, Cresco Labs embraces the responsibility to support communities through authentic engagement, economic opportunity, investment, workforce development, and legislative initiatives designed to create the most responsible, respectable and robust cannabis industry possible. Learn more about Cresco Labs’ journey by visiting www.crescolabs.com or following the Company on Facebook, X or LinkedIn. Forward-Looking Statements This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). Such forward-looking statements are not representative of historical facts or information or current condition but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identi ed by the use of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential,’ or ‘continue,’ or the negative of those forms or other comparable terms. The Company’s forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the Company’s actual results, performance or achievements to be materially di erent from any future results, performance or 4
Page 5
achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2024, led on SEDAR+ and EDGAR, other documents led by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs’ shares, nor as to the Company’s nancial performance in future nancial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company’s forward-looking statements contained herein, whether as a result of new information, any future event, or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the a airs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise. Cresco Labs Inc.Financial Information and Non-GAAP Reconciliations (All amounts expressed in thousands of U.S. Dollars) Unaudited Consolidated Statements of OperationsFor the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Revenues, net $ 164,913$ 163,624$ 179,783Cost of goods sold 85,553 80,368 86,345 Gross pro t 79,36083,25693,438Gross pro t % 48.1% 50.9% 52.0% Operating expenses:Selling, general, and administrative51,640 51,398 56,871Share-based compensation 1,891 2,032 2,202Depreciation and amortization 5,636 4,420 5,702Impairment loss 2,365 9,265 2,320 Total operating expenses 61,532 67,115 67,095 Income from operations 17,82816,14126,343 Other (expense) income, net:Interest expense, net (14,567) (12,562) (15,016)Other expense, net (13,362) (836) (5) Total other expense, net (27,929) (13,398) (15,021) (Loss) Income before income taxes(10,101) 2,743 11,322 Income tax expense (11,867) (16,636) (19,016) Net loss $ (21,968) $ (13,893) $ (7,694) Net loss includes amounts attributable to non-controlling interests. Cresco Labs Inc.Unaudited Reconciliation of Gross Pro t to Adjusted Gross Pro t (Non-GAAP)F hThMhEddS b302025J 302025dS b302024 1 1 5
Page 6
For the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Revenues, net $ 164,913$ 163,624$ 179,783Cost of goods sold 85,553 80,368 86,345 Gross pro t $ 79,360$ 83,256$ 93,438 Fair value mark-up for acquired inventory— — 123Cost of goods sold adjustments for acquisition and other non-core costs1,110 (508) 1,783 Adjusted gross pro t (Non-GAAP)$ 80,470$ 82,748$ 95,344 Adjusted gross pro t % (Non-GAAP)48.8% 50.6% 53.0% Production (cultivation, manufacturing, and processing) costs related to products sold during the period. Cresco Labs Inc.Summarized Consolidated Statements of Financial PositionAs of September 30, 2025 and December 31, 2024 ($ in thousands) September 30,2025 December 31,2024 (unaudited)Cash, cash equivalents, and restricted cash (current)$ 78,705$ 141,003Other current assets 163,938 153,254Property and equipment, net 327,042 344,846Intangible assets, net 291,999 293,994Goodwill 283,484 283,484Other non-current assets 135,170 138,774 Total assets $ 1,280,338$ 1,355,355 Total current liabilities $ 97,373$ 94,338Total non-current liabilities 842,794 872,841Total shareholders’ equity 340,171 388,176 Total liabilities and shareholders’ equity$ 1,280,338$ 1,355,355 Cresco Labs Inc.Unaudited Reconciliation of SG&A to Adjusted SG&A (Non-GAAP)For the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Selling, general, and administrative$ 51,640$ 51,398$ 56,871Adjustments for acquisition and other non-core costs3,920 1,864 3,427 Adjusted SG&A (Non-GAAP)$ 47,720$ 49,534$ 53,444 Adjusted SG&A % (Non-GAAP)28.9% 30.3% 29.7% Cresco Labs Inc.Unaudited Reconciliation of Net Loss to Adjusted EBITDA (Non-GAAP)For the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Net loss $ (21,968) $ (13,893) $ (7,694) D i i d i i 12858 12190 14932 1 1 1 6
Page 7
Depreciation and amortization 12,858 12,190 14,932Interest expense, net 14,567 12,562 15,016 Income tax expense 11,867 16,636 19,016 EBITDA (Non-GAAP) $ 17,324$ 27,495$ 41,270 Other expense, net 13,362 836 5Fair value mark-up for acquired inventory— — 123Adjustments for acquisition and other non-core costs4,443 734 4,759Impairment loss 2,365 9,265 2,320 Share-based compensation 2,311 2,546 2,791 Adjusted EBITDA (Non-GAAP)$ 39,805$ 40,876$ 51,268 Adjusted EBITDA % (Non-GAAP)24.1% 25.0% 28.5% Net loss includes amounts attributable to non-controlling interests. Cresco Labs Inc.Unaudited Summarized Consolidated Statements of Cash FlowsFor the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Net cash provided by operating activities$ 6,164$ 8,831$ 49,363Net cash used in investing activities (6,124) (14,469) (6,269)Net cash used in nancing activities(71,096) (3,466) (2,464)E ect of foreign currency exchange rate changes on cash and cash equivalents— (2) (25) Net (decrease) increase in cash and cash equivalents$ (71,056)$ (9,106)$ 40,605 Cash and cash equivalents and restricted cash, beginning of period153,012 162,118 119,201 Cash and cash equivalents and restricted cash, end of period$ 81,956$ 153,012$ 159,806 Cresco Labs Inc.Unaudited Reconciliation of Operating Cash Flow to Free Cash Flow (Non-GAAP)For the Three Months Ended September 30, 2025, June 30, 2025, and September 30, 2024For the Three Months Ended ($ in thousands) September 30, 2025 June 30, 2025September 30, 2024 Net cash provided by operating activities$ 6,164$ 8,831$ 49,363Purchases of property and equipment(7,180) (13,124) (6,072)Proceeds from tenant improvement allowances— 451 32 Free Cash Flow (Non-GAAP)$ (1,016)$ (3,842)$ 43,323 Media Press@crescolabs.com Investors TJ Cole, Cresco Labs SVP, Corporate Development & Investor Relations investors@crescolabs.com For general Cresco Labs inquiries: 1 7
Page 8
312-929-0993 info@crescolabs.com Source: Cresco Labs 8