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Ascend Wellness Holdings, Inc. (AAWH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net revenue was $127.3M, down 0.5% sequentially and down 10.0% year-over-year; Adjusted EBITDA rose to $28.6M (22.4% margin), up 5.7% QoQ and +130 bps margin expansion .
  • Wall Street consensus (S&P Global) looked for $128.34M revenue and -$0.073 EPS; AAWH modestly missed on revenue ($127.30M) and EPS (-$0.12), while company Adjusted EBITDA exceeded SPGI’s EBITDA consensus due to differing definitions . Revenue estimate $128.34M*; EPS estimate -$0.073*; SPGI EBITDA estimate $26.41M*; SPGI EBITDA actual $9.58M* (see Estimates Context; Values retrieved from S&P Global).
  • Management highlighted continued operating cash flow (10th straight quarter), a robust cash balance ($95.3M), and refinancing actions retiring a $60M term loan via new 12.75% senior secured notes due 2029 .
  • On the call, Q3 outlook was “flat to low single-digit” top-line growth with Adjusted EBITDA margin 22–23%; FY25 capex guided to $30–35M (about half for new stores, half for cultivation/production upgrades) .

What Went Well and What Went Wrong

What Went Well

  • Margin execution: Adjusted gross margin rose 260 bps QoQ to 43.4%, and Adjusted EBITDA margin improved 130 bps to 22.4%, driven by unit growth and cost controls .
  • Balance sheet actions: Fully retired the $60M term loan and extended maturities with 12.75% notes due 2029, enhancing flexibility and runway .
  • Retail densification and product momentum: Retail revenue +2.5% QoQ to $86.5M; launched “High Wired” infused products, established top-seller positions in IL/MA; 225 SKUs commercialized in H1 with ~300 planned .
    • CEO: “The retirement of our prior term loan strengthens our balance sheet... We remain committed to initiatives... expanding our vertical margin through retail densification and... differentiated products and elevated customer experiences.”
    • President: “Q2 delivered strong progress, including the addition of three new stores... and the debut of... High Wired... We completed the full-scale launch of our new e-commerce ecosystem...”
    • CFO: “Positive operating cash flow for ten consecutive quarters... improvements through strong cost controls.”

What Went Wrong

  • Pricing pressure and wholesale softness: Wholesale revenue fell 6.4% QoQ to $40.8M; softness in IL and price compression across markets offset NJ strength .
  • Higher G&A impacted net loss: G&A increased to $42.4M (33.3% of revenue) vs $37.1M in Q1; net loss widened to $(24.4)M vs $(19.3)M in Q1 .
  • Year-over-year contraction: Revenue declined 10% YoY ($127.3M vs $141.5M) and net loss increased YoY ( $(24.4)M vs $(21.8)M ), underscoring competitive/intense pricing dynamics .

Financial Results

Core P&L and Cash Flow (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$136.006 $127.997 $127.304
Gross Profit ($USD Millions)$46.871 $39.561 $41.392
Gross Profit Margin %34.5% 30.9% 32.5%
Adjusted Gross Profit ($USD Millions)$56.936 $52.173 $55.279
Adjusted Gross Margin %41.9% 40.8% 43.4%
Net Income - (IS) ($USD Millions)$(16.791) $(19.258) $(24.407)
Net Loss per Share (basic & diluted) ($USD)$(0.08) $(0.09) $(0.12)
Adjusted EBITDA ($USD Millions)$30.239 $27.013 $28.560
Adjusted EBITDA Margin %22.2% 21.1% 22.4%
Cash from Operations ($USD Millions)$35.166 $5.939 $17.801
Free Cash Flow ($USD Millions)$30.1 $1.2 $12.1

Segment Revenue

Segment Revenue ($USD Millions)Q4 2024Q1 2025Q2 2025
Retail Revenue$90.4 $84.4 $86.5
Wholesale Revenue$45.6 $43.6 $40.8

Selected Balance Sheet and Operating KPIs

KPIQ4 2024Q1 2025Q2 2025
Cash & Cash Equivalents ($USD Millions)$88.254 $100.034 $95.270
Net Debt ($USD Millions, Non-GAAP)$220.2 $233.0 $254.3
Inventory ($USD Millions)$89.552 $85.589 $82.317
Weighted Avg Shares (000s)213,329 204,995 203,866
Store Count (incl. partners)39 (end-2024) —44 (H1 2025)

Versus Estimates (S&P Global)

MetricConsensus (Q2 2025)Actual (Q2 2025)
Revenue ($USD)$128.34M*$127.30M
EPS ($USD)-$0.073*-$0.12
EBITDA ($USD)$26.41M*$9.58M*

Values retrieved from S&P Global.

Note: SPGI’s EBITDA reflects their standardized definition; AAWH reports Adjusted EBITDA of $28.56M with a 22.4% margin .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth (YoY/QoQ descriptor)Q3 2025Not providedFlat to low single-digit top-line growth Initiated
Adjusted EBITDA Margin (%)Q3 2025Not provided22%–23% Initiated
Capital Expenditures ($USD)FY 2025Not provided$30–35M; ~50% new stores, ~50% cultivation/production upgrades Initiated
Medium-Term Store TargetMedium term60 total stores (target launched end of 2024) Maintained 60 target; 44 stores including partners in H1 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology & E-commerceQ1: rolling out refreshed e-commerce platform across footprint Full-scale launch of integrated e-commerce ecosystem; AI-driven recommendations; pay-by-bank; revamped tiered loyalty (Ascenders Club) Expanding capabilities and customer engagement
Supply/Demand & PricingQ4: margin gains from vertical mix; pricing pressure across states Continued price compression; wholesale softness in IL; retail pricing pressure; NJ wholesale offset Ongoing headwind
Macro/RegulatoryQ4/Q1: transformation, cost savings; not specific federal updates Call: regulatory uncertainty and lack of federal reform highlighted as a barrier; industry demand resilient Persistent uncertainty
Product/Brand PerformanceQ4: Effin’ launched, quickly top spot in edibles; brand house top-three combined IL/MA/NJ High Wired infused line launched; top-seller in IL/MA; ramping high-margin SKUs (225 H1; ~300 in flight) Strengthening portfolio
Regional TrendsQ4/Q1: Ohio adult-use ramp; IL/NJ/MA pricing/volume pressure Ohio adult-use strong; IL wholesale soft; NJ wholesale improved Mixed; Ohio supportive
Cost Controls & Working CapitalQ4: cost-savings target $30M annualized; inventory rationalization Tenth straight quarter of positive OpCF; margin lift from cost initiatives Sustained discipline
Capital Structure & LiquidityQ1: ended with $100.0M cash; net debt $233M Retired $60M term loan via 12.75% notes; cash $95.3M; net debt $254.3M Term loan retired; maturities extended

Management Commentary

  • CEO (Sam Brill): “The retirement of our prior term loan strengthens our balance sheet and extends our financial runway... expanding our vertical margin through retail densification and... differentiated products and elevated customer experiences.”
  • President (Frank Perullo): “Q2 delivered strong progress, including the addition of three new stores... and the debut of our new infused brand, High Wired... we completed the full-scale launch of our new e-commerce ecosystem... reimagined tiered loyalty program and mobile app...”
  • CFO (Roman Nemchenko): “Positive operating cash flow for ten consecutive quarters... improvements through strong cost controls... we remain steadily focused on delivering value for our shareholders.”

Q&A Highlights

  • Near-term outlook: Management guided Q3 to flat-to-low-single-digit top-line growth with Adjusted EBITDA margin 22–23%, signaling continued focus on margin preservation in a pricing-pressured environment .
  • Capex allocation: FY25 capex $30–35M split evenly between store growth and cultivation/production upgrades, supporting densification and vertical margin strategy .
  • Market dynamics: Regulatory uncertainty and competitive pricing pressures remain primary headwinds; Ohio adult-use tailwinds continue to offset softness in IL and other markets .
  • Balance sheet strategy: Refinancing actions and term loan retirement intended to extend maturities and provide flexibility for opportunistic investments .

Estimates Context

  • Revenue: $127.30M vs $128.34M consensus*; modest miss driven by wholesale softness in IL and pricing pressure partially offset by NJ improvement and retail densification . Values retrieved from S&P Global.
  • EPS: -$0.12 vs -$0.073 consensus*; miss as higher G&A supported expansion and transformation efforts . Values retrieved from S&P Global.
  • EBITDA: SPGI EBITDA “actual” $9.58M* vs $26.41M* estimate; AAWH’s reported Adjusted EBITDA was $28.56M (22.4%), highlighting definitional differences between standardized EBITDA and company non-GAAP Adjusted EBITDA . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin resilience amid pricing pressure: Management’s cost discipline and vertical mix lifted adjusted margins QoQ; watch for sustainability as wholesale pricing remains challenged .
  • Liquidity and maturities improved: Retirement of the $60M term loan and extension via 12.75% notes should reduce near-term pressure and enable selective growth investments .
  • Retail densification and product innovation underpin strategy: New stores, AI-enabled e-commerce, and high-margin branded SKUs support vertical margin expansion and loyalty-driven traffic .
  • Near-term setup: Q3 guided flat to low-single-digit growth with 22–23% adjusted EBITDA margin; performance hinges on execution in Ohio, stabilization in IL/NJ/MA, and continued cost control .
  • Cash generation credible: 10th straight quarter of positive operating cash flow; FCF positive; monitor capex cadence ($30–35M FY25) relative to densification milestones .
  • Estimate recalibration likely: Given revenue/EPS misses, Street models may temper top-line and EPS near term; clarify EBITDA basis (SPGI vs Adjusted) to avoid apples-to-oranges comparisons . Values retrieved from S&P Global.
  • Stock catalysts: Progress on store openings, Ohio adult-use traction, margin consistency at 22–23%, and further evidence of e-commerce/loyalty impact on basket-size and retention could drive sentiment .

Additional notes:

  • Q2 2025 8-K (press release, full financials) read in full; no separate Q2 press releases beyond the 8-K were found in our document system -.
  • Prior quarter releases read in full for trend analysis (Q1 2025 and Q4 2024) - -.