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Ascend Wellness Holdings, Inc. (AAWH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $136.0M (-4.0% q/q) as retail softened in IL/MI/NJ/MA amid pricing pressure; however, profitability improved with Adjusted EBITDA of $30.2M (22.2% margin, +450 bps q/q) and Adjusted Gross Margin of 41.9% (+410 bps q/q) as cost actions and mix shift helped margins .
  • Cash generation was strong: Cash from Operations of $35.2M and Free Cash Flow of $30.1M, the eighth consecutive quarter of positive operating cash flow; year-end cash was $88.3M and Net Debt was $220.2M .
  • Full-year 2024 revenue grew 8.3% to $561.6M and Adjusted EBITDA rose 9.1% to $116.2M (20.7% margin), with wholesale expansion offsetting retail pressure in certain states .
  • Strategic/capital allocation: the company repurchased 11M shares in Q4 and launched a normal course issuer bid in Jan-2025 (up to ~5% of shares or $2.25M), repurchasing 620,500 shares subsequent to year-end; management emphasized densification (10 stores in development) and balance-sheet discipline .
  • Estimate comparisons: Wall Street consensus from S&P Global was unavailable at the time of analysis due to an access limit; beats/misses vs estimates could not be assessed (will update when available).

What Went Well and What Went Wrong

  • What Went Well

    • Margin execution outperformed internal expectations: Adjusted EBITDA of $30.2M (22.2% margin) and Adjusted Gross Margin of 41.9% driven by cost savings, better vertical mix, and production efficiencies; mgmt: “first full quarter with our new management team… improving profitability… and driving cash flow generation” .
    • Robust cash generation and liquidity: Q4 Cash from Operations of $35.2M and FCF of $30.1M; year-end cash $88.3M and Net Debt $220.2M .
    • Capital allocation and strategic positioning: 11M shares repurchased at a discount; NCIB initiated; densification strategy underway with ten stores in development (OH, PA, partner stores in IL/NJ); new effect-based brand (Effin’) gaining early traction .

  • What Went Wrong

    • Top-line softness q/q: Q4 revenue fell 4.0% q/q to $136.0M as retail and third-party wholesale declined sequentially; retail decreased 3.5% to $90.4M and third‑party wholesale fell 5.0% to $45.6M .
    • Retail headwinds in key markets: softness in IL/MI/NJ/MA driven by pricing pressure and volume, partially offset by OH adult-use ramp and new IL partner stores .
    • Net loss persists (though improved q/q): Q4 net loss was $(16.8)M vs $(28.3)M in Q3; full-year net loss $(85.0)M largely due to absence of a $22.8M tax credit recognized in 2023 .

Financial Results

Consolidated P&L and Profitability

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue, net ($M)$140.2 $141.5 $141.6 $136.0
Gross Profit ($M)$47.5 $41.6 $43.7 $46.9
Gross Margin (%)33.9% (calc from table)29.4% 30.9% 34.5%
Adjusted Gross Profit ($M)$60.1 $53.0 $53.6 $56.9
Adjusted Gross Margin (%)42.9% 37.5% 37.8% 41.9%
Net Loss ($M)$(19.3) $(21.8) $(28.3) $(16.8)
Diluted EPS ($)$(0.09) $(0.10) $(0.13) $(0.08)
Adjusted EBITDA ($M)$32.4 $28.3 $25.1 $30.2
Adjusted EBITDA Margin (%)23.1% 20.0% 17.7% 22.2%

Notes: Q4 2024 sequential changes cited by the company: revenue -4.0% q/q; retail -3.5% q/q; wholesale -5.0% q/q; Adjusted EBITDA margin +450 bps q/q .

Segment Revenue (Quarterly)

Segment ($M)Q2 2024Q3 2024Q4 2024
Retail Revenue$93.1 $93.6 $90.4
Third‑Party Wholesale Revenue (net)$48.5 $48.0 $45.6

KPIs and Balance Sheet

KPIQ3 2024Q4 2024
Cash and Cash Equivalents ($M)$65.3 $88.3
Net Debt ($M, non‑GAAP)$240.6 $220.2
Cash from Operations ($M)$2.0 $35.2
Free Cash Flow ($M, non‑GAAP)—$30.1

Full-year 2024: Revenue $561.6M (+8.3% y/y) and Adjusted EBITDA $116.2M (20.7% margin, +15 bps y/y) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (Q4’24)Change
Net Revenue growth vs FY 2023FY 2024+11% to +13% y/y (revised in Q2) No update in Q4; actual FY 2024 +8.3% y/y delivered Not updated (FY actual below prior range)
Adjusted EBITDA growth vs FY 2023FY 2024+5% to +10% y/y (revised in Q2) No update in Q4; actual FY 2024 +9.1% y/y delivered Not updated (FY actual within range)
Cash from Operations (ex tax refunds)FY 2024>$40M (revised in Q2) No update in Q4; actual FY 2024 $73.3M (including total CFO) Not updated (delivery above threshold)
FY 2025 GuidanceFY 2025—No explicit FY 2025 guidance provided in Q4 release —

Earnings Call Themes & Trends

Note: The Q4 2024 earnings call transcript was not available in the document set; trends are derived from the company’s Q2–Q4 press releases.

TopicPrevious Mentions (Q2–Q3 2024)Current Period (Q4 2024)Trend
Cost savings / TransformationTargeting ~$30M 2025 savings; headcount reductions and org realignment “Substantially completing” $30M annualized run-rate savings; margin step-up achieved Improving execution
Ohio adult-use rampObtained dual-use certificates; adult-use launch to begin Adult-use contributed to offset retail softness; 5 stores in OH Positive contribution
Wholesale expansionQ2/Q3 wholesale growth; mix offsets retail headwinds Q4 third-party wholesale down 5% q/q, with IL/NJ declines, MA improvement Mixed
Retail competition/pricingRetail headwinds in IL/NJ/MA; pricing pressure noted Continued pricing pressure and volume softness in IL/MI/NJ/MA Persistent headwind
Capital allocationRefinanced term loan (Q2); liquidity progress 11M shares repurchased; NCIB initiated; cash up $23M q/q Accretive actions
Densification / Store pipelineNetwork at 38–39 stores; PA and IL partner additions 10 stores in development; targeted urban density strategy Accelerating pipeline
Inventory management—Steps to rationalize inventory; “more rigorous purchase planning” Improving discipline

Management Commentary

  • CEO Sam Brill: “Improving profitability, maximizing asset efficiency, and driving cash flow generation… substantially completing our $30 million in annualized cost savings target… now turning to driving revenue growth… executing our densification strategy” .
  • President Frank Perullo: “Focused on… consistent, high-quality products… densification strategy and transformation initiatives… well-positioned to thrive… lead as a premier operator” .
  • CFO Roman Nemchenko: “450 bps sequential improvement in Adjusted EBITDA margin and $30.1M in Free Cash Flow… steps to rationalize inventory levels… strong start for our new leadership team” .

Q&A Highlights

  • The Q4 2024 earnings call transcript was not available in the document set; Q&A themes and any guidance clarifications cannot be summarized at this time. The company held a conference call on March 12, 2025 at 5:00 p.m. ET .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at the time of analysis due to an access limit; as a result, we cannot assess beats/misses versus Street for Q4 2024. We will update this section once S&P Global estimates can be retrieved.

Key Takeaways for Investors

  • Margin/FCF inflection despite revenue softness: sequential margin expansion (Adjusted EBITDA margin +450 bps q/q) and $30.1M FCF signal cost program benefits and operating discipline .
  • Retail remains pressured in IL/MI/NJ/MA; watch for stabilization and mix shift (vertical penetration) to sustain margin gains even if pricing remains competitive .
  • Ohio adult-use and MA/NJ production efficiencies are tangible offsets; incremental densification and partner stores could re-accelerate revenue as 2025 progresses .
  • Balance sheet trend is positive: cash up $23M q/q to $88.3M; Net Debt down to $220.2M; continued operating cash flow offers flexibility .
  • Capital returns are now part of the story (11M shares repurchased; NCIB underway); execution against the cap allocation program will be a narrative driver .
  • Wholesale momentum is mixed (IL/NJ down, MA improving); state-level dynamics remain key to near-term revenue trajectory .
  • FY24 delivery vs Q2 guidance: revenue growth below the +11–13% range, EBITDA growth within +5–10%, and CFO materially above >$40M; directionally supportive for credibility on cost/FCF targets, with top-line recovery the next focus .
Sources
- Q4 2024 (8-K 2.02 press release and financial schedules): **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:0]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:1]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:2]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:3]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:4]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:5]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:6]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:8]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:9]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:10]** **[1756390_0001628280-25-012342_awhq42024pressrelease.htm:11]**
- Q3 2024 (8-K 2.02 press release and financial schedules): **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:0]** **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:1]** **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:2]** **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:5]** **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:6]** **[1756390_0001628280-24-046851_ex991awhq32024pressrelease.htm:7]**
- Q2 2024 (8-K 2.02 press release and financial schedules): **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:0]** **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:1]** **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:2]** **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:5]** **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:6]** **[1756390_0001628280-24-034523_awhq22024pressrelease.htm:7]**