Executive Summary

Q2 revenue increased to $3.5M from $2.2M in Q1, driven by mid‑quarter contributions from a newly added Bay Area retail location; gross margin was 49% (vs. 53% in Q1 and 42% in Q2’24). Operating expenses were flat QoQ at $2.5M but down sharply YoY from $8.0M .
Net loss from continuing operations was $1.9M (vs. $0.6M in Q1), reflecting lower gross margin from initial inventory build and promotional pricing during the new store ramp; Adjusted EBITDA loss was $0.6M (vs. $0.4M in Q1) .
Management framed the turnaround as complete and signaled a disciplined growth phase focused on revenue expansion, margin improvement, cost control, and selective M&A in core California markets; expects revenue and gross margins to improve as new locations stabilize and purchasing consolidates .
Strategic updates: (1) Began consolidating a Northern California dispensary via MSA under the VIE model (effective July 1, 2025) with an all‑stock transaction valued up to $5.0M and earn‑outs; (2) Secured an additional $0.5M capital on Aug 11, bringing 2025 capital raised to $2.1M .

What Went Well and What Went Wrong

What Went Well
- Sequential top‑line growth as a new Bay Area location contributed mid‑quarter; revenue rose from $2.2M to $3.5M QoQ .
- Gross margin improved materially YoY to 49% from 42% on product mix and pricing strategies .
- Operating expenses held flat QoQ at $2.5M and were down 69% YoY versus $8.0M in Q2’24 after restructuring and lower litigation costs .
- Quote: “We believe that Blüm has completed its turnaround and is now entering a disciplined growth phase…”; focus on margin expansion and selective M&A .
What Went Wrong
- Net loss from continuing operations widened to $1.9M versus $0.6M in Q1, due to lower gross margins and flat OpEx while integrating a new location .
- Adjusted EBITDA loss increased to $0.6M from $0.4M in Q1 as the store ramp incurred initial inventory build and promotional pricing .
- Q2’24 benefited from one‑time gains tied to the Blüm Santa Ana sale; the YoY compare is tough with Q2’24 net income from continuing ops at $7.3M and total net income $23.4M .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$3.80	$2.24	$3.48
Gross Profit ($USD Millions)	$1.59	$1.19	$1.69
Gross Margin (%)	42%	53%	49%
Operating Expenses ($USD Millions)	$8.01	$2.49	$2.50
Operating Income ($USD Millions)	$(6.42)	$(1.30)	$(0.81)
Net Income from Continuing Ops ($USD Millions)	$7.27	$(0.56)	$(1.89)
Adjusted EBITDA (Non‑GAAP) ($USD Millions)	—	$(0.42)	$(0.62)
Diluted EPS – Continuing Ops ($)	$0.66*	$(0.08)*	$(0.19)*

Notes: “—” = not disclosed in cited documents. Values with “*” retrieved from S&P Global.

Additional non‑GAAP detail: Q2’25 non‑GAAP adjustments included change in fair value of derivative liability ($0.247M) and loss on extinguishment of debt ($0.174M) in reconciling to Adjusted EBITDA .
Balance sheet snapshot: Total assets rose to $39.4M vs $24.8M at 12/31/24 (acquisition impact); total liabilities increased to $46.0M vs $29.6M, with consolidated store tax obligations; management is evaluating strategies and potential 280E/rescheduling tailwinds to address tax obligations .

KPIs

New store contribution: mid‑quarter addition of a Bay Area location drove sequential revenue growth .
Gross margin trajectory: 42% (Q2’24) → 53% (Q1’25) → 49% (Q2’25, ramp/promotions) .
OpEx discipline: ~$2.5M in Q1 and Q2’25 vs $8.0M in Q2’24 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	H2 2025 / Near‑term	None provided	Management “expects revenue … to improve over the coming quarters as new locations stabilize and purchasing consolidates”	Directional (no numeric range)
Gross Margin	H2 2025 / Near‑term	None provided	Management “expects … gross margins to improve over the coming quarters”	Directional (no numeric range)
M&A/Store Count	2025	None provided	Signed MSA; intends to acquire majority interests in a Northern CA dispensary; all‑stock consideration up to $5.0M with earn‑outs	Pipeline updated
Tax/Liabilities	Multi‑year	None provided	Evaluating strategies to address consolidated store tax obligations; potential reduction if federal rescheduling/280E reform occurs	Qualitative update

No formal quantitative guidance ranges were issued in the quarter .

Earnings Call Themes & Trends

No earnings call transcript was filed for Q2 2025; themes compiled from company press releases and filings.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Operating margins	Q4’24 gross margin ~45%; Q1’25 margin 53% with pricing discipline and mix	49%; down QoQ on new store ramp/promotions; up YoY vs 42%	Stabilizing with ramp effects
Cost structure	Q4’24 SG&A high; Q1’25 OpEx down to $2.5M via restructuring	OpEx flat QoQ at $2.5M; 69% lower YoY vs $8.0M	Sustained discipline
M&A/footprint	Q1’25: A&R LOI to acquire Bay Area dispensary; immediate control via MSA contemplated	July 1 MSA effective; consolidating a Northern CA retail operation under VIE; signed agreement to acquire another dispensary (up to $5.0M all‑stock)	Acceleration
Capital	Raised $1.6M by May 14, 2025	Additional $0.5M on Aug 11; $2.1M YTD 2025	Incremental
Legal/regulatory	Bankruptcy Court approval of settlement with People’s (order entered May 2)	Monitoring 280E/rescheduling; considering strategies to address consolidated tax liabilities	De‑risking legacy; potential upside
Brand/product	—	Reinvigorating flagship high‑potency brand and expanding under recognized retail banners	Execution underway

Management Commentary

CEO strategic framing: “We believe that Blüm has completed its turnaround and is now entering a disciplined growth phase… The Company remains focused on disciplined capital deployment, margin expansion, and selective M&A in core California markets.”
On operating model/capital: “We’ve done this in a way that matches our resources… sometimes buying outright, sometimes operating under agreements that give us full control without tying up large amounts of cash.”
On brands/retail: “We’re also breathing new life into our flagship high‑potency brand and expanding our presence under globally recognized retail banners.”
On capital structure: “We continue to focus on strengthening our cash position and reducing high‑cost debt through a mix of short‑term loans, convertible notes, and strategic investor participation.”
CFO tone (prior quarter context): “Positive EBITDA… reduced SG&A… focused on optimizing cash flow and exploring capital solutions…” .

Q&A Highlights

No earnings call transcript was filed for Q2 2025; there are no public Q&A disclosures for this quarter. Management’s clarifications on margin trajectory, store ramp dynamics, capital plans, and M&A pipeline are drawn from the press release and 8‑K exhibits .

Estimates Context

S&P Global consensus: Not available for Q2 2025; the S&P feed shows actuals but no consensus or estimate counts for revenue or EPS in the quarter [GetEstimates: Q2 2025 showed actual revenue $3.478M, EBITDA $(0.623)M, no consensus or estimate counts].
Implication: With limited/no Street coverage, post‑print estimate revisions are unlikely; investors should anchor on company‑reported KPIs (gross margin, OpEx run‑rate) and the integration cadence of new locations .

Key Takeaways for Investors

Sequential revenue growth with a mid‑quarter store addition, but near‑term margin headwinds from inventory build/promotions; watch Q3 stabilization for confirmation of the “improving revenue and margin” trajectory management outlined .
Cost discipline is holding: OpEx flat at ~$2.5M QoQ and down 69% YoY; this supports operating leverage if gross profit scales with new locations .
M&A platform turning on: MSA control and planned equity acquisitions expand the Northern CA retail footprint with limited upfront cash; integration execution and earn‑out thresholds are key diligence points .
Balance sheet lever: Assets up with consolidation; liabilities (including store‑level tax obligations) increased; management is evaluating strategies and potential 280E/rescheduling relief—policy progress would be a material catalyst .
With no formal guidance and minimal Street coverage, stock narrative will hinge on quarterly evidence of: (1) margin normalization at new stores, (2) OpEx control, (3) same‑store trends, and (4) disciplined deal execution .
Near‑term trading setup: Potential upside on signs of margin rebound and confirmation of acquisition closings; risk skew from integration costs and cannabis macro/regulatory timing .

Footnote: EPS values marked with “*” retrieved from S&P Global.

BLUM HOLDINGS, INC. (BLMH)·Q2 2025 Earnings Summary