Executive Summary

Q3 2025 delivered the third consecutive quarter of revenue growth to $4.85M, up 39% QoQ, with gross margin holding at 48% despite rapid expansion; operating expenses rose with new store integrations, widening net loss to $2.56M .
Adjusted EBITDA loss increased to $1.27M from $0.62M in Q2 as acquisition-related SG&A was absorbed; management expects improving profitability and operating leverage as integrations complete .
Balance sheet expanded with acquisitions (Total Assets $45.1M vs $24.8M YE24), but Total Liabilities rose to $52.3M largely from consolidated tax obligations; management highlights potential long-term relief tied to IRC 280E reform or federal rescheduling .
Corporate actions in Q3–Q4 included $0.7M incremental capital raised (total $3.2M in 2025) and unsecured notes of $0.75M in September, plus equity issuances to settle payables and facilitate M&A, creating dilution but supporting expansion .
Near-term stock reaction catalysts: continued comp growth stabilization, acquisition closings and synergy capture, balance sheet de-risking, and policy momentum around 280E/rescheduling that could materially reduce liabilities .

What Went Well and What Went Wrong

What Went Well

Revenue momentum: +39% QoQ to $4.85M as Cookies Redding (July) and Santa Clara store contributions ramped; “third consecutive quarter of revenue growth” .
Margin resilience: Gross margin steadied at 48% (vs 49% in Q2) amid value pricing in Santa Clara; SG&A leverage improved with SG&A as % of revenue falling from 111% in Q1 to 79% in Q3 .
Strategic execution: Management emphasized the shift “from recovery into disciplined growth” and an “operational” turnaround, with focus on working-capital activation to drive sustained EBITDA profitability .

What Went Wrong

Profitability pressure: Adjusted EBITDA loss widened to $1.27M (vs $0.62M Q2) and net loss increased to $2.56M (vs $1.89M Q2) as SG&A scaled with acquisitions and transition costs .
Expense growth: Operating expenses rose to $3.82M (+53% QoQ) reflecting full-quarter integration of new locations; loss from operations widened to $(1.50)M vs $(0.81)M Q2 .
Liability burden: Total liabilities climbed to $52.35M (vs $29.56M YE24), including consolidated tax obligations from acquired stores—management points to potential relief tied to 280E reform/rescheduling, but timing remains uncertain .

Financial Results

Income Statement and Margins (USD except percentages)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue	$4.364M*	$2.240M	$3.478M	$4.847M
Diluted EPS - Continuing Ops	$(0.40)*	$(0.08)*	$(0.19)*	$(0.25)*
Gross Margin %	56.1%*	53%	49%	48%
Net Income (Loss)	$(3.344)M*	$(0.564)M	$(1.887)M	$(2.559)M
Adjusted EBITDA	N/A	$(0.420)M	$(0.623)M	$(1.269)M

Values marked with * retrieved from S&P Global.

Operating Expenses and Operating Income (USD)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Operating Expenses	N/A	$2.492M	$2.499M	$3.818M
Loss from Operations	N/A	$(1.301)M	$(0.810)M	$(1.496)M

Balance Sheet Snapshot

Metric	Dec 31, 2024	Sep 30, 2025
Current Assets	$2.871M	$1.741M
Long-Term Assets	$21.949M	$43.340M
Total Assets	$24.820M	$45.081M
Current Liabilities	$9.659M	$25.445M
Long-Term Liabilities	$19.905M	$26.904M
Total Liabilities	$29.564M	$52.349M
Mezzanine Equity & Stockholders’ Deficit	$(4.744)M	$(7.268)M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 2025 / FY 2025	Not provided	Directional: “expect improved profitability and operating leverage as integration nears completion”	Maintained (no formal range)
Gross Margin	Q4 2025	Not provided	Directional: margin resilience through expansion	Maintained (no formal range)
Adjusted EBITDA	2026 Focus	Not provided	Directional: “2026 will be about converting this foundation into cash flow and balance sheet strength”	New directional commentary
Tax liabilities	Ongoing	Not provided	Evaluating strategies incl. potential future settlement opportunities under 280E reform or federal rescheduling	Update on strategy

No formal quantitative guidance ranges were provided this quarter .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript found; themes below reflect management press releases and 8-Ks across quarters.

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
M&A / Store expansion	Q1: Amended LOI Bay Area dispensary; positive EBITDA milestone . Q2: Binding term sheet and MSA for Northern CA dispensary; consolidation under VIE model .	Q3: Redding store added; full-quarter impact of Santa Clara; continued scaling .	Accelerating footprint; integration phase nearing completion .
Margin discipline	Q1: Gross margin 53%; SG&A reductions from restructuring . Q2: Gross margin 49%; pricing/inventory ramp impacts .	Q3: Gross margin 48%; resilience despite value pricing; SG&A % revenue improved (111% → 79%) .	Resilient gross margin; improving operating leverage .
Capital raising & financing	Q2: $0.5M added; two unsecured notes later formalized ($500k and $250k) .	Q3–Oct: Additional $0.7M raised; 2025 total $3.2M .	Continued access to capital; structured terms, warrants .
Regulatory outlook (280E/rescheduling)	Q2: Management anticipates long-term upside from potential 280E changes .	Q3: Active evaluation; highlights potential significant reduction of liabilities on reform/rescheduling .	Ongoing monitoring; potential balance sheet relief .
Brand & retail strategy	Q2: Reinvigorating flagship Korova; global retail banners .	Q3: Emphasis on scaling premium assets at distressed valuations .	Consistent brand-forward retail execution .

Management Commentary

“2025 has been the year we’ve turned recovery into disciplined growth… Our consistent quarterly growth, stable margins, and identified working-capital leverage point to a stronger structured company.” — CEO Sabas Carrillo .
“We’ve shown three quarters of consecutive revenue growth, held gross margins through expansion, and identified the final lever, working capital activation, to drive sustained EBITDA profitability… 2026 will be about converting this foundation into cash flow and balance sheet strength.” — CEO Sabas Carrillo .
Q2 perspective: “We’ve moved from selling non-core assets and reducing overhead to adding profitable retail locations… planning for sustainable medium- and long-term growth.” — CEO Sabas Carrillo .
CFO tone (Q1): Encouraged by positive EBITDA and SG&A discipline; focused on cash flow optimization and capital solutions .

Q&A Highlights

No earnings call transcript available for Q3 2025; no Q&A disclosures found in filings or press releases for this period [ListDocuments: earnings-call-transcript returned none].

Estimates Context

S&P Global consensus estimates for Q3 2025 appear unavailable for EPS and revenue for BLMH; no estimate counts found. As a result, comparison vs Street estimates is not possible this quarter. Values retrieved from S&P Global.
Actual revenue reported: $4.85M .

Key Takeaways for Investors

Execution is driving revenue scale with three consecutive quarter-on-quarter increases; watch for comp stabilization as integration completes and SG&A leverage continues to improve .
Margin resilience (48% gross) through expansion points to solid unit economics; near-term profitability hinges on completing integrations and activating working capital to reduce adjusted EBITDA losses .
Balance sheet expansion adds operating capacity but raises liability load; policy shifts around 280E/rescheduling are a major swing factor for equity value given management’s expectation of potential liability reduction .
Continued access to capital ($3.2M raised YTD and $0.75M unsecured notes) supports M&A and integration, but share issuance to settle obligations and deals increases dilution risk; monitor financing mix and cost .
M&A pipeline remains active (Northern CA target under MSA and consolidation, Redding acquisition), offering top-line growth and potential synergy capture; closing and post-close synergies are important near-term catalysts .
With no formal guidance, trading likely keys off sequential revenue/margin trends, integration updates, capital structure actions, and regulatory developments; risk/reward tied to executing toward EBITDA breakeven and balance sheet de-risking .
Monitor non-GAAP adjustments and cash conversion; sustained margin discipline and SG&A containment will be required to translate growth into positive free cash flow .

Additional detail references:

Q3 2025 press release and 8-K (financial tables, non-GAAP reconciliations, corporate updates) .
Q2 2025 press release and 8-K (comparatives, M&A and capital raise) .
Q1 2025 press release and 8-K (EBITDA milestone, SG&A management, amended LOI) .
Acquisition and MSA details (July 1) establishing VIE consolidation and integration control .
Financing notes (September) formalizing prior advances, warrants, and 8% coupon structure .

BLUM HOLDINGS, INC. (BLMH)·Q3 2025 Earnings Summary