Executive Summary

Q3 revenue of $79.9M declined 7.5% QoQ and 30.3% YoY, driven by sale of three Pennsylvania dispensaries and price compression; Adjusted EBITDA fell to $3.0M from $8.5M in Q2 .
Consensus missed: revenue ($86.5M* est vs $79.9M actual), Primary EPS (-$0.04* est vs -$0.0452* actual), with caution that EBITDA definitions differ (SPGI tracks “EBITDA,” company reports GAAP EBITDA $11.3M and Adjusted EBITDA $3.0M) .
Footprint optimization continues: wholesale revenue down 20% QoQ to $14.6M, retail count 51 at quarter-end; subsequent to quarter, seventh Ohio store opened and Florida exit completed for $11M gross proceeds .
Management emphasized liquidity, balance sheet actions, and potential additional divestitures/strategic alternatives; adult-use launch in Delaware cited as a bright spot .

What Went Well and What Went Wrong

What Went Well

Adult-use launch in Delaware (Aug 1) supported performance; CEO: “A highlight of the third quarter was the start of Adult Use in Delaware… Retail gross margin improved sequentially as a result of more disciplined discounting” .
Liquidity and portfolio actions: PA sale contributed >$8M net cash; subsequent Florida exit yielded $11M gross proceeds with potential $1M contingent payment .
Store growth in Ohio: opened sixth location in Q3, seventh post quarter, with one more in development; retail operations being optimized .

What Went Wrong

Revenue and margin pressure: revenue -7.5% QoQ; Adjusted Gross Margin fell to 32.1% (from 33.1% Q2) due to price compression and wholesale inventory reduction .
Wholesale softness: wholesale revenue down 20% sequentially to $14.6M; wholesale mix fell to ~18% of revenue from 21% in Q2 .
Earnings: Adjusted EBITDA decreased to $3.0M (from $8.5M Q2), net loss widened sequentially (though improved vs Q2) to -$14.7M, reflecting lower gross profit dollars and ongoing SG&A .

Financial Results

Consolidated P&L and EPS vs Prior Periods

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Thousands)	$114,783	$87,440	$86,350	$79,912
Gross Profit ($USD Thousands)	$43,810	$29,285	$17,153	$22,911
Adjusted Gross Profit ($USD Thousands)	$43,810	$31,225	$28,553	$25,667
Adjusted Gross Margin (%)	38.2%	35.7%	33.1%	32.1%
Income (Loss) from Operations ($USD Thousands)	$(5,626)	$(8,159)	$(15,837)	$(12,030)
Net Income (Loss) ($USD Thousands)	$(1,763)	$(32,206)	$(77,386)	$(14,655)
EBITDA (GAAP, $USD Thousands)	$44,969	$(10,207)	$(7,931)	$11,332
Adjusted EBITDA ($USD Thousands)	$14,815	$8,293	$8,483	$3,041
Diluted EPS ($USD)	$(0.00)	$(0.07)	$(0.16)	$(0.03)

Notes: Non-GAAP adjustments excluded $2.7M (Q3 2025) and $11.4M (Q2 2025) from Adj. Gross Profit and Adj. EBITDA; see company filings for detail .

Segment/KPI Snapshot

Metric	Q2 2025	Q3 2025
Wholesale Revenue ($USD Millions)	$18.4	$14.6
Wholesale Mix (% of Total Revenue)	~21%	~18%
Active Retail Count (Quarter-End)	53	51
Capital Expenditures ($USD Millions)	$2.0	$0.2
Cash ($USD Thousands, Quarter-End)	$15,456	$17,761

Balance Sheet Highlights

Metric ($USD Thousands)	Q1 2025	Q2 2025	Q3 2025
Cash	$18,936	$15,456	$17,761
Total Assets	$648,779	$563,838	$536,509
Total Liabilities	$710,752	$702,684	$689,458
Total Equity	$(61,973)	$(138,846)	$(152,949)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures	2025 (per quarter)	$2–$3M per quarter (avg)	Q3 actual $0.2M ; no updated forward capex guide disclosed in Q3	Maintained (no explicit update)
Retail Expansion	2025	Additional openings in Ohio and Virginia (1 in OH expected in Q3)	Subsequent to Q3, seventh Ohio store opened; one more in development; Virginia in development	Maintained/progressed
Strategic Alternatives	Ongoing	N/A	Management continues to evaluate divestitures and other strategic alternatives	New emphasis/continued focus

No explicit numeric revenue/margin guidance provided in Q3 press release; commentary focused on liquidity, footprint optimization, and strategic options .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Adult-use transitions	Prepared for adult-use in Delaware; NJ 3rd store launched (Q1) ; Delaware adult-use started Aug 1 (Q2 preview)	Delaware adult-use began Aug 1; cited as quarterly highlight	Positive operational tailwind
Pricing/discounting	SKU rationalization and pricing architecture improvements (Q1) ; inventory obsolescence and reduction initiatives pressuring margins (Q2)	Sequential retail margin improvement from disciplined discounting; wholesale inventory reduction compressed margins	Mixed: retail improving, wholesale pressured
Wholesale dynamics	Q1 wholesale +3.5% QoQ to $16M (18% mix) ; Q2 wholesale +16% QoQ to $18.4M (21% mix)	Q3 wholesale -20% QoQ to $14.6M (18% mix)	Negative sequential trend
Footprint optimization/divestitures	Exited DC, closures in CO, CA sale; pursuing FL/IL divestitures; debt restructuring approval steps (Q1)	PA dispensaries sold; FL cultivation lease/equipment sold post-Q3; more divestitures possible	Continued simplification/liquidity focus
Liquidity/balance sheet	Cash $18.9M end Q1; debt maturity extension plan advanced (Q1)	Cash $17.8M end Q3; reiterated liquidity and balance sheet focus	Stable focus

References include earnings call event page and media links: , .

Management Commentary

CEO David Hart: “A highlight of the third quarter was the start of Adult Use in Delaware… Retail gross margin improved sequentially as a result of more disciplined discounting, but inventory reduction initiatives in wholesale contributed to sequential gross margin compression” .
On portfolio actions: “We… opened our sixth location in Ohio and [sold] three dispensaries in Pennsylvania… Subsequent to quarter close, we opened our seventh retail location in Ohio… and… finalization of our exit from the Florida market… gross proceeds of $11 million” .
Strategic posture: “We are focused on managing liquidity and proactively addressing the balance sheet… will continue to pursue additional measures to take costs out… which may include additional divestitures and other strategic alternatives” .

Q&A Highlights

Strategic alternatives: Board formed a special committee to review options including asset sales or mergers, with external advisers .
Delaware impact: Adult-use launch “significantly boosted revenue and adjusted EBITDA” in that market .
Drivers of revenue decline: Primarily price compression and the Pennsylvania retail sale .
Margin commentary: Retail margin improved; wholesale inventory reduction weighed on consolidated margins .

Estimates Context

Metric	Q3 2025 Consensus	Q3 2025 Actual
Revenue ($USD)	$86.50M*	$79.91M
Primary EPS ($USD)	-$0.04*	-$0.0452*
EBITDA ($USD)	$9.59M*	GAAP EBITDA $11.33M ; Adjusted EBITDA $3.04M

Interpretation:

Revenue was a miss versus consensus (driven by PA divestiture and price compression) .
Primary EPS modestly missed consensus; note company’s GAAP EPS is -$0.03, while SPGI “Primary EPS” shows -$0.0452*, reflecting definitional differences .
EBITDA comparisons are definition-sensitive: SPGI tracks “EBITDA”*, while company reports both GAAP EBITDA ($11.3M) and Adjusted EBITDA ($3.0M) .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Near-term: Stock likely reacts to revenue/margin pressure and lower Adjusted EBITDA; adult-use Delaware and Ohio expansion are positives but not yet offsetting wholesale weakness .
Liquidity actions provide cash inflows (PA, FL), supporting continued operations while the company explores further divestitures; watch subsequent asset sale announcements and debt metrics .
Mix shift matters: Wholesale volatility (down 20% QoQ) and price compression are key headwinds; trajectory of retail margins and SKU/pricing efforts is critical to near-term EBITDA stabilization .
Estimate resets: Consensus likely moves down on revenue and EPS after Q3 miss; monitor SPGI revisions and the cadence of adult-use ramp in Delaware and new store openings in Ohio .
Strategic optionality: Formation and activity of special committee could catalyze the stock via transactions; diligence on market-by-market profitability and asset quality is warranted .
Balance sheet focus: Equity negative; leverage remains elevated; continued execution on SG&A reductions, capex discipline, and cash generation is key .
Regulatory tailwinds: Adult-use transitions (e.g., Delaware) present incremental growth vectors; timing and magnitude by state will influence 2026 outlook .

Additional references and materials: Company Q3 press release and tables , Q2 and Q1 press releases , earnings call event link , investor news page .

Cannabist Co Holdings Inc. (CBSTF)·Q3 2025 Earnings Summary