Executive Summary

Q2 2025 revenue of $33.5M grew 21% year over year and ~4% sequentially; gross margin expanded to 43% from 23% YoY, with Adjusted EBITDA positive at $1.7M . International and Israel demand plus GrowCo consolidation drove mix/price and margin gains .
EPS missed consensus as a large unrealized FX loss on USD cash held in Canada drove a net loss of $(38.5)M (diluted EPS $(0.10)); management cited CAD strength vs USD as the driver .
S&P Global consensus had Q2 revenue at ~$33.53M and EPS at ~$(0.02); actual revenue was roughly in-line while EPS was a larger loss than expected* [GetEstimates].
Strategic highlights: record international/Israel revenue; Spinach maintained strong share in Canada despite flower supply constraints; GrowCo expansion complete with sales expected to begin in Fall 2025, positioning 2H25 acceleration .
Balance sheet remains a differentiator with $834M cash and short-term investments and no debt, offering flexibility for global expansion and brand investments .

What Went Well and What Went Wrong

What Went Well

Revenue growth and margin expansion: Net revenue up 21% YoY to $33.5M; gross margin rose to 43% (from 23% YoY); Adjusted EBITDA improved to $1.7M .
International momentum: Highest-ever international and Israel revenue; PEACE NATURALS retained #1 brand in Israel and expanded to Australia, Malta, and (post quarter-end) Switzerland .
Brand strength in Canada despite constraints: Spinach #2 brand (4.7% share), #3 in flower (4.9%); vapes #4 overall (6.5%) and #2 in cartridges (8.4%); gummies held ~19.9% share; Lord Jones #3 chocolate (10.2%) and #1 in hash-infused pre-rolls (28.5%) .
CEO commentary: “record sales from Cronos Israel and continued momentum in international markets” and “our debt-free balance sheet and $834 million in cash…provide superior flexibility to execute our strategy” .

What Went Wrong

FX-driven earnings pressure: Net loss widened to $(38.5)M due to a $(39.5)M unrealized FX loss on USD cash/short-term investments held in Canada as CAD strengthened vs USD; overshadowed operating improvements .
Canada softness/sequencing: Canada revenue declined 3% YoY in Q2 ($19.15M vs $19.84M) amid ongoing flower supply constraints that capped growth .
Limited external estimate coverage: Only one estimate for Q2 (EPS/Revenue), implying higher uncertainty; actual EPS loss was larger than expected* [GetEstimates].

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$30.301	$32.262	$33.455
Gross Margin (%)	36%	43%	43%
Adjusted Gross Margin (%)	30%	44%	43%
Diluted EPS ($)	$0.11	$0.02	$(0.10)
Adjusted EBITDA ($M)	$(7.203)	$2.289	$1.688

Segment/product breakdown (Revenue, $M)

Product	Q1 2025	Q2 2025
Cannabis Flower	$23.344	$25.025
Cannabis Extracts	$8.608	$8.360
Other	$0.310	$0.070

Geographic breakdown (Revenue, $M)

Geography	Q1 2025	Q2 2025
Canada	$20.130	$19.150
Israel	$9.229	$9.376
Other Countries	$2.903	$4.929

KPIs and operating metrics

KPI	Q2 2025	Source
Cash & Equivalents	$794.4M	8-K press release
Short-term Investments	$40.0M	8-K press release
Total Cash + ST Investments	$834.4M	8-K press release
Adjusted EBITDA	$1.688M	8-K press release
Gross Margin	43%	8-K press release
Cronos GrowCo revenue contribution	$2.211M	8-K press release
Capex (Q2 / YTD)	$3.838M / $19.194M	8-K press release
Spinach market shares (Canada): Brand 4.7%, Flower 4.9%, Vape 6.5% (Cartridges 8.4%), Gummies 19.9%	Q2 release
Lord Jones shares: Chocolate 10.2%, Hash-infused pre-rolls 28.5%	Q2 release
PEACE NATURALS Israel position	#1 brand; record revenue/volume	Q2 release

Notes: Net loss was principally driven by $(39.5)M FX loss on USD cash/ST investments held in Canada as CAD appreciated .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expenses	FY 2025	Flat YoY, with quarterly OpEx higher than Q1 but flat vs 2024	“OpEx to be relatively flat on a year-over-year basis for 2025”	Maintained
GrowCo Expansion Timing	2H 2025	First harvests & sales in H2 2025	Sales from expansion expected in Fall 2025	Narrowed timing window
Capital Allocation: Share Repurchase	May 2025–May 2026	$50M program authorized (up to 5% shares)	Program remains in place (no new update in Q2 filings)	Maintained

No formal revenue/EPS/margin quantitative guidance ranges provided.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Supply constraints & GrowCo ramp	Spinach demand > supply; GrowCo expansion to enable growth; H2’25 first sales	Expansion complete; sales expected Fall 2025; constraints persist near term	Improving from 2H’25
International expansion	Germany/U.K. traction; Israel record volumes; borderless products strategy	Record Israel & international revenue; launches in Australia, Malta, and Switzerland (post-Q2)	Strengthening
Regulatory/legal (Israel)	Proposed anti-dumping duty vetoed by Finance Minister; risk persisted	Ministry of Justice validated veto; duty blocked; company “pleased”	Risk reduced
Product performance (Canada)	Spinach #1 brand FY’24; strong edibles/vapes	Spinach retains strong shares; vapes/gummies leadership; Lord Jones leadership in niches	Stable leadership
OpEx/margins	Adjusted GM ~44% in Q1; OpEx discipline; FY OpEx flat YoY	GM 43%; reiterates FY OpEx flat YoY; adjusted EBITDA positive	Sustained
Balance sheet/capital allocation	$859M cash YE’24; positive FCF in FY’24	$834M cash+ST investments; $18.5M investment in High Tide in July	Strong/liquid

Management Commentary

Strategic focus: “Our strength abroad has been instrumental in driving meaningful margin improvement, underscoring the benefits of our global strategy…Our debt-free balance sheet and $834 million in cash and cash equivalents and short-term investments provide superior flexibility to execute our strategy” – Mike Gorenstein, CEO .
Brand leadership in Canada: “Spinach…#2 cannabis brand in Canada (4.7% share)…#3 in flower (4.9%) despite ongoing supply constraints…vape #4 (6.5%) and #2 in cartridges (8.4%); gummies maintained ~20% share” – Prepared remarks .
Financial posture and outlook: “Adjusted EBITDA in the second quarter was $1.7M…we expect OpEx to be relatively flat on a year-over-year basis for 2025” – CFO Anna Shlimak .
Israel update: “We are incredibly pleased with the decision to veto the proposed duty” – on anti-dumping duty being blocked; PEACE NATURALS remained #1 and posted record results .

Q&A Highlights

Q2 2025: No analyst questions were recorded during the call .
Prior quarter context (Q1 2025): Topics included flower shortages (driven by “shortage of good product” industry-wide) and margin trajectory (GrowCo expansion expected to be neutral-to-accretive to margins over time) .

Estimates Context

Q2 2025 vs S&P Global consensus:

Metric	Consensus	Actual	Δ	Notes
Revenue ($M)	$33.53*	$33.46	$(0.07)	In-line/slight miss*
Primary EPS ($)	$(0.0205)*	$(0.10)	$(0.0795)	Larger loss than expected*
EBITDA ($M)	$(3.16)*	$4.65*	+$7.81	S&P EBITDA definition may differ from company Adjusted EBITDA ($1.69M) *

Coverage note: Only 1 estimate in S&P for Q2 EPS/Revenue, implying limited external coverage and higher uncertainty*.

Forward consensus (select):

Q3 2025 Revenue est: ~$36.84M*; EPS est: ~$0.00*; EBITDA est: ~$5.53M*
Q4 2025 Revenue est: ~$41.26M*; EPS est: ~$0.01*; EBITDA est: ~$3.91M*
Values retrieved from S&P Global.

Implication: Revenue roughly in-line should limit top-line estimate changes; EPS miss driven by FX could lead analysts to adjust FX assumptions rather than core operating estimates.

Key Takeaways for Investors

Core operations improving: 21% YoY revenue growth, 43% gross margin, and positive Adjusted EBITDA signal fundamental progress driven by international mix and GrowCo consolidation .
EPS pressure was non-operational: Large unrealized FX losses on USD cash (CAD strength) drove the EPS miss; core profitability metrics improved .
Near-term catalyst: GrowCo expansion sales expected to begin in Fall 2025; resolution of Canadian supply constraints should support 2H25 acceleration, particularly in flower .
International optionality: Record Israel results and new country launches (Australia, Malta, Switzerland) broaden revenue base and reduce excise burden; monitor Germany/UK ramp .
Brand leadership durable: Spinach and Lord Jones continued category leadership provides pricing power and shelf presence; watch continued innovation in vapes, edibles, and premium pre-rolls .
Balance sheet strength: $834M cash/ST investments and no debt enable sustained investment and opportunistic capital deployment (e.g., High Tide convertible loan) .
Watch FX and estimates: Limited external estimate coverage means prints can appear more volatile; expect EPS variability with FX while margins/Adjusted EBITDA track operational progress* [GetEstimates].

Appendix: Additional Detail

Selected P&L drivers and commentary

YoY revenue growth primarily from higher cannabis flower sales in Israel and other countries (no excise) and higher extracts in Canada; GrowCo added $2.2M in Q2 .
Gross profit up $8.2M YoY to $14.5M; drivers included GrowCo consolidation, mix shift to international, higher volumes, and production efficiencies .
Net loss increased due to $(39.5)M FX loss on USD-denominated cash/ST investments held in Canada, partially offset by higher gross profit and lower OpEx .
Operating expenses down 9% YoY to $19.8M; efficiency and lower G&A contributed to improvement .

Capital and cash flow

Cash from operations roughly breakeven in H1 ($0.7M provided), with higher capex ($19.1M) and share repurchase/non-controlling interest distributions driving cash use; ending cash $794.4M .
Q2 capex $3.8M; YTD $19.2M, predominantly for GrowCo and operational enhancements .

Regulatory and legal

Israel anti-dumping duty veto upheld in July; company continues to advocate for equitable market structure; reduces risk to Israel imports .

Investor relations events and releases (Q2 window)

Q2 earnings call announcement (July 25) .
Switzerland medical launch (July 2) .
AGM results (June 23) .
TD Cowen conference participation (June 2) .

Values retrieved from S&P Global where marked with *.

Cronos Group Inc. (CRON)·Q2 2025 Earnings Summary