Executive Summary

Q4 revenue $30.3M (+27% y/y) but down q/q from $34.3M; gross margin expanded to 36% aided by a $1.8M inventory step‑up adjustment reversal; diluted EPS $0.11 vs $(0.12) a year ago .
Adjusted EBITDA remained negative at $(7.2)M, an improvement y/y; 2024 OpEx savings reached $8.7M (at the high end of the $5–$10M target) and management expects 2025 OpEx to remain flat even with GrowCo consolidation .
Brand leadership continued: Spinach ended 2024 as Canada’s #1 cannabis brand; SOURZ gummies hit 23% share; PEACE NATURALS ended Q4 as Israel’s #1 flower brand (24% share) .
Liquidity remains a differentiator with $858.8M cash and cash equivalents at year‑end; free cash flow turned positive for FY 2024, supporting investment capacity ahead of GrowCo expansion harvests in 2H25 .
Street consensus (S&P Global) for Q4 was unavailable at time of analysis; we therefore cannot formally classify beats/misses this quarter (see Estimates Context) [GetEstimates error noted].

What Went Well and What Went Wrong

What Went Well

Revenue grew 27% y/y to $30.3M on stronger flower and extract sales in Canada and higher flower sales in Israel/other markets; GrowCo contributed $2.1M of cannabis flower sales in Q4 .
Margin recovery: gross margin reached 36% (vs 8% LY) and adjusted gross margin 30% as pricing/mix and cost improvements took hold; Q4 also benefited from a $1.8M purchase accounting adjustment tied to the GrowCo inventory step‑up .
Operating discipline: 2024 OpEx savings of $8.7M achieved the high end of guidance (ex‑GrowCo), with management guiding 2025 OpEx flat despite adding GrowCo OpEx .
“We set ambitious goals to deliver robust growth, improve margins, and achieve operational excellence… Cronos has not only met but exceeded these objectives” – CEO Mike Gorenstein .

What Went Wrong

Sequential top‑line deceleration: revenue declined to $30.3M in Q4 from a record $34.3M in Q3, reflecting flower dynamics and inventory step‑up effects earlier in H2 .
Profitability still negative on an adjusted basis: Q4 Adjusted EBITDA was $(7.2)M, despite y/y improvement; full‑year Adjusted EBITDA was $(34.9)M .
Supply constraints temper near‑term flower growth: management does not expect Spinach flower growth to re‑accelerate until 2H25, when GrowCo expansion supply comes online .
Net income benefited from non‑operating items—Q4 included a $45.5M FX gain—which inflates EPS vs underlying operating performance .

Financial Results

GAAP and Non‑GAAP Summary (Quarterly)

Metric (USD)	Q2 2024	Q3 2024	Q4 2024
Net Revenue ($M)	$27.8	$34.3	$30.3
Gross Profit ($M)	$6.3	$3.6	$10.8
Gross Margin (%)	23%	11%	36%
Adjusted EBITDA ($M)	$(11.1)	$(6.0)	$(7.2)
Net Income ($M) (cont. ops)	$(8.8)	$7.3	$43.9
Diluted EPS (cont. ops)	$(0.02)	$0.02	$0.11
Cash & Cash Equivalents ($M)	$848.2	$862.0	$858.8

Notes: Q4 gross margin benefited from a $1.8M inventory step‑up adjustment reversal; Adjusted EBITDA excludes non‑cash and non‑recurring items per company definitions .

Revenue Mix – Product (Q3 vs Q4)

Product	Q3 2024 ($M)	Q4 2024 ($M)
Cannabis Flower	$26.3	$23.4
Cannabis Extracts	$7.8	$6.6
Other	$0.15	$0.32
Total	$34.3	$30.3

Revenue Mix – Geography (Q3 vs Q4)

Geography	Q3 2024 ($M)	Q4 2024 ($M)
Canada	$24.1	$19.7
Israel	$7.3	$7.8
Other Countries	$2.9	$2.8
Total	$34.3	$30.3

KPIs and Brand Metrics (Q4)

SOURZ by Spinach gummies: 23% share; 5 of top 10 edible SKUs .
Spinach flower: #1 flower brand in Canada with 5.7% share; Spinach vapes #4 brand with 5.9% share; Spinach pre‑rolls #7 with 2.5% share .
PEACE NATURALS Israel: #1 flower brand (24% share); #4 oils brand (9% share) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expense Savings (standalone)	FY 2024	Reduce OpEx by $5–$10M (reiterated in Q2/Q3)	Achieved $8.7M savings in FY 2024 (ex‑GrowCo)	Achieved at high end
OpEx Outlook	FY 2025	N/A	Expect OpEx to remain flat in 2025 even with GrowCo OpEx	New qualitative guide
GrowCo Expansion Timeline	2025	N/A	Construction completes Q2’25; first harvests/sales 2H’25	New timeline
GrowCo Offtake Framework	Post‑expansion	N/A	Option to purchase up to 80% of production pre‑expansion; 70% post‑expansion	New supply optionality
Capex	2025	N/A	2025 Capex includes GrowCo expansion spend	Awareness item

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
GrowCo expansion & supply	Announced ~$51M (C$70M) facility expansion; will consolidate in Q3; supply agreement (80%/70%)	Consolidation began Q3; $7.1M inventory step‑up impacted margins	Construction finish Q2’25; first harvest/sales 2H’25; OpEx flat despite inclusion	Execution progressing; supply catalyst 2H’25
Canada brand performance	Spinach #1 flower (6.2% share); SOURZ momentum; vapes strong	Spinach becomes #1 cannabis brand in Canada; category leadership across edibles/flower	Spinach ends 2024 #1; SOURZ 23% gummies share; vapes #4; pre‑rolls #7	Sustained leadership
International (Germany/UK)	Initial traction; first UK shipments; Germany growing	Strong traction with GMO/Wedding Cake genetics; GrowCo to enable growth	Focus on market penetration in 2025; confidence in share gains	Building momentum
Israel dynamics	New strains launched; strong performance despite conflict	Record volumes Q3; competitive market & patient trends	PEACE NATURALS #1 flower (24%); ongoing macro/regulatory risks acknowledged	Strong share; macro risk persists
OpEx/Cost discipline	Reiterated $5–$10M savings target	Reiterated cost focus; Adjusted EBITDA improving	Achieved $8.7M savings; 2025 OpEx flat guide	Operating leverage improving
Cash & FCF	Cash $848M; net change not expected positive in 2024 given GrowCo investment	Cash $862M; FCF trending better	Cash $859M; FY24 FCF $5.7M; operating CF +$18.8M	Balance sheet remains a strength

Management Commentary

“Cronos has not only met but exceeded these objectives, as evidenced by our strong 2024 results… Our strategic investments, such as Cronos GrowCo, have enhanced our cultivation capabilities… while our R&D breakthroughs have set new industry standards.” – Mike Gorenstein, CEO .
“Gross profit was positively impacted by $1.8M in the quarter in connection with the finalization of the purchase accounting for the Cronos GrowCo Transaction…” – Company press release .
“Going into 2025, even with the addition of GrowCo’s OpEx, we expect our OpEx to remain flat.” – CFO James Holm .
“PEACE NATURALS ended the year as the #1 flower brand in Israel with 24% market share… we’ve made significant progress in Germany and the U.K.” – CEO .

Q&A Highlights

The Q&A section of the transcript was not fully available due to document retrieval issues; however, management clarified in prepared remarks that 2025 OpEx is expected to remain flat, GrowCo construction should complete in Q2’25 with first harvests/sales in 2H’25, and Capex will reflect expansion spending in 2025 .

Estimates Context

S&P Global consensus estimates for Q4 2024 revenue/EPS were unavailable at the time of this analysis due to a data access error. As a result, we cannot provide definitive beat/miss assessments for the quarter (we attempted to retrieve “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and related estimate counts but the request failed due to a daily limit error).

Key Takeaways for Investors

Mix and margin: Y/Y revenue growth and margin expansion reflect category leadership and cost improvements, though Q4 gross margin included a one‑time $1.8M purchase accounting adjustment benefit; underlying adjusted gross margin was 30% .
Profitability path: Adjusted EBITDA is improving but remains negative; 2025 OpEx flat guidance provides visibility into operating leverage as GrowCo supply ramps in 2H’25 .
Near‑term cadence: Sequential revenue softness in Q4 vs Q3 and management’s comment that Spinach flower growth likely pauses until 2H’25 suggest a 1H’25 digestion period before expansion‑driven reacceleration .
International optionality: Strong Israel share, and growing traction in Germany/UK set up diversified growth, though macro/regulatory risks in Israel remain a watch item .
Liquidity as a catalyst: With ~$859M cash and positive FY24 free cash flow, Cronos has ample capacity to fund expansion and navigate volatility; interest income and FX can swing reported earnings .
Monitoring items: Inventory step‑up effects (now reversing), GrowCo construction/harvest timing, category pricing/mix in Canada, and Israel market developments will shape quarterly volatility .

Appendix: Additional Data Points

Q4 product/geography contributions detailed above; Canada remained the largest market while Israel and Other continued to grow y/y .
Full‑year 2024: Net revenue $117.6M (+35% y/y); gross profit $25.2M; Adjusted EBITDA $(34.9)M; cash & cash equivalents $858.8M at year‑end .

All figures are as reported by Cronos in its Form 8‑K and press release for Q4/FY 2024 and the Q4 2024 earnings call transcript. Citations are provided inline.

Cronos Group Inc. (CRON)·Q4 2024 Earnings Summary