Executive Summary

Q4 2023 net revenue was $7.5M, down 19% year over year but up 21% sequential, driven by stronger Bulk Product and LFS revenues; gross margin for the full year was -26.3%, adversely impacted by exiting the cultivation facility .
Adjusted EBITDA was -$4.1M in Q4 (flat year over year; worse versus Q3) and net loss was $13.1M, reflecting significant non-GAAP adjustments and impairments across intangibles and cultivation assets during 2023 .
Management emphasized restructuring progress and exiting the cultivation facility post-quarter, with 2024 focused on third-party sourcing, expanded third-party brand distribution, and LFS growth; CFO appointment in February 2024 supports execution .
Wall Street consensus (S&P Global) estimates for LOWLF were unavailable; therefore, no beat/miss analysis versus street is possible. A data-mapping limitation prevents retrieval of EPS and revenue consensus for this ticker.
Near-term stock reaction catalysts: the cultivation exit and third-party sourcing strategy to stabilize supply/pricing, continued LFS volume growth, and re-engagement with third-party brands to broaden distribution .

What Went Well and What Went Wrong

What Went Well

LFS revenue rose sharply: +67% year over year and +102% quarter over quarter, with 116,762 lbs processed in Q4 2023 (wet weight), indicating operational momentum in services and processing .
Sequential improvement in Bulk Product revenue (+66% QoQ) and total net revenue (+21% QoQ), showing progress against a challenging backdrop .
Strategic repositioning: management exited the cultivation facility in January 2024 and established local grower relationships to secure supply, signaling a capital-light pivot and potential gross margin recovery over time .

Quote: “As we move through 2024, Lowell stands today as a restructured company… Our strategic decisions have now positioned us favorably and we expect to see a positive impact on the company in the quarters ahead.” — CEO Mark Ainsworth

What Went Wrong

Year-over-year revenue declines persisted: total Q4 revenue -19% YoY; CPG -19% YoY; Bulk -28% YoY; Out-of-State licensing -94% YoY; indicating demand and pricing headwinds in California .
Full-year gross margin was -26.3% and operating loss was -$17.6M, reflecting impaired asset base and cultivation exit costs; net loss for FY 2023 widened to -$37.3M .
Owned brands materially contracted: House Weed revenue fell ~82% in 2023 due to market purchasing trends and flower price instability; edible brands Moon and Original Pot Co. were largely out of market for over three quarters in 2023 .

Financial Results

Consolidated Metrics (Quarterly)

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD Millions)	$7.032	$6.212	$7.495
Gross Margin %	-4.8%	-7.1%	n/a
Net Income ($USD Millions)	-$0.073	-$20.170	-$13.059
Adjusted EBITDA ($USD Millions)	-$1.239	-$1.323	-$4.080
EPS ($USD)	-$0.01 (Basic)	-$1.66 (Basic)	n/a

Notes: Q4 EPS not disclosed in the Q4 press release; FY 2023 EPS was -$2.71 (Basic) .

Segment Revenue Breakdown ($USD Thousands)

Segment	Q2 2023	Q3 2023	Q4 2023
CPG Revenues	$4,438	$4,369	$4,582
Bulk Product	$2,263	$1,196	$1,984
Lowell Farm Services (LFS)	$94	$455	$918
Out-of-State Licensing	$237	$192	$11
Total	$7,032	$6,212	$7,495

KPIs and Operating Metrics

KPI	Q2 2023	Q3 2023	Q4 2023
Flower product (lbs)	6,730	5,727	5,367
Harvests (count)	36	39	40
Avg. turn time (days)	60	60	60
Avg. potency (%)	26.1%	27.1%	23%
LFS processed (wet lbs)	23,300	114,200	116,762
Avg. delivery drop value ($)	$3,883	$3,939	$3,809
Owned brands revenue ($USD Millions)	$3.5	$3.1	$3.7

Guidance Changes

No formal quantitative guidance (revenue, margins, OpEx, tax rate, segment guidance, dividends) was provided for Q4 2023/FY 2024 in the press release or filings .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	n/a	n/a	n/a
Gross Margin	FY 2024	n/a	n/a	n/a
OpEx	FY 2024	n/a	n/a	n/a
Tax Rate	FY 2024	n/a	n/a	n/a

Context: Subsequent events indicate strategic shifts (cultivation exit Jan 2024; CFO appointment Feb 2024) but no numeric guidance ranges .

Earnings Call Themes & Trends

Note: The Q4 2023 earnings call transcript was not available in the document set; call logistics were provided but no transcript could be retrieved .

Topic	Previous Mentions (Q2 2023)	Previous Mentions (Q3 2023)	Current Period (Q4 2023)	Trend
Cultivation & Yield	6,730 lbs; HpLV outbreak noted; potency 26.1%	5,727 lbs; potency 27.1%	5,367 lbs; potency down to 23%; post-quarter cultivation exit plan	Downward yields; strategic exit of cultivation
LFS Processing	23,300 wet lbs; minimal revenue	Record 114,200 wet lbs; revenue ramp	116,762 wet lbs; revenue +102% QoQ	Strong acceleration
Third-Party Brands & Distribution	Focus on new product lines; avg drop $3,883	Avg drop $3,939; Lowell still top pre-roll brand	Added 16 third-party brands; >650 dispensaries; avg drop $3,809	Expansion; lower average drop value
Out-of-State Licensing	$237k revenue; state-level brand rankings	$192k revenue	$11k revenue; steep YoY decline	Weakened materially
California Market Trends	Lowell top pre-roll brand; new 35s and infused products	Lowell remains top non-infused; $887k 35s	Market purchasing declines; flower price instability; House Weed down ~82% YoY	Adverse market; brand contraction

Management Commentary

“As we move through 2024, Lowell stands today as a restructured company… Our strategic decisions have now positioned us favorably and we expect to see a positive impact on the company in the quarters ahead.” — CEO Mark Ainsworth (Q4 release) .
“Having implemented cost-saving measures throughout the first and second quarters of 2023, we remain focused on an upward trajectory… efficiencies and new revenue streams, including third-party distribution.” — CEO Mark Ainsworth (Q2 release) .
“One year into our ambitious restructuring strategy, the decisions we’re making have enabled us to eliminate millions in debt, and secured rights to advance the Lowell brand, positioning ourselves for growth and success.” — Chairperson Ann Lawrence (Q3 release) .

Strategic messages:

Pivot to capital-light model via cultivation exit (Jan 2024) and third-party sourcing to stabilize supply and pricing .
Expansion of third-party brand strategy (16 brands; >650 dispensaries), re-engaging wholesale distribution to offset owned-brand volatility .
LFS as growth vector, evidenced by substantial increases in processing volumes and revenue .

Q&A Highlights

The Q4 2023 earnings call transcript was not found; no Q&A content is available for extraction. The company provided call details and webcast information but no transcript is accessible in the dataset .

Estimates Context

S&P Global consensus estimates for LOWLF could not be retrieved due to a missing CIQ mapping for the ticker; thus, EPS and revenue consensus for Q4 2023 were unavailable and no beat/miss determination can be made.
Implication: Models may need to reflect cultivation exit effects, impairment-driven resets, and LFS/third-party distribution mix shifts based on company-reported actuals .

Key Takeaways for Investors

The sequential revenue uptick (+21% QoQ) alongside LFS strength suggests the services pivot is working; monitoring LFS volumes and margins will be critical to near-term trajectory .
Cultivation exit and third-party sourcing reduce capital intensity and may improve gross margin profile after the FY 2023 drag (-26.3%); watch for cost of goods normalization and mix benefits .
Owned-brand revenue volatility (House Weed down ~82% YoY) underscores reliance on California market health; third-party brand expansion (>650 dispensaries) diversifies exposure and may stabilize topline .
Adjusted EBITDA deterioration in Q4 (-$4.1M) and ongoing net losses reflect transition costs and impairments; focus on operating leverage from distribution and LFS is key .
With no formal guidance and unavailable street estimates, trading will be headline/narrative-driven; near-term catalysts include post-cultivation execution, CFO-led discipline, and continued LFS momentum .
Risk factors: California pricing instability, demand variability, and regulatory complexity; improvements hinge on supply chain normalization and brand portfolio reactivation (edibles re-entering market in Q1 2024) .

Appendix: Additional Data Points and Disclosures

Full-year 2023 net loss: -$37.3M; operating loss -$17.6M; impairment expenses included $13.2M (Lowell Brand intangibles), $9.1M (cultivation long-lived assets), and $1.9M other intangibles .
Balance sheet at 12/31/2023: cash $2.311M; total liabilities $26.135M; stockholders’ equity $11.478M .
Adjusted EBITDA reconciliation for Q4 2023 shows debt repurchase charges and cultivation facility impairment significantly affecting non-GAAP adjustments .
Subsequent events: termination of the Zabala Road lease (cultivation facility) on Jan 17, 2024; CFO appointment on Feb 14, 2024 .

Lowell Farms Inc. (LOWLF)·Q4 2023 Earnings Summary