Executive Summary

Q1 2025 revenue was $37.955M, essentially flat year over year, with diluted EPS at $(0.01) and GAAP net loss of $(5.420)M as wholesale strength offset retail softness and ramp costs in Illinois and Missouri .
Non-GAAP adjusted EBITDA declined to $2.564M (6.8% margin) versus $4.661M (12.3%) a year ago, driven by price compression and ramp costs; non-GAAP gross margin was 41.3% vs. 43.8% last year .
Management guided Q2 2025 revenue to increase high single digits sequentially on full-quarter Delaware (FSCC) consolidation and continued wholesale door adds, while retail remains soft .
Strategic highlights: wholesale mix reached 44% of sales as brands entered 70 new storefronts; Betty’s Eddies remained #1 edible in MA/MD/DE and rose to #5 in IL; Nature’s Heritage flower launched in IL post-quarter; “MycroDose by Nature’s Heritage” launched in MA in May .
S&P Global Wall Street consensus estimates for MRMD Q1 2025 were unavailable, so beats/misses versus Street cannot be determined (values unavailable via S&P Global).

What Went Well and What Went Wrong

What Went Well

Wholesale momentum: wholesale sales increased year over year and sequentially; wholesale mix reached 44% of revenue, supported by entry into 70 new storefronts and stronger brand penetration .
Brand performance: Betty’s Eddies remained top edible in MA, MD, DE; climbed to #5 in IL; Vibations #6 beverages and Bubby’s #2 baked in IL; strong penetration in MA (products in 71% of ~400 dispensaries) .
Strategic expansion: acquisition of First State Compassion Center closed Feb 28, consolidating DE vertically; Nature’s Heritage flower distribution commenced in IL on Apr 1; functional mushroom “MycroDose” launched in MA .

Management quote: “Wholesale sales now account for 44 percent of our revenue mix… we anticipate [this] will continue as we further leverage our brands as the primary growth engine” — Jon Levine, CEO .

What Went Wrong

Margin compression: non-GAAP gross margin fell to 41.3% from 43.8% YoY and 43.3% in Q4, due to price compression and ramp costs in IL cultivation and MO processing .
Retail softness: overall retail revenue declined 7% YoY amid pricing pressures, new competition in IL, and weaker consumer demand .
One-time bad debt expense: operating expenses rose to $15.989M, including a write-off of a non-trade receivable (vendor-related), which management characterized as one-time .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$40.591	$39.002	$37.955
GAAP Gross Margin (%)	41.3%	32.6%	39.9%
Non-GAAP Gross Margin (%)	42.6%	43.3%	41.3%
Net Loss ($USD Millions)	$(0.995)	$(8.201)	$(5.420)
Diluted EPS ($USD)	$(0.00)	$(0.02)	$(0.01)
Adjusted EBITDA ($USD Millions)	$4.676	$5.941	$2.564
Adjusted EBITDA Margin (%)	11.5%	15.2%	6.8%
GAAP Operating Expenses ($USD Millions)	$15.438	$14.114	$15.989

Segment/Channel Revenue Breakdown

Metric	Q3 2024	Q4 2024	Q1 2025
Product Sales - Retail ($USD Millions)	$23.384	$22.177	$20.779
Product Sales - Wholesale ($USD Millions)	$16.310	$16.212	$16.786
Other Revenue ($USD Millions)	$0.897	$0.613	$0.390
Wholesale Share of Product Revenue (%)	41.1%	42.2%	44.0%

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Wholesale Storefronts Added (quarter)	—	—	70
Brands in IL Stores (count)	—	~82% of dispensaries statewide distribution	>180 stores; +5% q/q, +46% y/y
Cash & Equivalents ($USD Millions)	$9.788	$7.282	$7.201
Cash from Operations ($USD Millions)	—	$6.785 (FY’24)	$1.293 (Q1)

Notes: Wholesale share of product revenue for Q1 2025 explicitly cited by management at 44% ; Q4/Q3 shares computed from product revenue components .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth (q/q)	Q2 2025	None disclosed	High single-digit increase vs Q1 2025	New guidance
Retail Trend	Q2 2025	None disclosed	Continued softness expected	New caution
DE Adult-Use Timing (operational)	2025	Not previously specified	First adult-use sales could start in 60–120 days; wholesale relationships established	New timing detail

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Wholesale Growth & Mix	Wholesale revenue grew ≥20% y/y; strong brand momentum . Wholesale product revenue $16.212M in Q4; mix ~42% .	Wholesale mix at 44%; y/y +16% and +4% q/q wholesale gross revenue; 70 new storefronts .	Strengthening share and penetration.
Retail Softness/Macro	Retail transactions grew y/y in Q3 despite consumer pressure .	Retail down 7% y/y; pricing pressure and IL competition; mitigation via pricing, loyalty, labor alignment .	Near-term headwind; mitigation actions underway.
Margin Dynamics	Q3 GAAP GM 41.3% (non-GAAP 42.6%); investment phase largely complete . Q4 non-GAAP GM 43.3% .	Non-GAAP GM 41.3% (down y/y and q/q) due to price compression and IL/MO ramp costs .	Compression near term; focus on efficiencies.
Illinois Expansion	Cultivation began; first harvest targeted for early 2025 .	Nature’s Heritage flower distribution started Apr 1; Betty’s #5; Vibations #6 beverages; Bubby’s #2 baked; >180 stores .	Growing footprint and rankings.
Missouri Ramp	Manufacturing commenced late 2024 .	Entry challenging due to reciprocity; ~50 storefronts; building doors and velocity .	Gradual ramp with market hurdles.
Delaware (FSCC)	DE acquisition approved Mar 3, 2025 .	Consolidation completed Feb 28; adult-use expected this year; 60–120 days potential timing; wholesale relationships in place .	Catalyst approaching; integration underway.
Innovation & R&D	—	Launching Microdose functional mushroom pill; Betty’s Caramelt Away chews; broader hemp exploration .	Active product innovation pipeline.
Tariffs/Supply Chain	—	Monitoring tariffs; exploring alternative suppliers; limited near-term impact .	Watchful stance; supply chain agility.

Management Commentary

“Wholesale sales now account for 44 percent of our revenue mix… an upward trend that we anticipate will continue as we further leverage our brands” — Jon Levine, CEO .
“Revenue… flat year-on-year… decreased sequentially 2.7%… wholesale gross revenue increased 16% y/y and 4% q/q… retail revenue down 7% y/y… adjusted gross margin 41.3%” — Mario Pinho, CFO .
“In Illinois, we sold our products into more than 180 stores… Betty’s is now #5… Vibations #6 beverages… Bubby’s #2 baked goods… in Massachusetts, products in 71% of nearly 400 dispensaries” — Ryan Crandall, CCO .
“We anticipate an increase in second quarter revenue… high single-digits compared to Q1… driven by full quarter of FSC revenues… continued wholesale door adds… continued softness in retail” — Mario Pinho, CFO .
“Delaware… timing… 60 to 120 days before we see the first rec store open” — Jon Levine, CEO .

Q&A Highlights

Q2 revenue guidance clarified as high single-digit sequential growth; drivers include full-quarter DE (FSCC) consolidation and promotional activity; retail expected to remain soft .
Bad debt expense was a one-time vendor-related receivable reserve, not trade receivables; company is pursuing recovery .
Delaware adult-use timing: potential 60–120 days; relationships with all current and future stores established to position wholesale .
Missouri challenges center on entrenched local reciprocity; brand-led penetration strategy expanding storefront count monthly .
Marketing spend shift toward localized initiatives; reduced programmatic marketing vs. prior year .
Ohio: active site search amid regulatory and financing constraints; aim to secure a location before year-end .

Estimates Context

S&P Global consensus (EPS, revenue, EBITDA, targets) for MRMD Q1 2025 was unavailable at the time of this analysis, so comparison to Street and beat/miss assessment cannot be made (values unavailable via S&P Global).
Investors should treat management’s Q2 guide (high single-digit q/q) as the near-term baseline until Street coverage deepens .

Key Takeaways for Investors

Near-term margin pressure reflects planned wholesale-led strategy and ramp costs; non-GAAP GM down to 41.3% while adjusted EBITDA margin fell to 6.8% — monitor mix, pricing, and ramp trajectory in IL/MO .
Wholesale brand strength remains the core growth engine: 44% mix, 70 new storefronts, strong category ranks in IL, and broad penetration in MA/MD — supports sustained door adds and velocity .
Delaware adult-use is a potential H2 2025 catalyst: FSCC integration complete; wholesale relationships pre-positioned; timing 60–120 days from Q1 call .
Innovation pipeline is active: IL launch of Nature’s Heritage flower and MA launch of Microdose functional mushroom pill underpin product-led growth and brand extension opportunities .
Retail softness persists amid competitive/pricing pressure and macro uncertainty; mitigation via pricing, loyalty, labor optimization; watch for regulatory tailwinds (MD events, MA delivery cost rules) .
Q2 guide implies sequential revenue acceleration; execution on DE and wholesale growth will be key to re-rating the narrative in absence of Street estimates .
Balance sheet steady with $7.201M cash and operating cash flow of $1.293M in Q1; disciplined cost management and SKU rationalization remain priorities .

MARIMED INC. (MRMD)·Q1 2025 Earnings Summary