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MI

MARIMED INC. (MRMD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue rose sequentially to $40.8M, with adjusted EBITDA up to $5.1M and adjusted EBITDA margin at 12.6%; GAAP gross margin was 40.1% and GAAP net loss was $(2.9)M, reflecting continued margin pressure but improved profitability vs Q2 .
  • Wholesale and retail both grew sequentially; management flagged strength in Massachusetts and Illinois wholesale, adult-use Delaware, and higher retail transactions, while competition in Illinois’ Metropolis weighed on one location .
  • Strategic actions and catalysts: Pennsylvania MSA (distribution anticipated in 2026), New York licensing (anticipated 2026), hemp-derived THC product launch (Rhode Island distribution anticipated early 2026), and exit from Missouri to focus capital and execution .
  • Formal financial guidance remains discontinued (since Q4 2024); near-term revenue drivers center on brand expansion, adult-use ramps (Delaware), and operational efficiencies rather than numeric targets .
  • Stock-reaction catalysts: accelerating wholesale penetration, adult-use ramps, and multi-state brand licensing; watch 280E/tax cash outflows and competitive pricing dynamics that can pressure margins and EPS .

What Went Well and What Went Wrong

What Went Well

  • Sequential growth in revenue, adjusted EBITDA, and operating cash flow; CFO highlighted “disciplined cost management and operational efficiencies” driving improved profitability despite competition .
  • Wholesale expansion: strong Q3 wholesale sales in MA and IL; adult-use Delaware and broader retail transactions supported topline growth .
  • Brand reach: new agreements expand branded products to Maine (medical + adult-use), Pennsylvania (via MSA/licensing), and New York (licensing), advancing “Expand the Brand” strategy .

What Went Wrong

  • Margin compression vs prior year: GAAP gross margin at 40.1% (vs 41.3% YoY), with continued price pressures and competitive intensity .
  • Continued GAAP net loss: $(2.9)M in Q3; although non-GAAP net loss narrowed, profitability remains constrained by interest and tax provisions .
  • Illinois retail competition: management cited new competition impacting the Metropolis, IL location; retail softness remains a headwind across markets .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$40.6 $38.0 $39.6 $40.8
GAAP Gross Margin %41.3% 39.9% 40.5% 40.1%
Non-GAAP Gross Margin %42.6% 41.3% 41.9% 41.4%
Income from Operations ($USD Millions)$1.35 $(0.85) $1.14 $1.60
GAAP Net Income (Loss) ($USD Millions)$(0.99) $(5.42) $(1.27) $(2.94)
Diluted EPS ($USD)$(0.00) $(0.01) $(0.00) $(0.01)
Adjusted EBITDA ($USD Millions)$4.68 $2.56 $4.91 $5.14
Adjusted EBITDA Margin %11.5% 6.8% 12.4% 12.6%

Segment revenue breakdown (product sales):

Segment ($USD Thousands)Q3 2024Q1 2025Q2 2025Q3 2025
Product sales - retail$23,388 $20,779 $22,439 $22,573
Product sales - wholesale$16,310 $16,786 $17,131 $18,031
Other revenue$897 $390 $41 $160
Total revenue$40,595 $37,955 $39,611 $40,764

KPIs and operating metrics:

KPIQ3 2024Q1 2025Q2 2025Q3 2025
GAAP Gross Margin %41.3% 39.9% 40.5% 40.1%
Non-GAAP Gross Margin %42.6% 41.3% 41.9% 41.4%
Adjusted EBITDA ($USD Millions)$4.68 $2.56 $4.91 $5.14
Adjusted EBITDA Margin %11.5% 6.8% 12.4% 12.6%

Balance sheet watch (selected line items):

  • Income taxes payable increased to $28.1M at 9/30/2025 (vs $21.9M at 12/31/2024), highlighting 280E-related cash obligations .
  • Cash and equivalents at quarter-end: $6.6M; total debt (mortgages/notes current + noncurrent) ~$73.2M (current $2.3M + noncurrent $70.9M) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidanceOngoing (2025)Discontinued as of Q4 2024 callNo formal numeric guidanceMaintained policy
Near-term revenue outlook (Q2 2025)Q2 2025“High single-digit” q/q increase (Q1 call)Reported $39.6M vs $38.0M in Q1Achieved sequential increase; magnitude below “high-single-digit” phrasing
Adult-use Delaware ramp2025Anticipated commencement in 2025 (integration of FSCC)Cited “launch of adult-use sales in Delaware” as growth driverImplementation underway
Pennsylvania brand distribution2026N/ADistribution anticipated in 2026 (post regulatory approval, MSA/licensing)New market expansion plan
New York brand distribution2026N/ADistribution anticipated in 2026 (post facility build-out and approval)New market expansion plan
Hemp-derived THC product (Vibations)Early 2026N/ARhode Island distribution anticipated early 2026New category/cross-channel opportunity
Market footprint (Missouri)Q4 2025Under strategic reviewExited Missouri market (10/28)Portfolio rationalization

Earnings Call Themes & Trends

Note: Q3 2025 earnings call transcript was not available at time of analysis; themes below use Q1/Q2 calls and Q3 press release commentary.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Wholesale expansion and brand distributionQ1: Wholesale 44% of sales; penetration gains across IL/MA/MD; “Expand the Brand” focus . Q2: Continued sequential wholesale growth; MA execution; IL METRC migration behind .Strong Q3 wholesale; sequential growth in wholesale and retail; expansion into ME/PA/NY via licensing/MSA Strengthening wholesale-led growth
Adult-use DelawareQ1: Integration of FSCC; adult-use expected with timing 60–120 days; relationships across stores .CFO cites launch of adult-use sales as topline driver; contributing to sequential growth Ramping; revenue catalyst
New market entries (PA, NY)Q2: MSA in PA; licensing expansion; Maine licensing .PA MSA/licensing; NY licensing deal signed; both anticipate 2026 distribution Forward build; cross-state brand reach
Hemp-derived THC strategyQ1: Exploring hemp to add revenue; product formats under evaluation .Manufacturing/marketing agreements to launch hemp-derived THC (Vibations drink mix) with RI distribution anticipated early 2026 New revenue stream in 2026
Retail environment and competitionQ1: Retail softness; pricing pressures; ops efficiencies to mitigate .New competition impacted Metropolis, IL; retail transactions increased across network in Q3 Competitive but improving transactions
Regulatory/tax (280E)Q4 2024: Conservative GAAP stance; $21.9M tax payable at YE; industry wait-and-see .Taxes payable rose to $28.1M at 9/30/25; continued 280E cash impact Headwind persists

Management Commentary

  • CEO: “We continued to make progress on our plan to own top-selling, national consumer cannabis brands, while also delivering sequential increases in revenue, adjusted EBIDTA, and operating cash flow.”
  • CFO: “Wholesale expansion in Massachusetts and Illinois, the launch of adult-use sales in Delaware, and higher retail transactions across our network fueled topline growth… we improved profitability through disciplined cost management and operational efficiencies.”
  • Strategy: Distribution expansion to Maine, Pennsylvania, and New York through licensing/MSA agreements to widen brand reach; hemp-derived THC product to open additional channels in 2026 .

Q&A Highlights

  • Q3 2025 call transcript was not available. Based on Q1/Q4 calls, analysts focused on: Delaware adult-use timing and ramp economics ; Missouri market reciprocity challenges and store penetration ; operating expense discipline and marketing spend localization ; and forward guidance disclosures (company discontinued formal guidance) .
  • Management clarified Q2 outlook as quarter-over-quarter “high single-digit” growth from Q1 baseline , and reiterated brand-led expansion via licensing and selective M&A .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable for MRMD for Q3 2025 (Revenue, EPS, EBITDA, and estimate counts returned empty). As a result, comparisons vs consensus could not be made.
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential improvement with Q3 revenue at $40.8M and adjusted EBITDA at $5.1M underscores execution on wholesale-led growth and cost discipline; watch for continued momentum into Q4 tied to Delaware adult-use and wholesale door adds .
  • YoY margin compression persists (GAAP GM 40.1% vs 41.3% in Q3 2024) amid pricing pressure and competitive dynamics; non-GAAP margin actions (mix, efficiencies) are helping but not fully offsetting .
  • Brand distribution catalysts (PA MSA/licensing, NY licensing, Maine expansion) and hemp-derived THC planned for 2026 expand TAM beyond state cannabis constraints, creating medium-term growth optionality .
  • Retail competitiveness remains a watch point—management noted Illinois Metropolis pressure—yet retail transactions rose across the network, suggesting pricing/loyalty initiatives are gaining traction .
  • Tax cash headwinds (280E) remain material, with income taxes payable at $28.1M; liquidity management and operating cash flow generation are critical near-term .
  • Formal guidance remains discontinued; monitor qualitative milestones (adult-use launch progression, licensing/regulatory approvals, wholesale penetration) as near-term indicators .
  • Potential stock catalysts: confirmation of adult-use ramps in Delaware, execution on PA/NY licensing timelines, early performance of hemp-derived THC products, and continued sequential EBITDA improvements .

Appendix: Additional Data Points and Reconciliations

  • Non-GAAP reconciliations: Adjusted EBITDA bridges and non-GAAP gross margin provided; Q3 adjusted EBITDA $5.139M, margin 12.6%; non-GAAP gross margin 41.4% .
  • Operating cash flow YTD: $4.266M for nine months ended 9/30/2025 vs $7.198M in 2024, reflecting inventory and other asset changes alongside tax accruals .
  • Revenue composition Q3: retail $22.6M, wholesale $18.0M, other $0.16M, indicating wholesale’s growing contribution to mix .

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