Trulieve Cannabis Corp. (TCNNF)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue of $302.1M and gross margin of 60.6% were broadly in line with prior year and slightly ahead of consensus; EPS of $(0.07) (continuing operations) improved sequentially as operating expenses fell 13% vs Q1 .
• Versus Wall Street consensus (S&P Global), Trulieve delivered a small beat on revenue and EPS, but missed EBITDA: Revenue $302.1M vs $298.0M estimate; EPS $(0.04) adjusted vs $(0.053) estimate; EBITDA $95.5M vs $103.1M estimate; adjusted EBITDA of $110.6M was strong at 36.6% margin* .
• Management guided Q3 revenue down mid-single digits sequentially and reiterated 2025 cash from operations ≥$250M and capex ≤$40M, framing near-term seasonality but continued cash discipline .
• Key stock narrative drivers: ongoing 280E tax challenge (Q2 tax expense $54.7M; uncertain tax position liability $560M) and reform efforts; management indicated Q2 net income would be positive absent 280E, supporting margin quality but keeping legal/tax resolution central to the thesis .

What Went Well and What Went Wrong

• What Went Well

  • Adjusted EBITDA rose 3% YoY to $110.6M (37% margin) on resilient gross margin (61%) and disciplined SG&A; CEO emphasized “strong margins and cash flow” and platform flexibility .
  • Retail KPIs strengthened: traffic +8% YoY, branded units >12.5M (+9% YoY), customer retention 67% companywide; wholesale revenue +27% YoY and +11% sequentially, indicating healthy demand across channels .
  • Operating expenses fell to $130.3M (43% of revenue) from $149.9M in Q1, aiding sequential net loss improvement; non-recurring/campaign spend was much lower than Q4 and Q1 .

• What Went Wrong

  • GAAP net loss attributable to common shareholders of $(13.8)M and continuing ops EPS of $(0.07) remained negative; tax burden under 280E drove outsized tax expense ($54.7M), overshadowing operating profitability .
  • EBITDA underperformed consensus (non-GAAP EBITDA ~$95.5M vs $103.1M estimate*), suggesting mix/cost or external spend weighed vs Street models despite solid adjusted EBITDA .
  • Guidance for Q3 calls for mid-single-digit sequential revenue decline, highlighting seasonality and tempering near-term growth momentum .

Financial Results

Values retrieved from S&P Global.*

Segment mix and KPIs

Balance sheet and cash flow highlights (Q2 2025)

• Cash and restricted cash: $401.0M
• Total debt: $478M at 7.9% interest; private placement notes $368M due Oct 6, 2026
• CFO: Operating cash flow $86.1M; Free cash flow $74.5M (Non-GAAP)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The team has made tremendous progress on our 2025 plan, focusing on customers, distribution, branded products and reform… Trulieve is uniquely positioned as an industry leader.” – Kim Rivers, CEO .
• “Retail revenue of $284 million… Traffic up 8% versus last year… Wholesale revenue increased 27%… Modern Flower and Roll One were 50% of units.” – Investor presentation .
• On reform and allocation: management will continue to allocate time and financial resources to advocacy; sees opportunities for M&A as sector pressures rise into 2026 and beyond .

Q&A Highlights

• Capital allocation and reform: continued spend to “push from the front” on meaningful reform while remaining poised to capitalize when it occurs .
• M&A landscape: early-stage processes observed; expects more opportunities as operators face maturities and shed assets; actively reviewing .
• Texas: confirmed application; consistent with strategy of expansion across South/Southeast medical markets .
• Pennsylvania: confidence adult-use will be enacted “in the near future”; strong brand performance in PA .
• Near-term outlook: seasonality underpinning Q3 mid-single-digit sequential revenue decline .

Estimates Context

• Q2 2025 vs consensus (S&P Global): Revenue beat (+$4.1M), EPS beat (+$0.013), EBITDA miss (−$7.6M); adjusted EBITDA remained robust at 36.6% margin, suggesting core operations healthy despite tax/other headwinds* .
• Implications: Street may lift revenue/EPS near-term modestly but trim EBITDA assumptions to reflect mix and non-GAAP to GAAP mapping; Q3 seasonal decline likely triggers estimate cuts for Q3 topline while full-year cash flow outlook is maintained .
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Margin quality and cash conversion remain the strengths: 60–61% gross margin, adjusted EBITDA ~37%, Q2 OCF $86M and FCF $75M (Non-GAAP), supporting liquidity despite GAAP losses .
• The 280E tax overhang is the primary drag on GAAP earnings; management asserts profitability absent 280E, making regulatory resolution a key catalyst .
• Near-term topline: expect Q3 sequential decline mid-single digits; plan for seasonality and watch retail/wholesale mix resilience .
• Brand and distribution execution: Modern Flower/Roll One mix, traffic/retention, and beverage expansion (Onward/Upward) indicate product-led growth and category breadth .
• Balance sheet and maturities: $401M cash and $478M debt at 7.9% with $368M notes due Oct 2026; runway appears adequate for organic investment and select M&A .
• Corporate development optionality: management is actively evaluating M&A and new markets (e.g., Texas), with potential for accretive scale if reform/timing align .
• Trading lens: stock likely reacts to reform headlines and tax case progress; near-term sentiment hinges on Q3 trajectory and visibility into 280E resolution; medium-term thesis centers on durable margins, cash generation, and brand scale .

Citations: Press release and exhibits ; Prior quarters ; . Earnings call references: .