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Trulieve Cannabis Corp. (TCNNF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue of $301.1M grew 5% YoY and 6% sequentially, with gross margin expanding to 62% from 54% a year ago; management said results “exceeded guidance” and highlighted industry-leading margins and record cash flow .
  • Adjusted EBITDA rose 27% YoY to $111.4M (37% margin) while adjusted EPS was $0.02; GAAP EPS (continuing ops) was $(0.26) given elevated SG&A that included ~$55M of campaign support .
  • 2025 outlook: Q1 revenue down low single digits sequentially; CFO >=$250M and capex up to $40M for 2025; year-end liquidity: $300M in cash and short-term investments; debt ~$480M at 7.9% .
  • Narrative/catalysts: continued margin strength from lower production costs and disciplined promotions, Ohio adult-use ramp, large Florida footprint positioning for potential adult-use; management noted absent campaign spend, Q4 CFFO and FCF would have been ~$86M and ~$43M, respectively, underscoring underlying cash generation .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 62% in Q4 (from 54% in Q4’23) and 60% for FY24, driven by cost reductions and mix discipline; CEO: “The team set the bar for operational excellence, delivering industry leading margins and record cash flow.”
  • Adjusted EBITDA scaled to $111.4M (37% margin) in Q4 and $420.2M (35% margin) for FY24, up ~30% YoY on higher revenue and margin improvements .
  • Retail KPIs were strong: retail revenue $285M (+4% YoY, +6% seq), traffic +13% YoY, 12.5M branded units sold, and 68% companywide retention in Q4 .

What Went Wrong

  • GAAP net loss of $(59.8)M in Q4 and $(155.1)M for FY24, reflecting high SG&A and tax-related items; Q4 GAAP EPS (continuing ops) $(0.26) .
  • SG&A elevated in Q4 to $157.9M (52.4% of revenue) including ~$54.8M of legislative campaign contributions; adjusted SG&A was $93.3M (31% of revenue) .
  • Free cash flow was $(11.8)M in Q4 as campaign support offset operating cash flow; management indicated underlying cash economics were stronger excluding this spend .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($M)287.0 303.4 284.3 301.1
Gross Margin %53.6% 59.9% 61.0% 62.1%
GAAP EPS – Continuing Ops (diluted)$(0.19) $(0.04) $(0.32) $(0.26)
Adjusted EPS (diluted)$(0.12) $0.00 $(0.06) $0.02
Adjusted EBITDA ($M)87.8 107.0 96.1 111.4
Adjusted EBITDA Margin %31% 35% 34% 37%

Notes and context:

  • Q4 YoY: Revenue +5%, gross margin +800 bps to 62%; Adjusted EBITDA +27% .
  • Q4 sequential: Revenue +6%; Adjusted EBITDA +16% .

Segment/KPI Highlights

KPIQ2 2024Q3 2024Q4 2024
Retail Revenue ($M)289 269 285
Retail Traffic Growth+3% seq +10% YoY, +1% seq +13% YoY, +4% seq
Branded Units Sold (M)>11.5 >11.5 >12.5
Customer Retention (Company / Medical)66% / 75% 65% / 74% 68% / 76%
Dispensary Count (Period End)206 220 229 current ops cited; FY-end 225

Cash Flow and Balance Sheet

  • Q4 CFFO $30.7M; FCF $(11.8)M; FY24 CFFO $271.5M; FY24 FCF $150.0M .
  • Cash and short-term investments ~$300M at year-end; total debt ~$480M at 7.9% interest .
  • Uncertain tax position liability $445M at 12/31/24 ($413M tied to 280E challenge); refunds received to date ~$114M of $174M claimed .

Vs. Estimates

  • S&P Global Wall Street consensus estimates were unavailable at time of analysis due to API limits; as a result, beat/miss vs. consensus is not provided. We will update upon availability.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025N/ADown low single digits vs Q4’24New
Cash Flow from OperationsFY 2025N/A (FY24 target ≥$250M achieved)≥$250MNew/level vs FY24 delivered
Capital ExpendituresFY 2025~$130M for FY24 (prior) Up to $40MLower vs. FY24 run-rate
Q4 Revenue (context)Q4 2024Up low single digits vs Q3’24 Delivered $301.1M (+6% seq)Achieved
Gross Margin (context)Q4 2024Comparable to YTD mid-50s+ 62% in Q4Above prior tone

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Margin Discipline & CostQ2: 60% GM; Q3: 61% GM; focus on cost reductions and promo discipline 62% GM; management attributes gains to lower production costs and disciplined promotions Improving
Retail KPIsQ2 retail rev $289M (+2% seq); Q3 $269M (+2% YoY) Q4 retail rev $285M (+6% seq), traffic +13% YoY, 12.5M units Strengthening volumes
Ohio Adult-UseLaunched adult-use at 3 stores on Aug 6 (Q2); continued in Q3 Continued Ohio adult-use; additional OH stores opened Ramp continues
Florida Adult-UseQ3 highlighted statewide vote; campaign spend $48M $55M in Q4 campaign support; management cites broad voter support and political tailwinds Investment continues
280E / Tax StrategyQ2/Q3 refunds to date ~$115M; UTP liability $333M→$384M Refunds ~$114M to date; UTP $445M; absent 280E, FY24 net income would have been positive Ongoing; higher accrual
Technology/CustomerQ2/Q3 referenced retail execution focus Call commentary on updated website and loyalty (per summaries) Enhancing CX
Product Innovation–Launch of “Onward” non-alcoholic THC beverages shipping to 36 states New category entry

Management Commentary

  • “The team set the bar for operational excellence, delivering industry leading margins and record cash flow.” – Kim Rivers, CEO .
  • “We exited the year with $300 million in cash and investments… Full year operating cash flow of $271 million exceeded our target of $250 million.” – Prepared remarks summary .
  • On Florida adult-use momentum and broader politics: “We believe the support of the majority of Floridians, including President Trump, sends a very strong signal that voters are ready for common sense cannabis reform.” – Prepared remarks .
  • On underlying cash flow excluding campaign spend: “Absent the campaign contributions, cash flow from operations would have been $86 million and free cash flow would have been $43 million” in Q4 – management on the call .

Q&A Highlights

  • Florida adult-use pathway and campaign investments: Management reiterated confidence in long-term opportunity and noted historical need for multiple ballot initiatives in other states; emphasized broad political support building in 2025 .
  • Tax strategy and 280E: Continued pursuit of refunds with $114M received to date; uncertain tax position at $445M; company continues to pay customary taxes excluding 280E pending resolution .
  • Outlook and spending cadence: Q1 revenue expected down low-single digits sequentially; 2025 capex up to $40M with a focus on core markets and selective growth .
  • Cash flow normalization: Excluding legislative campaign support, Q4 cash generation would have been materially higher, underscoring underlying profitability and cash conversion .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 (revenue, EPS, EBITDA) were unavailable due to request limits at time of analysis. As a result, we cannot definitively characterize beats/misses vs. Street for this quarter. We will update this section once S&P Global data can be retrieved.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceCommentary
RevenueQ1 2025–Down low single digits seqSeasonality post-holidays
CFFOFY 2025– (FY24 achieved ≥$250M)≥$250MEmphasizes sustained cash generation
CapexFY 2025~$130M FY24 (guide) Up to $40MMaterially lower capex intensity

Why Results Moved

  • Margin outperformance: Q4 gross margin of 62% reflects lower production costs and disciplined promotional activity, boosting adjusted EBITDA margin to 37% .
  • Retail throughput: Strong traffic and record units sold supported sequential revenue growth (+6% vs. Q3) despite broader industry price pressure .
  • SG&A/campaign spend: ~$54.8M in legislative campaign contributions flowed through SG&A, pressuring GAAP profitability and FCF in the quarter; adjusted metrics back out this impact .
  • Regulatory positioning: Ohio adult-use launch and continued Florida campaign investment are intended to capture outsized upside if catalysts materialize in 2025+ .

Additional Relevant Press Releases (Q4 period)

  • Q3 2024 results (Nov 5): Revenue $284.3M, GM 61%, Adj. EBITDA $96.1M; highlighted $48M campaign support in Q3 and Ohio adult-use launch .
  • Industry advocacy (Jan 16): National Cannabis Roundtable and US Cannabis Council combined; CEO Kim Rivers (Vice Chair of NCR) cited federal reform priorities (rescheduling, SAFE Banking, exchange listings) .

Key Takeaways for Investors

  • Underlying profitability and cash generation are robust: adjusted EBITDA margin reached 37% and FY24 CFFO was $271.5M; excluding campaign spend, Q4 cash generation would have been substantially higher .
  • Margin profile continues to improve on cost reductions and retail execution; this is a differentiator vs. peers in a still-challenging pricing environment .
  • 2025 playbook prioritizes cash, lower capex (≤$40M), and disciplined growth, offering potential for continued FCF while preserving flexibility for catalysts .
  • Regulatory optionality remains significant: Ohio adult-use ongoing; Florida remains the major upside swing factor; management’s advocacy leadership may be a non-financial edge .
  • Balance sheet provides maneuverability with ~$300M in liquidity; debt costs are known (7.9%), and capex moderation reduces funding needs .
  • Watch list: resolution/timing of 280E challenge, Florida adult-use path, and Q1 seasonal normalization; Street estimate checks pending data availability.

Citations:

  • Q4/FY24 8-K press release and exhibits (financials, reconciliations, investor deck): .
  • Q3 2024 8-K press release and investor deck: .
  • Q2 2024 8-K press release and financials: .
  • Earnings call transcript and prepared remarks excerpts: .
  • Industry/advocacy press release (Jan 16, 2025): .

Estimates note: S&P Global consensus estimates for Q4 2024 were unavailable at time of analysis; beat/miss vs. Street not shown. We will update when accessible.