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TH

TILT Holdings Inc. (TLLTF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue of $24.6M declined 34.4% YoY, but gross margin expanded to 21.5% (from 9.5%) as Jupiter’s commission-based model improved mix; Adjusted EBITDA positive at $0.5M vs $(1.6)M a year ago .
  • Net loss widened to $41.4M due to non-cash impairments and fair value measurements; operating loss also increased on impairment charges despite better gross margin .
  • Strategic pivot accelerating: definitive agreement to sell Massachusetts retail for $2M (approvals expected Q2 2025) and a path toward exiting remaining plant-touching operations to focus on Jupiter hardware and new proprietary solutions .
  • Management emphasized breaking down and rebuilding around Jupiter, adding new execs and suppliers to fill portfolio gaps; margin tailwinds stem from commission model and cost discipline, while hardware volumes remain pressured YoY .
  • Consensus estimates were unavailable via S&P Global at time of analysis; we could not measure beats/misses versus Street. Values were unavailable due to data access limits.

What Went Well and What Went Wrong

What Went Well

  • Gross margin improved materially to 21.5% in Q4 (10.0% in Q4’23; 14.1% in Q3’24), driven by the commission-based Jupiter model and cost controls .
  • Adjusted EBITDA turned positive in Q4 to $0.5M versus $(1.6)M in Q4’23, reflecting margin expansion and lower cash OpEx .
  • Strategic simplification with MA retail sale agreement ($2M) and ongoing exit of plant-touching assets to focus capital and management on Jupiter; CEO: “2024 was a transformative year… streamline our business and sharpen our focus on Jupiter” .

What Went Wrong

  • Revenue fell 34% YoY to $24.6M; management attributed the decline primarily to Jupiter hardware softness (and earlier periods cited supply chain delays and commission transition) .
  • Net loss increased to $41.4M in Q4 on substantial non-cash impairment and fair value items; operating loss of $(33.1)M includes $27.4M impairment .
  • Balance sheet pressure: notes payable rose to $72.1M at year-end; shareholders’ equity turned negative $(37.2)M (vs $62.4M at YE2023), underscoring need to complete divestitures and strengthen capitalization .

Financial Results

Quarterly trend (oldest → newest)

MetricQ1 2024Q2 2024Q3 2024Q4 2024
Revenue ($M)37.50 26.58 26.97 24.56
Gross Margin %17.9% 16.0% 14.1% 21.5%
Net Loss ($M)(9.65) (35.95) (12.65) (41.42)
Adjusted EBITDA ($M)0.04 (1.19) (1.57) 0.54

Q4 point-in-time comparison (oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Revenue ($M)37.54 26.97 24.56
Gross Margin %9.5% 14.1% 21.5%
Net Loss ($M)(21.95) (12.65) (41.42)
Adjusted EBITDA ($M)(1.64) (1.57) 0.54

Notes:

  • Management attributes Q4’24 margin expansion to the commission-based Jupiter model; the YoY revenue decline is primarily from Jupiter hardware .
  • The Q4 net loss widenings were driven by impairments and fair value items .

Segment/KPI snapshot

MetricQ3 2024Q4 2024YoY reference
Jupiter hardware revenue ($M)16.8 17.4 27.3 (Q4’23)
Total revenue ($M)26.97 24.56 37.54 (Q4’23)
Cash from ops ($M)2.0 (Q3’24) (0.5) (Q4’24) —
Cash, cash equivalents & restricted cash ($M, YE)—4.3 3.3 (YE2023)
Notes payable, net of discount ($M, YE)—72.1 52.2 (YE2023)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quantitative revenue/EPS/marginsFY2025None disclosedNone disclosedMaintained (no formal guide)
MA retail sale proceeds2025 timingNot previously specified$2M; regulatory approval expected Q2 2025New/updated timing
Strategic direction2025Reviewing strategic alternatives (Q3’24) Proceeding with retail divestiture; plan to exit plant-touching; focus on Jupiter Clarified path
EU medical device certification (Jupiter)2025—“Advanced certification… with expectations for the second quarter” (forward-looking) New forward-looking milestone

No explicit numerical guidance (revenue, margin, opex, tax, etc.) was provided in Q4 materials .

Earnings Call Themes & Trends

TopicQ-2 (Q2 2024)Q-1 (Q3 2024)Current (Q4 2024)Trend
Jupiter model/operationsTransition to asset-light, just-in-time; commission structure with Smoore to ease customer impact Working through new asset-light Jupiter model; shipping delays at supplier weighed on Q3 Commission model boosted margin; adding suppliers to fill portfolio gaps and ensure redundancy Improving margin trajectory; supply chain redundancy focus
Supply chain/logisticsTransition disrupted Jupiter volumes, but supports working capital and margin over time Higher logistics costs from delays; mix pressured margins Less prominent in Q4; highlight is commission model benefit Stabilizing
Plant-touching strategy—Strategic review of plant-touching announced MA retail sale agreement; plan to exit plant-touching and focus on Jupiter Accelerating exit
Regulatory/macroOptimistic about U.S. rescheduling and Ohio adult-use launch —EU medical device certification targeted in 2025; continued regulatory attention Incremental milestones
Product/portfolio——Portfolio gaps filled via additional suppliers; new proprietary hardware in development Broadened SKU/technology roadmap

Management Commentary

  • “2024 was a transformative year for TILT, as we took deliberate steps to streamline our business and sharpen our focus on Jupiter… This shift will allow us to unlock Jupiter’s full potential, expand our presence into new markets, and improve access to capital and financing opportunities.” – Tim Conder, CEO .
  • “At Jupiter, we are making critical organizational enhancements… The addition of experienced executives like Ken Yuan and Khalid Al Naser is key to this transformation as we enhance and expand our product portfolio and develop new proprietary hardware solutions…” .
  • “Our work is far from over, but we are making important progress, as we break down and rebuild… As we look ahead to 2025, we must remain focused and disciplined to achieve our strategic goals.” .

Q&A Highlights

  • Hardware supplier diversification: Management is adding suppliers to ensure the “right product” for each customer, fill portfolio gaps beyond CCELL, and build redundancy to meet scaling needs .
  • Plant-touching divestiture cadence: Retail in MA pending regulatory approvals in Q2 2025, with broader asset exit envisioned in 2025 as the company pivots fully to Jupiter .
  • Margin pathway: Commission-based sales for certain Jupiter customers shift freight/tariff costs and improve gross margin—reflected in Q4’s 21.5% GM .
  • Demand/orderbook: Despite YoY hardware revenue down, Q4 Jupiter revenue improved sequentially to $17.4M vs $16.8M in Q3, suggesting stabilization while portfolio expands .

Estimates Context

  • S&P Global/Capital IQ consensus for Q4 2024 (revenue and EPS) was unavailable at time of request due to data access limits. Accordingly, we cannot quantify beats/misses versus Wall Street this quarter. Where estimate comparisons would normally appear, data are marked unavailable.

Key Takeaways for Investors

  • Margin story improving faster than revenue: Commission-based Jupiter sales and cost focus expanded GM to 21.5% in Q4, with Adjusted EBITDA positive; watch for sustainability as volumes rebuild and supplier diversification progresses .
  • Strategic simplification is the core catalyst: MA retail divestiture (expected Q2 2025 approvals) and planned exit of plant-touching assets should concentrate capital on Jupiter, potentially improving returns and capital access .
  • Balance sheet requires action: YE notes payable rose to $72.1M and equity was negative; closing divestitures and any asset monetization/deleveraging steps are key near-term stock drivers .
  • Hardware normalization is key: Sequential Jupiter revenue growth (Q3→Q4) hints at stabilization; added suppliers and new proprietary hardware could lift mix and pricing over time .
  • Regulatory milestones could unlock demand: EU device certification and U.S. state-level dynamics (e.g., Ohio adult-use rollout referenced in prior quarters) present optionality for Jupiter’s TAM .
  • Trading setup: Near-term stock reaction catalysts include closing the MA sale, updates on additional plant-touching divestitures, and evidence of sustained Jupiter margin/volume improvements; lack of Street estimates obscures beat/miss narratives this quarter .

Sources

  • Q4 2024 8-K and press release, including full financial tables and non-GAAP reconciliations .
  • Q3 2024 8-K and press release .
  • Q2 2024 8-K and press release .
  • Q1 2024 8-K and press release .
  • Company IR press release (Q4/FY 2024 results) .
  • Earnings call transcript and highlights .
  • Conference call scheduling PR (context) .