Executive Summary

Q4 2024 net revenue was $74.4M (+0.3% QoQ) and gross margin expanded 140 bps to 50.2%; Adjusted EBITDA rose to $15.1M (20.3% margin), marking the tenth consecutive quarter of positive operating cash flow and sixth of positive free cash flow .
GAAP net loss widened to $30.2M due to a non‑cash impairment of $45.4M in Michigan; excluding this, Adjusted EBITDA improved QoQ, reflecting gross margin expansion and lower G&A .
Management guided Q1 2025 revenue down low-to-mid single digits (seasonality), gross margin ~50%, and FY2025 CapEx ~$10M; they also expect ≥$10M OpEx reductions in 2025 and plan to accelerate the $10M buyback post‑blackout, with debt maturities extended to late 2028 .
Growth catalysts: New Jersey leadership with potential acquisition of up to 7 social‑equity stores, Maryland capacity expansion with wholesale momentum, and optionality from Pennsylvania adult‑use prospects; disciplined M&A in Ohio at lower multiples is expected to add scale .

What Went Well and What Went Wrong

What Went Well

Maintained #1 market share in New Jersey every quarter of 2024, with top‑3 brand positions across categories and all three Apothecarium stores ranked top‑10 by units sold in Q4 .
Maryland delivered sequential revenue growth in all four quarters of 2024 and expanded gross margin from ~25% (2023 exit) to over 50% in Q4; wholesale and retail both grew sequentially in Q4 (+18% and +7%, respectively) .
Operating discipline: G&A fell $3.6M QoQ in Q4 (SBC down $2.3M; $1.3M OpEx cuts), with late‑2024 ERP implementation enabling ≥$10M OpEx reduction in 2025; adjusted EBITDA margin improved to 20.3% .

Quote: “The business performed ahead of our expectations in the fourth quarter… achieving our tenth consecutive quarter of positive operating cash flow and sixth consecutive quarter of positive free cash flow” — Jason Wild, Executive Chairman .

What Went Wrong

GAAP net loss widened to $30.2M in Q4 due to a $45.4M non‑cash impairment in Michigan, highlighting lingering market and asset challenges in that state .
Full‑year net revenue declined 3.3% YoY to $306.7M and gross margin fell to 48.9% (from 50.3%), reflecting price compression in New Jersey and Pennsylvania and retail competition in New Jersey .
Q3-to-Q4 retail softness remained, with CFO noting retail revenue down 2.5% sequentially in Q4; wholesale was +6.1% sequentially, but overall mix shifts can pressure margins and earnings if retail declines persist .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Net Revenue ($USD Millions)	$77.5	$74.2	$74.4
Gross Profit ($USD Millions)	$37.7	$36.2	$37.3
Gross Profit Margin %	48.6%	48.8%	50.2%
Adjusted EBITDA ($USD Millions)	$15.6	$13.7	$15.1
Adjusted EBITDA Margin %	20.2%	18.5%	20.3%
GAAP Net Loss – Continuing Ops ($USD Millions)	$(6.2)	$(21.4)	$(30.2)
Cash from Operations ($USD Millions)	$13.1	$1.8	$9.7
Free Cash Flow ($USD Millions)	$11.7	$1.5	$5.0
G&A ($USD Millions)	$24.1	$31.6	$28.0
EPS – Basic & Diluted ($USD)	$(0.03)	$(0.08)	N/A (not disclosed for Q4 in press release)

Notes:

Q4 GAAP net loss includes a non‑cash impairment of $45.4M, primarily Michigan .
Q4 sequential dynamics: retail revenue down 2.5% QoQ; wholesale up 6.1% QoQ .
Estimates comparison: S&P Global Wall Street consensus was unavailable at the time of analysis; therefore, beat/miss vs estimates cannot be determined.

Segment/KPI Highlights:

KPI	Detail
New Jersey Market Share	Maintained #1 market share all quarters of 2024; brands ranked top‑3 across categories; all three Apothecarium retail locations were top‑10 by Q4 units sold .
Maryland Run Rate	~$70M revenue run rate exiting Q4; wholesale +18% QoQ and retail +7% QoQ in Q4; gross margin >50% .
Cash & Equivalents	$27.0M at 12/31/2024 (incl. $0.6M restricted) .
Owned Real Estate	Approx. $150M of owned real estate; no sale‑leasebacks .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	None specific	Down low-to-mid single digits (seasonality)	Lower
Gross Margin %	Q1 2025	48–50% range (prior commentary)	~50%	Maintained
G&A/OpEx	FY 2025	Target ~30% SG&A excl. SBC (ongoing)	≥$10M reduction in operating expenses in 2025	Lower
CapEx	FY 2025	Not specified	~$10M, focused on Northeast growth/margins	New
Share Repurchase	Through Aug 2025	Up to $10M authorized (from Aug 2024)	Plan to “aggressively” implement post‑blackout	Accelerate
Debt Maturities	2028	Refinanced $140M, maturities extended	Vast majority extended to late 2028; no warrants/prepay penalties	Maintained/Confirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
New Jersey leadership & expansion	#1 market share; Boonton expansion decision; retail pressured by new doors; innovation/new SKUs	Maintained #1; share repurchase authorized; continued wholesale growth expected	#1 share confirmed; potential to acquire up to 7 social‑equity stores; broader portfolio/edibles expansion	Positive momentum
Maryland scaling	Capacity expansion; strong retail footprint; wholesale doubling YoY	Wholesale +26% QoQ; margin ~50%	Wholesale +18% QoQ and retail +7% QoQ; add 4 more grow rooms (harvest in Q2 2025)	Positive momentum
Pennsylvania adult‑use optionality	Expect adult use in 2025; large cultivation ready; doubling wholesale YoY	Healthy PA; wholesale/retail stable	Governor budget includes adult use; equal to all other state capacity combined; no additional CapEx needed; plans to turn on rooms as timing clarifies	Building optionality
Ohio M&A	Aim for Tier‑1 licenses; early entry	Signed definitive agreement to enter Ohio via dispensary	Discipline on valuations; expect acquisitions at lower multiples; one deal closing soon pending approval	Disciplined/Active
ERP/Operational efficiency	ERP implementation complete; SG&A leverage	ERP benefits highlighted	ERP as differentiator; ≥$10M OpEx reduction expected in 2025	Efficiency improving
Capital structure & liquidity	$140M term loan; maturities late 2028; working capital improved; going‑concern removed	Loan closed; share repurchase program	Reiterated debt terms; buyback to accelerate post‑blackout	Stable/Shareholder‑friendly
Regulatory/legal	DEA rescheduling supportive; Boies lawsuit progressing	DEA hearing noted	Monitoring Boies case; PA adult‑use momentum; federal legal risks reiterated	Constructive in PA; cautious federally

Management Commentary

“For 2024, we generated $307 million in revenue, $61 million in Adjusted EBITDA… $38 million in positive operating cash flow, and $29 million in free cash flow… achieving our tenth consecutive quarter of positive operating cash flow and sixth consecutive quarter of positive free cash flow.” — Jason Wild .
“Looking ahead into the first quarter of 2025, we expect revenue to be down low to mid‑single digits due to seasonality, gross margin to remain around 50% and further G&A expense reduction… we expect CapEx spending for 2025 to be approximately $10 million.” — Keith Stauffer .
“We believe that TerrAscend's targeted approach has put us in a differentiated position to invest in the best geographies and assets at attractive valuations… We expect to close on [Ohio] transaction in the coming weeks.” — Jason Wild .
“We have increased our [Maryland] market share position from #13… to #6… we are now just 1.9 points away from #2… expanding cultivation capacity by an additional 50% by investing in four additional grow rooms.” — Ziad Ghanem .

Q&A Highlights

M&A valuations and pace: Private valuations have reset lower (esp. Ohio); TerrAscend will be disciplined and favors structures with seller notes/earn‑outs; expects multiple attractive opportunities in NJ and OH .
Maryland competitive impact: New store openings likely benefit TerrAscend wholesale given many are non‑vertical/social‑equity operators; retail footprint is diversified geographically .
New Jersey verticality vs wholesale: Capacity expansion in Boonton supports both wholesale growth and increased verticality as acquisitions close; management will optimize mix dynamically .
Pennsylvania retail M&A: Dispensary pricing still high due to lack of license caps; company prefers medical multiples ahead of adult‑use clarity; wholesale optionality is significant and capacity already built .
Buyback: Management believes equity is undervalued vs real estate value and intends to implement buyback aggressively after blackout .

Estimates Context

S&P Global Wall Street consensus estimates (EPS, revenue, EBITDA, target price, recommendation) were unavailable at time of analysis due to access limitations. As a result, we cannot assess beat/miss versus Street for Q4 2024 or provide consensus trajectories. If you’d like, we can re‑query later and update the recap once access is restored.

Key Takeaways for Investors

Margin resilience and cash generation: Gross margin expanded to 50.2% and Adjusted EBITDA margin improved to 20.3%, with continued positive operating/free cash flow—supporting deleveraging and buybacks even amid retail headwinds .
Non‑cash impairment masks operating progress: The $45.4M impairment in Michigan drove GAAP loss; underlying margin expansion and cost cuts signal improving core profitability into 2025 .
New Jersey remains the anchor: #1 market share across categories and potential to add up to seven social‑equity stores could lift verticality, margins, and cash flow—expect incremental capacity to support growth .
Maryland momentum: Wholesale and retail both growing; capacity additions (four rooms) should sustain margin >50% and push share toward top‑2 in 2025 .
Pennsylvania optionality: Adult‑use legislation is a major upside catalyst; existing capacity equals combined output of other states and requires no additional CapEx .
Disciplined Ohio entry: Lower multiples and earn‑outs expected; integration synergies leveraging Michigan SG&A can improve Midwest profitability .
Near‑term trading set‑ups: Watch for buyback resumption post‑blackout, Ohio deal close, NJ retail M&A announcements, and PA bill progress—each is a potential stock‑moving catalyst .

TerrAscend Corp. (TSNDF)·Q4 2024 Earnings Summary