Vireo Growth Inc. (VREOF)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue surged 264% year over year to $91.7M, driven by first full-quarter contributions from Utah/Nevada/Missouri acquisitions and organic growth; Adjusted EBITDA rose to $25.4M with a 27.7% margin .
• Versus S&P Global consensus, revenue was slightly below ($91.7M actual vs $94.8M est.; 1 estimate), while EPS had no published consensus; management flagged non‑cash inventory step-up impacts from M&A in GAAP gross margin . Values retrieved from S&P Global.*
• Balance sheet strengthened: $117.5M cash at quarter-end and refinancing expected to reduce annualized interest expense by ~$10M; integration largely complete with full synergy capture expected by year-end .
• Strategic catalysts: Minnesota adult-use launch in September; Schwazze note acquisition and restructuring support agreement that would result in Vireo owning the majority of Schwazze’s assets; litigation with Verano resolved for ~$10M value to Vireo .

What Went Well and What Went Wrong

• What Went Well
  • Material scale-up with accretive M&A: first full-quarter contributions from UT/NV/MO and organic growth across portfolio; Adjusted EBITDA margin expanded 230 bps YoY to 27.7% .
  • Balance sheet optionality: closed quarter with $117.5M cash; completed debt refinancing expected to cut annual interest by ~$10M, supporting continued acquisitive posture .
  • Management tone and strategy: “Performance was in line with our expectations and is beginning to demonstrate the impact of our efforts to transform the Company through accretive M&A” — CEO John Mazarakis .
• What Went Wrong
  • Modest miss vs revenue consensus amid integration noise: $91.7M actual vs $94.8M S&P estimate (single estimate); GAAP gross margin compressed to 40.8% due to non‑cash inventory valuation step-up related to acquisitions . Values retrieved from S&P Global.*
  • GAAP profitability remained negative: net loss of $(26.3)M and $(0.04) per share in Q3, influenced by interest expense, taxes, and non-cash items .
  • Some state-level softness persisted YoY in MD/NY retail; wholesale mix and non-cash COGS adjustments weighed on reported GAAP margins .

Financial Results

Headline financials – quarterly trend

Q3 comparisons – Actual vs prior periods and vs estimates

State-by-state revenue – Q3 2025

Key balance sheet / KPIs (as of 9/30/25)

Why results moved:

• Mix from acquired businesses plus non-cash GAAP purchase accounting (inventory step-up) pressured GAAP gross margin; excluding these, adjusted gross margin was 55.4% and improved 500 bps YoY .
• Interest expense and other non-operating items weighed on GAAP net income despite stronger operating scale .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategy: “Performance was in line with our expectations and is beginning to demonstrate the impact of our efforts to transform the Company through accretive M&A.” — CEO John Mazarakis .
• Integration: “The Company has already realized corporate overhead synergies, and full integration is expected to be completed by the end of the year.” .
• Minnesota: Adult-use launched with first sale on Sep. 16; all 8 MN dispensaries dispensing medical and adult-use products .
• Gross margin normalization: CFO noted GAAP gross margin was impacted by non-cash fair value step-up; adjusted gross margin was 55.4% .
• Capital & liquidity: “Closed Q3 with $117 million in cash… expects to remain acquisitive in a distressed environment” .

Q&A Highlights

• Minnesota outlook and capacity: Management expects solid MN growth; anticipates “substantial product supply once our Elk River facility is completed in Q1 next year” and to meet expectations as the market develops .
• Schwazze transaction path: RSA outlines UCC §9-610 public disposition with a credit bid and regulatory steps; would result in Vireo owning the majority of Schwazze assets (CO/NM) upon completion .
• Margin quality: CFO emphasized adjusted gross margin improvement YoY and the transitory nature of non-cash inventory step-up impacts .
• Balance sheet priorities: Company reiterated interest savings from refinancing and disciplined capital deployment .

Estimates Context

• Revenue: Q3 2025 actual $91.66M vs S&P Global consensus $94.79M (1 estimate).*
• EPS: No S&P Global consensus available.*

*Values retrieved from S&P Global.

Implication: Limited Street coverage (single revenue estimate, no EPS) suggests a nascent consensus; estimate models likely need to incorporate adult-use Minnesota ramp, the timing of inventory step-up normalization, refinancing savings, and the Schwazze transaction path.

Key Takeaways for Investors

• Operating scale and adjusted profitability are inflecting: Adjusted EBITDA nearly doubled sequentially and adjusted gross margins expanded YoY despite GAAP purchase accounting headwinds .
• Near-term catalysts: Minnesota adult-use expansion, year-end integration completion, and progress on Schwazze RSA execution and regulatory approvals .
• Balance sheet supports continued consolidation: $117.5M cash and ~$10M annual interest savings create capacity to pursue distressed opportunities while funding organic ramps .
• Watch GAAP vs adjusted spread: Non‑cash inventory step-up should fade over time, narrowing GAAP-to-adjusted margin gaps; model adjusted profitability as the better indicator of core earnings power .
• Legal overhang lifted: Verano settlement (~$10M value) removes litigation uncertainty and adds assets/cash .
• Estimate recalibration likely: Modest revenue shortfall vs a single estimate underscores evolving coverage; forward estimates should reflect MN adult-use growth, synergy capture and lower interest burden.*

Appendix: Additional context and sources

• Q3 2025 8‑K/Press release, including non‑GAAP reconciliations and state revenue tables .
• Q2 2025 results 8‑K and reconciliations .
• Q1 2025 10‑Q (baseline; pending M&A; litigation status) .
• Schwazze note acquisition and RSA (10/8, 10/14) .
• Verano litigation settlement (10/29; ~$10M value) .
• Earnings call transcript (third-party) .