Executive Summary

Q2 revenue was $202.3M, down 3.6% q/q and 9.0% y/y, and missed S&P Global consensus of $210.9M by ~4.1%* . Gross margin expanded to 56% from 47% in Q1; Adjusted EBITDA was $66.2M (33% margin), up from $54.4M (26%) in Q1 .
EPS came in at -$0.0585 vs consensus -$0.0498* (miss), and revenue trajectory reflected price compression, competition, and wholesale impacts from AR strategy* .
Management emphasized efficiencies (cultivation yields, automation) and product innovation driving margin recovery; expects a stronger H2 2025 and a “more historical ~30% adjusted EBITDA margin profile” through the remainder of 2025 .
Capex was $10M; full-year 2025 capex outlook discussed on the call was $30–$45M (higher than the $25–$40M guide disclosed in Feb), a potential narrative shift toward targeted growth and efficiency investments .

What Went Well and What Went Wrong

What Went Well

Margin recovery: Gross margin rose to 56% (from 47% in Q1), and Adjusted EBITDA margin reached 33% on improved yields and operational efficiencies .
Product/retail execution: New product innovation and multiple dispensary openings (FL, CT) supported retail performance; management: “we generated more efficient and productive cultivation yields, delivered new product innovation, and improved retail performance in several key markets” .
Operating discipline: SG&A held at $86.3M (43% of revenue), reflecting ongoing efficiencies; net cash from operations improved to $11M vs $8M y/y .

What Went Wrong

Top-line pressure: Revenue declined to $202.3M (down from $222.4M y/y; down from $209.8M q/q), driven by price compression, competition, and wholesale AR tightening .
Wholesale headwinds: Management reiterated AR strategy as a deliberate constraint on wholesale revenue near term while they prioritize creditworthy customers .
Net loss widened q/q on higher tax provision: Net loss was $(19.2)M vs $(11.5)M in Q1; income tax expense rose to $35.2M vs $17.3M in Q1 .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$218.2	$209.8	$202.3
Gross Profit ($USD Millions)	$107.5	$99.6	$113.0
Gross Profit %	49%	47%	56%
SG&A as % of Revenue	38%	40%	43%
Income from Operations ($USD Millions)	$(303.9)	$15.0	$26.2
Net Income (Loss) ($USD Millions)	$(272.7)	$(11.5)	$(19.2)
Adjusted EBITDA ($USD Millions)	$62.9	$54.4	$66.2
Adjusted EBITDA Margin %	29%	26%	33%
Net Cash from Operations ($USD Millions)	$44.0	$2.0	$11.0
Capital Expenditure ($USD Millions)	$14.0	$14.0	$10.0

Notes: Company reports in thousands; figures shown as $USD Millions by conversion for readability.

Actuals vs S&P Global Consensus

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Actual ($USD Millions)	$218.2	$209.8	$202.3
Revenue Consensus Mean ($USD Millions)	$218.9*	$212.8*	$210.9*
Primary EPS Actual ($USD)	0.0362*	-0.0453*	-0.0585*
Primary EPS Consensus Mean ($USD)	-0.0700*	-0.0476*	-0.0498*
EBITDA Consensus Mean ($USD Millions)	$64.9*	$60.9*	$57.7*

Values with asterisk (*) retrieved from S&P Global.

Estimate comparison highlights:

Q2 revenue missed consensus by ~$8.6M (4.1%); EPS missed by ~$0.009 .
EBITDA consensus was $57.7M* vs company-reported EBITDA of $61.7M (company definition per PR reconciliation) . Differences may reflect definition variances between SPGI consensus and company-reported EBITDA.

KPIs and Balance Sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Dispensaries (period-end)	153	155	157
Production Facilities	15	15	15
Cultivation Capacity (sq ft)	>1.1M	>1.1M	>1.1M
Cash & Cash Equivalents ($USD Millions)	$87.8	$84.2	$68.6
Working Capital ($USD Millions)	$160.0	$193.0	$224.0
Total Debt, net ($USD Millions)	$414.0	$421.0	$403.0
Class A Shares Outstanding	358,747,290	359,718,318	361,779,913

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures	FY 2025	$25–$40M	$30–$45M (as discussed on Q2 call)	Raised
Adjusted EBITDA Margin Profile	H2 2025	Not formally guided	“Maintain a more historical ~30% adjusted EBITDA margin profile” (qualitative)	Maintained around ~30%

No explicit revenue, OpEx, OI&E, tax rate, or segment guidance was provided in the Q2 press release. Management reiterated expectations for a stronger back half of 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Accounts Receivable Strategy / Wholesale	Price compression and promotional activity cited as headwinds; adult-use Ohio and acquired ops aided offsets	AR strategy to concentrate on creditworthy customers; acknowledged near-term revenue impact; expect gradual recovery through turning accounts back on	Stabilizing; improvement targeted H2
Margins & Efficiency	Emphasis on optimization, automation; Q1 gross margin 47%	Gross margin improved to 56%; adjusted EBITDA margin to 33%; management aims for ~30% adjusted EBITDA margin in H2	Improving
Product Innovation & Retail Expansion	New product launches and footprint expansion (CT, FL)	Continued launches; bodega-style retail format in AZ; exclusive Grow Sciences partnership in IL; new dispensaries in FL and CT	Accelerating
Regulatory/Macro (PA, FL)	Adult-use Ohio celebrated; entered VA	Positive dialogue on PA adult-use prospects; monitoring FL dynamics; view H2 favorably	Potential upside
Capital Allocation	FY24 capex $99M; FY25 guide $25–$40M	Q2 capex $10M; call outlook $30–$45M for FY25	Slightly higher plan

Management Commentary

CEO: “we generated more efficient and productive cultivation yields, delivered new product innovation, and improved retail performance in several key markets” .
CEO: “we anticipate a stronger second half of 2025 for Verano” .
Call: “We expect to maintain a more historical 30% adjusted EBITDA margin profile throughout the remainder of 2025” .
Wholesale/AR: “As a first mover on this issue, we anticipated our accounts receivable strategy would impact revenue in the short term… we believe these actions will benefit our wholesale business in the long term” .

Q&A Highlights

Wholesale revenue and AR policy: Management reiterated selective wholesale engagement to creditworthy customers, expecting gradual reactivation through 2025 .
Margin vs pricing balance: CFO noted a balance between maintaining margin strength and tactical pricing to protect share; product innovation expected to support margins .
Efficiency wins in Florida and Illinois: Yield improvements and operational changes boosted margin profile .
Regulatory outlook: Positive commentary around Pennsylvania adult-use prospects; management monitoring potential timing and impact .
Capex and cash: Q2 capex $10M and a full-year range of $30–$45M focused on efficiencies and strategic retail expansion; cash balance context discussed .

Estimates Context

Revenue: Q2 actual $202.3M vs consensus $210.9M* (miss). Q1 actual $209.8M vs $212.8M* (miss). Q4 actual $218.2M vs $218.9M* (in line) .
EPS: Q2 actual -$0.0585 vs -$0.0498* (miss); Q1 actual -$0.0453 vs -$0.0476* (slight beat); Q4 actual $0.0362 vs -$0.0700* (beat). Values with asterisk () retrieved from S&P Global.
Implications: Expect estimate revisions to incorporate wholesale AR constraints, stronger margin trajectory, and adjusted FY25 capex plans.

Key Takeaways for Investors

Margin normalization appears underway: gross margin 56%, adjusted EBITDA margin 33%; management targets ~30% adjusted EBITDA margin through H2, signaling operational progress .
Top-line headwinds persist (pricing, competition, AR strategy), driving revenue misses vs consensus; watch wholesale reactivation cadence as a key H2 driver* .
Retail and product innovation are offsetting factors: new formats (AZ bodega-style), IL partnership (Grow Sciences), and store openings (FL/CT) support mix and margin .
Balance sheet discipline continues: cash $68.6M, working capital $224M, total debt $403M; net cash from ops improved to $11M .
Capex outlook increased to $30–$45M vs prior $25–$40M, focused on efficiency and selective footprint investments—monitor ROI and margin leverage .
Regulatory optionality (PA adult-use, Florida dynamics) remains a medium-term catalyst; estimate paths likely adjust as visibility improves .
Near-term trading setup: revenue miss vs consensus and AR-driven wholesale pressure offset by margin recovery; focus on H2 execution signals and any wholesale normalization updates on subsequent calls* .

References:

Q2 2025 press release and 8-K exhibits, including financial tables and non-GAAP reconciliations .
Q1 2025 8-K and press release .
Q4 2024 8-K and press release .
Q2 2025 earnings call transcript (Verano IR site) .
Additional Q2 press releases: bodega-style AZ format , IL Grow Sciences partnership , FL footprint expansion .

S&P Global disclaimer: Values marked with an asterisk (*) were retrieved from S&P Global.

Verano Holdings Corp. (VRNOF)·Q2 2025 Earnings Summary