Verano's Financial Overview for the Third Quarter of 2024
CHICAGO, Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF) has revealed its financial results for the third quarter ended September 30, 2024, adhering to U.S. Generally Accepted Accounting Principles (U.S. GAAP).
Latest Financial Highlights
Verano's performance in the third quarter has produced notable financial highlights:
- Revenues, net of discounts, reached $217 million, marking a 2.6% decline from the prior quarter.
- Gross profit totaled $109 million, equating to 50% of revenues.
- Sales and general administrative (SG&A) expenses registered at $92 million or 43% of revenue.
- Net loss stood at $(43) million, making up 20% of total revenue.
- Adjusted EBITDA of $64 million reflected 30% of revenue.
- Net cash provided by operating activities amounted to $30 million.
- Capital expenditures were reported at $57 million.
Management's Commentary
CEO George Archos reflected on the impactful role of cannabis in the recent election cycle, noting its significance as a bipartisan issue. "We are encouraged by the support for cannabis reform demonstrated by the electorate," he stated. Archos expressed confidence in the company's growth trajectory within the state, promising strategic initiatives in the months to come.
Looking ahead, Archos mentioned preparations to leverage potential catalysts, with a focus on an upcoming rescheduling process and additional dispensary openings in various markets.
Financial Overview
Third quarter revenues recorded at $217 million experienced a downturn compared to $240 million in the same quarter last year and $222 million from the previous quarter. The primary reasons behind this drop included temporary cultivation output challenges in Florida and expected revenue declines in Illinois and New Jersey as new dispensaries began operating.
When examining gross profit, it reached $109 million, which is a decrease from $133 million respectively in the third quarter of last year. The gross profit margin similarly showed a drop from 55% to 50% during this period.
SG&A expenses rose by 7% versus the previous year's third quarter, climbing from $86 million to $92 million due to increased salaries and benefits correlating with a growing workforce from the new store openings.
Net losses have intensified, from $(18) million in Q3 2023 to $(43) million in Q3 2024, majorly influenced by diminishing operations income.
Overall, adjusted EBITDA reflected a steady performance with figures at $64 million or 30% of revenue, indicating resilience despite challenging market conditions.
Operational Highlights
During the third quarter, Verano has expanded its retail presence through the opening of new dispensaries:
- The MÜV™ locations opened in Melbourne and Okeechobee, Florida, enhancing statewide operations to 79 dispensaries.
- Zen Leaf™ Fairless Hills relocated to a prime new location in Pennsylvania.
- Zen Leaf™ Arcadia in Arizona opened with innovative features for customer convenience.
Further, Verano introduced the Cabbage Club™ membership program, which allows consumers access to exclusive benefits across multiple states. They also expanded adult-use offerings in Ohio and completed acquisitions reinforcing their footprint in critical markets.
Future Guidance
As they move into the fourth quarter, the company anticipates continuity in organic growth trends, seeing a gradual recovery and improvement in revenue streams.
Balance Sheet and Liquidity Insights
As of September 30, 2024, Verano's current assets stood at $322 million, including cash and cash equivalents of $65 million. However, the organization faces a working capital deficit of $(114) million along with total debt of $420 million.
Contact Information
For further details, investors can reach out to:
Julianna Paterra, CFA
VP of Investor Relations
julianna.paterra@verano.com
Media inquiries can be directed to:
Steve Mazeika
VP of Communications
steve.mazeika@verano.com
312-348-4430
Frequently Asked Questions
What were Verano's revenues for Q3 2024?
Verano reported revenues of $217 million for Q3 2024, reflecting a decrease of 2.6% from the prior quarter.
Who is the CEO of Verano Holdings Corp.?
George Archos is the founder, Chairman, and Chief Executive Officer of Verano Holdings Corp.
What is the adjusted EBITDA for Q3 2024?
Adjusted EBITDA for Q3 2024 was $64 million, or 30% of total revenue.
How many dispensaries does Verano operate?
Verano operates 152 dispensaries across 14 states.
What is a key focus for Verano moving forward?
Verano aims to leverage potential growth catalysts including the rescheduling of cannabis and plans to open more dispensaries across various markets.
