STAMFORD, Conn. — Curaleaf Holdings Inc., a leading international provider of consumer products in cannabis, today reported its financial and operating results for the second quarter ended June 30, 2024. All financial information is reported in accordance with U.S. generally accepted accounting principles (GAAP) and is provided in U.S. dollars unless otherwise indicated.
Boris Jordan, Executive Chairman of Curaleaf, stated, “Second quarter revenue was $342 million, up 2% and adjusted gross margin of 48% was up 253 basis points compared to last year. Our gross margin showed successive improvement each month during the quarter with June exiting at 50%. Adjusted EBITDA was $73 million or 21.3%. Thus far, the first half of 2024 has unfolded as we guided. We are starting to see the benefits of the work we initiated 18 months ago to streamline the business, drive efficiencies in our cultivation facilities, and leverage both domestic and international growth opportunities. Looking to the second half of the year, these actions will drive an acceleration in both our revenue and margins as state and country catalysts develop further, including New York, Ohio, and Germany. Furthermore, in June Curaleaf launched The Hemp Company to expand the Select brand to consumers we are not reaching today with responsibly sourced, safe and tested hemp derived THC edibles and beverages to a strong reception. Our global strategic vision is playing out on multiple fronts, yet there is much more for us to accomplish.”
Matt Darin, Chief Executive Officer of Curaleaf commented, “Curaleaf continues to execute its vision of being the global leader in cannabis. We are at a pivotal time for our industry, on the cusp of federal reform, and the future is bright. Our international business experienced superb 78% year-over-year growth led by the UK, Germany, and contributions from the Northern Green acquisition. With this international growth in Q2, Curaleaf is leaning into its evolution from an MSO to an MCO, a multi-country operator, a term which represents our global vision and business that spans 15 countries. We believe the market will ultimately reward the companies that have a portfolio of global brands that are trusted by consumers worldwide. We’re also expanding consumer reach by leveraging distribution channels not available in our regulated business. We announced our entry into the hemp-derived THC market with two product lines, Select edibles and Select Zero Proof seltzers, sold via our direct-to-consumer website, TheHempCompany.com, which currently ships to over half the U.S. and through distribution partners.”
Second Quarter 2024 Financial Highlights
- Net Revenue of $342.3 million, a year-over-year increase of 2% compared to Q2 2023 revenue of $335.6 million. Sequentially, net revenue increased 1%
- Gross profit of $160.5 million and gross margin of 47%
- Adjusted gross profit(1) of $163.1 million and adjusted gross margin(1) of 48%, an increase of 253 basis points year-over-year
- Net loss attributable to Curaleaf Holdings, Inc. of $48.9 million or net loss per share of $0.06
- Adjusted EBITDA(1) of $73.0 million and adjusted EBITDA margin(1) of 21%, a 15 basis point decrease year-over-year
- Cash at quarter end totaled $89.4 million
- Operating and free cash flow from continuing operations of $30.2 million and $6.0 million, respectively
Adjusted EBITDA, adjusted gross profit and free cash flow from continuing operations are non-GAAP financial measures, and adjusted EBITDA margin and adjusted gross margin are non-GAAP financial ratios, in each case without a standardized definition under GAAP and which may not be comparable to similar measures used by other issuers. See “Non-GAAP Financial Performance Measures” below for definitions and more information regarding Curaleaf’s use of non-GAAP financial measures and non-GAAP financial ratios. See “Reconciliation of Non-GAAP financial measures” below for a reconciliation of the non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures.
Six Months Ended June 30, 2024 Financial Highlights
- Net revenue of $681.2 million a 2% increase year-over-year
- Gross profit of $321.4 million and gross margin of 47%
- Adjusted gross profit(1) of $324.5 million and adjusted gross margin(1) of 48%
- Operating cash flow from continuing operations of $76.3 million and free cash flow from continuing operations of $38.5 million
- Net loss attributable to Curaleaf Holdings, Inc. of $97.2 million or net loss per share of $0.13
- Adjusted EBITDA(1) of $149.7 million and adjusted EBITDA margin of 22%
Second Quarter 2024 Operational Highlights
- Opened our 62nd dispensary in Florida located at Miami North Biscayne, ending the quarter with a total of 146 U.S. retail stores.
- Completed the Northern Green Canada acquisition for a purchase price of approximately $16.0 million plus an earnout.
- Purchased for cancellation $15.0 million of our Senior Secured Notes due December 2026 at a 7.75% discount.
- Launched Select Fruit Stiq, a rechargeable 1G All-In-One cannabis oil vape with 6 fruit-forward terpene blends in 9 states, including Arizona, Florida, Illinois, Massachusetts, Maryland, Maine, New York, Nevada, and Utah.
- In Germany, commenced expanded medical sales under Pillar 1 legislation on April 1.
- Curaleaf International won 4 awards at the Business of Cannabis show, including Cultivator of the Year and European Cannabis Company of the Year.
- In June, Curaleaf entered the hemp-derived THC space and launched its new online storefront, TheHempCompany.com, which offers a variety of Select gummies, Zero Proof Seltzers and ships to 25 states, and the District of Columbia.
- The Hemp Company entered into a strategic partnership with a large direct-to-consumer distribution partner in the U.S.
- Post Second Quarter 2024 Operational Highlights
- In New York, opened one new dispensary and expanded adult-use sales in two existing stores, bringing the total to 147 U.S. retail stores.
- Began adult-use sales in Ohio to wholesale customers and at our two retail dispensaries in Newark and Cuyahoga Falls.
Balance Sheet and Cash Flow
As of June 30, 2024, the Company had $89.4 million of cash and $563.3 million of outstanding debt net of unamortized debt discounts.
During the six months ended June 30, 2024, Curaleaf invested $37.8 million, net in capital expenditures, focused on cultivation, automation, and selective retail expansion in strategic markets.
Shares Outstanding
For the second quarter of 2024 and 2023, the Company’s weighted average Subordinate Voting Shares plus Multiple Voting Shares outstanding amounted to 740,787,287 and 719,269,057 shares, respectively.
Non-GAAP Financial and Performance Measures
Curaleaf reports its financial results in accordance with GAAP and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. Curaleaf refers to certain non-GAAP financial measures and ratios, such as “adjusted gross profit”, “adjusted gross margin”, “adjusted EBITDA” and “adjusted EBITDA margin”. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company defines “adjusted gross profit” as gross profit net of cost of goods sold and related other add-backs. “Adjusted gross margin” is defined by Curaleaf as adjusted gross profit divided by total revenues. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA margin” is defined by Curaleaf as adjusted EBITDA divided by total revenue. “Free cash flow from operations” is defined by Curaleaf as Net cash provided by operating activities from continuing operations less the Purchases of property, plant and equipment (i.e. net capital expenditures). Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. We believe the adjusted results presented provide relevant and useful information for investors, because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, our reported GAAP financial results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of Non-GAAP measures to the most directly comparable GAAP measures.
Adjusted Gross Profit from Continuing Operations (Unaudited)
Gross profit from continuing operations was $160.5 million in the second quarter of 2024, compared with $147.8 million in the prior year period. Adjusted gross profit from continuing operations net of add-backs for the second quarter was $163.1 million compared with $151.4 millions in the second quarter of 2023. Adjusted gross profit margin from continuing operations for the second quarter of 2024 was 48%, an increase of 253 basis points compared with the second quarter of 2023. The year-over-year increase in adjusted gross profit margin was due to stronger wholesale margins and higher utilization rates in our facilities.
Gross profit from continuing operations was $321 million in the six months ended June 30, 2024, compared with $308 million in the six months ended June 30, 2023. Adjusted gross profit from continuing operations net of add-backs for the six months ended June 30, 2024 was $325 million compared with $313 million in the six months ended June 30, 2023. Adjusted gross profit margin from continuing operations for the six months ended June 30, 2024 was 48%, an increase of 80 basis points compared with the six months ended June 30, 2023.
Adjusted EBITDA (Unaudited)
Adjusted EBITDA was $73.0 million for the second quarter of 2024, an increase of 1% from $72.2 million in the second quarter of 2023. Adjusted EBITDA margin was 21.3%, a decrease of 15 basis points from 21.5% in the second quarter of 2023. The decrease in Adjusted EBITDA margin was primarily due to growth of lower margin international segment and pre-revenue expenses to support the launch of our hemp line.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) is a leading international provider of consumer products in cannabis with a mission to enhance lives by cultivating, sharing and celebrating the power of the plant. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf, Select, Grassroots, JAMS, Find and Zero Proof provide industry-leading service, product selection and accessibility across the medical and adult use markets. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Toronto Stock Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF.
