STAMFORD, Conn. — Curaleaf Holdings Inc., a leading international provider of consumer products in cannabis, today reported its financial and operating results for the third quarter ended September 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, Chairman and CEO of Curaleaf, stated, “Third quarter revenue was $331 million, down 1% and adjusted gross margin of 49% was up 312 basis points compared to last year. Adjusted EBITDA was $75 million or 23%, consistent with last year. In the first few months in my expanded role as Chairman and CEO, my focus has been on delivering value to all shareholders through disciplined execution of fundamental operating principles. The industry has experienced the pressures of regulatory overhang, increased competition, unprecedented weather conditions, and irrational pricing strategies. This backdrop is one of the key drivers behind our shift towards focusing on sustainable, profitable organic growth by maintaining share in challenged markets and growing share where we see strategic opportunity. One example is in our international business, which was a highlight this quarter, as it grew 82% year-over-year and 17% quarter over quarter to $30 million dollars. By design, our global presence offers a diversification of revenue streams that mitigates concentration risk.”
Third Quarter 2024 Financial Highlights
- Net Revenue of $330.5 million, a year-over-year decrease of 1% compared to Q3 2023 revenue of $333.2 million. Sequentially, net revenue decreased 3%
- Gross profit of $160.5 million and gross margin of 49%
- Adjusted gross profit of $161.3 million and adjusted gross margin of 49%, an increase of 312 basis points year-over-year
- Net loss attributable to Curaleaf Holdings, Inc. of $44 million from continuing operations or net loss per share from continuing operations of $0.07
- Adjusted EBITDA of $75.3 million and adjusted EBITDA margin of 23%, a 23 basis point increase year-over-year
- Cash at quarter end totaled $90.0 million
- Operating and free cash flow from continuing operations of $42.3 million and $14.5 million, respectively
- Nine Months Ended September 30, 2024 Financial Highlights
- Net revenue of $1,011.7 million, a 1% increase year-over-year
- Gross profit of $481.9 million and gross margin of 48%
- Adjusted gross profit of $485.8 million and adjusted gross margin of 48%
- Operating cash flow from continuing operations of $118.6 million and free cash flow from continuing operations of $53.0 million
- Net loss attributable to Curaleaf Holdings, Inc. of $144 million from continuing operations or net loss per share from continuing operations of $0.20
- Adjusted EBITDA of $225.0 million and adjusted EBITDA margin of 22%
Third Quarter 2024 Operational Highlights
- In New York, opened two new dispensaries in Rochester and Syracuse and expanded adult-use sales in two existing stores.
- Commenced adult-use sales in Ohio to wholesale customers and at our two retail dispensaries in Newark and Cuyahoga Falls.
- In Florida, opened two new dispensaries in Pensacola and Destin, bringing the total to 150 U.S. retail stores at quarter end.
- Launched JAMS Remix, a new line of flavor-forward jellies in New York, Arizona, Illinois, Connecticut, and Massachusetts.
Post Third Quarter 2024 Operational Highlights
- In Florida, opened two new dispensaries in Port St. Lucie and Miami, bringing the state total to 66 retail stores and the U.S. total to 151 U.S. retail stores.
- Successfully introduced Curaleaf flower into the German market.
- Rebranded our three Nevada stores to Curaleaf stores.
- Secured a $40 million revolving credit facility with a major commercial regional bank at a 7.99% interest rate that matures December 15, 2026, a milestone for a cannabis company.
Balance Sheet and Cash Flow
As of September 30, 2024, the Company had $90.0 million of cash and $557.4 million of outstanding debt net of unamortized debt discounts.
During the nine months ended September 30, 2024, Curaleaf invested $65.6 million, net in capital expenditures, focused on cultivation, automation, and selective retail expansion in strategic markets.
Shares Outstanding
For the third quarter of 2024 and 2023, the Company’s weighted average Subordinate Voting Shares plus Multiple Voting Shares outstanding amounted to 742,535,355 and 725,319,477 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”, “adjusted EBITDA margin” and “Free cash flow from operations”. 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.
Gross profit from continuing operations was $160.5 million in the third quarter of 2024, compared with $150.1 million in the prior year period. Adjusted gross profit from continuing operations for the third quarter of 2024 was $161.3 million compared with $152.2 million in the third quarter of 2023. Adjusted gross profit margin from continuing operations for the third quarter of 2024 was 49%, an increase of 312 basis points compared with the third quarter of 2023. The year-over-year increase in adjusted gross profit margin was due to lower production costs, an increase in vertical mix and higher utilization, partially offset by price compression and discounts.
Gross profit from continuing operations was $481.9 million in the nine months ended September 30, 2024, compared with $458.3 million in the nine months ended September 30, 2023. Adjusted gross profit from continuing operations for the nine months ended September 30, 2024 was $485.8 million compared with $464.7 million in the nine months ended September 30, 2023. Adjusted gross profit margin from continuing operations for the nine months ended September 30, 2024 was 48%, an increase of 160 basis points compared with the nine months ended September 30, 2023.
Adjusted EBITDA held steady at $75.3 million for the third quarter of 2024 and 2023, and Adjusted EBITDA margin remained flat at 23%.
Adjusted EBITDA was $225 million in the nine months ended September 30, 2024, compared with $223 million in the prior year period, and Adjusted EBITDA margin remained flat at 22%.
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, The Hemp Company 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.
