EDMONTON, Alberta – SNDL Inc. reported its financial and operational results for the second quarter ended June 30, 2025. All financial information is reported in millions of Canadian dollars unless otherwise indicated.
Management highlights
- Net revenue: In the second quarter of 2025, net revenue totaled $244.8 million, reflecting a growth rate of +7.3% compared to the same period in the previous year. This increase was primarily driven by strong growth of +17.4% in our combined Cannabis business, as well as return to growth in our Liquor retail segment.
- Gross profit: Gross profit for the second quarter of 2025 reached $67.6 million, representing a +16.2% increase compared to the same period in the prior year.
- Gross margin: The gross margin in the second quarter of 2025 was 27.6%, in line with the record achieved in the first quarter. This represented an improvement of +2.1 percentage points year-over-year.
- Operating Income: The Company delivered positive operating income in the second quarter of 2025, totaling $5.0 million. This figure includes a $(0.8) million restructuring charge, resulting in an adjusted operating income of $5.8 million.
- Cash flow: Cash flow was negative by $(12.6) million during the second quarter of 2025. This was primarily driven by working capital and CAPEX investments, an additional $3.8 million in net outflows related to long-term investments, and a $1.0 million deposit related to the 1CM acquisition.
- Free cash flow: Free cash flow in the second quarter of 2025 was negative at $(7.9) million, as the strong P&L performance was more than offset by working capital investments to support international growth in the second half of the year, annual payments related to incentive programs and insurance premiums, as well as capital expenditures for future store openings.
- “Achieving positive quarterly operating income and net earnings across both metrics for the first time in the Company’s history during Q2 2025 marks a pivotal milestone and underscores the effectiveness of our strategic improvement agenda.
- We experienced growth across all operating segments during the quarter, led by a Cannabis business that expanded at almost three times the rate of the Canadian recreational market, and a Liquor Retail segment that is successfully adapting to shifting consumer preferences. Notably, our Liquor Retail segment delivered same-store sales growth of 2.7% and higher net revenue despite running with five fewer stores compared to the same period last year.
- Our operational rigor and focus on execution have driven significant gross margin expansion across all business units, while disciplined cost management contributed to a $5 million absolute reduction in G&A costs (including share-based compensation) year-over-year.
This strong performance gives us the confidence to continue investing in our business and people, affirming that we are on the path to delivering sustainable, long-term value to our shareholders.” said Zach George, Chief Executive Officer of SNDL.
Delivering consistent financial performance improvements and reliability is core to our mission at SNDL, as we remain focused on long-term value creation and the execution of our strategic roadmap. In this context, during the second quarter of 2025 we advanced several strategic initiatives, including:
- Entered into an arrangement agreement to acquire 32 cannabis retail stores from 1CM Inc. (“1CM”) for a total cash consideration of $32.2 million, with the transaction expected to close during the third quarter of 2025.
- Launched the Rise Rewards loyalty program, a highly anticipated initiative designed to offer Value Buds customers greater savings, rewards, and convenience. SNDL intends to expand the program across all retail banners in the future.
- Approved investments of $9.5 million in CAPEX and working capital to organically expand both our Cannabis and Liquor retail footprints, with store openings planned during the next 9 months
- Initiated a formal strategic review to evaluate SNDL’s exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listings – an important step in aligning our platform with future regulatory and market opportunities.
“Unlike many of its peers, SNDL’s strong balance sheet provides a strategic advantage as we continue to build a resilient and growth-oriented business. With no debt and $208.2 million in unrestricted cash as of June 30, 2025, we are well-positioned to pursue a range of high-return organic and inorganic growth opportunities. In addition, the SNDL team is now proudly serving patients in the UK and the EU through the export of both branded finished goods and wholesale flower, and awaits the resolution of litigation in the United States in order to complete SunStream restructurings that will provide shareholders with exposure to dynamic medical markets including Florida and Texas.
We are encouraged by the momentum we’ve built and energized by the progress we are making. Our team remains highly focused and motivated to navigate the challenges of a dynamic industry in pursuit of our ambition to become a global cannabis leader,” concluded Zach George.
Cannabis Retail
SNDL is one of Canada’s largest private-sector cannabis retailer, operating at July 30, 2025 in 184 locations under its three retail banners: “Value Buds” (123), and “Spiritleaf” (61, of which 4 are corporate stores and 57 are franchise stores). The Company’s Cannabis Retail strategy is based on several pillars, including the quality of its store locations, its range of products, and the unique experiences provided to customers. Using data and insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics to inform and improve its retail strategy.
Net revenue for Cannabis Retail reached a new quarterly record for the segment. The year-over-year growth in the second quarter, supported by an 8.2% increase in same-store sales, significantly outpaced the market. This demonstrates the effectiveness of our Value Buds model.
Operating Income experienced substantial growth, supported by increases in revenue and gross margin, as well as productivity initiatives lowering SG&A. Additionally, in the second quarter of 2025 there was a $1.1 million reversal of fixed asset impairments recorded a few years ago, as store performance continues to improve.
Cannabis Operations
SNDL has a diverse brand portfolio from value to premium, emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL’s vertical integration strategy.
Cannabis Operations continues to report significant growth in both revenues and profitability during the second quarter of 2025.
Net revenue growth was driven by edibles, following Indiva’s acquisition in the fourth quarter of 2024, as well as by accelerating international sales, which reached $3.8 million in the second quarter of 2025.
Gross profit and Operating Income improvements are driven by efficiency improvements from scale as well as productivity initiatives, resulting in another quarter of positive operating income for the segment.
Investments
As of June 30, 2025, the Company has deployed capital to a portfolio of cannabis-related investments with a carrying value of $406.1 million, including $384.2 million to SunStream Bancorp Inc. (“SunStream”). This carrying value was reduced by $23.4 million during the second quarter of 2025, primarily due to a decrease in the USD to CAD exchange rate from 1.4376 on March 31 to 1.3643 on June 30, 2025. Additionally, there was a $3.1 million cash distribution related to a partial investment repayment from Ascend Wellness Holdings.
During the second quarter of 2025, the investment portfolio generated a positive operating income of $1.8 million, primarily driven by interests earned from our cash accounts.
In the second quarter of 2025, the Company purchased 2,272,645 common shares of High Tide, which, combined with the 4,350,000 shares purchased up to March 31, 2025, resulted in a total position of 6,622,645 shares, representing 8.2% ownership as of June 30, 2025.
Equity Position
$614.3 million of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at June 30, 2025, resulting in a net book value of $1.1 billion.
The Board of Directors approved an amendment to the Company’s Share Repurchase Program announced on November 14, 2024, to increase the maximum number of common shares that the Company may repurchase up to 10% of the public float of the Company.
Although the Company did not complete any share repurchases during the second quarter of 2025, SNDL will continue to evaluate opportunities to utilize the program to the extent that management believes it is in the best interest of SNDL’s shareholders. As a reminder, during the fourth quarter of 2024 and the first quarter of 2025, the Company repurchased 10,764,107 common shares for cancellation.
About SNDL Inc.
SNDL Inc. (NASDAQ: SNDL, CSE: SNDL), through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies and the largest private-sector liquor and cannabis retailer in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf and Superette. With products available in licensed cannabis retail locations nationally, SNDL’s consumer-facing cannabis brands include Top Leaf, Contraband, Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Grön, No Future and Bhang Chocolate. SNDL’s investment portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis industry.
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