Planet 13 Holdings, Inc. ((TSE:PLTH)) has held its Q4 earnings call. Read on for the main highlights of the call.
Planet 13 Holdings, Inc. recently held its earnings call, revealing a mixed sentiment. The company showcased strong revenue growth and expansion efforts, particularly in Florida, alongside improved EBITDA. However, challenges such as pricing pressures, especially in Florida, and a sequential revenue decline were also highlighted. Despite these hurdles, the company maintains a robust balance sheet, though it faces ongoing legal and tax uncertainties.
Revenue Growth
Planet 13 reported impressive revenue figures, generating $30.3 million in Q4 2024, a significant increase from $23 million in the same quarter the previous year. For the full year, the company achieved an 18% year-over-year revenue growth, reaching $116.4 million.
Expansion into Florida
The company made significant strides in expanding its retail presence in Florida, adding 30 new dispensaries in 2024. This expansion brought the total number of dispensaries to 34, marking a substantial growth in their retail footprint.
Wholesale and Brand Strength
Planet 13’s wholesale and brand strength were evident as it generated $3.4 million from wholesale, lifestyles, and other revenue in Q4, up from $3.2 million in Q3. The company also ranked as the fourth highest in branded sales in Nevada during the quarter.
Strong Balance Sheet
As of December 31, 2024, Planet 13 maintained a strong balance sheet with an unrestricted cash balance of $23.4 million. The company also paid off $3.3 million in bank debt, showcasing financial stability.
Adjusted EBITDA Improvement
The company reported a 49% year-over-year increase in adjusted EBITDA, reaching $3.5 million for the full year, indicating improved operational efficiency.
Sequential Revenue Decline
Despite overall growth, Planet 13 experienced a sequential revenue decline, with Q4 2024 revenue decreasing to $30.3 million from $32.2 million in Q3 2024. This was attributed to expected seasonal trends and pricing compressions.
Pricing and Margin Pressure
The company faced pricing and margin pressures, with gross margin declining from 51.9% in Q3 2024 to 43.2% in Q4. This was due to industry-wide price compression and discounting in Florida.
Challenges in Florida
Planet 13 encountered short-term challenges in Florida, particularly due to the failure of an adult-use amendment and subsequent market price compression.
Legal and Tax Uncertainties
The company is dealing with legal and tax uncertainties, with uncertain tax balances standing at $19.3 million as of December 31, 2024. Efforts are underway to recover excess taxes paid.
Forward-Looking Guidance
Looking ahead, Planet 13 plans to invest $3 million to $5 million in capital expenditures over the next 12 months, focusing on manufacturing upgrades in Florida and additional store openings. Despite a decrease in Q4 revenue compared to Q3, the company remains optimistic about future growth, driven by its expansion and strategic investments.
In summary, Planet 13 Holdings, Inc.’s earnings call presented a mixed outlook. While the company demonstrated strong revenue growth and expansion efforts, it also faces challenges from pricing pressures and revenue declines. Nevertheless, with a solid balance sheet and strategic plans for future investments, Planet 13 is poised to navigate these challenges and continue its growth trajectory.