Planet 13’s Mixed Earnings Call: Growth Amid Challenges

Planet 13 Holdings, Inc. ((TSE:PLTH)) has held its Q1 earnings call. Read on for the main highlights of the call.

Planet 13 Holdings, Inc. recently held its earnings call, presenting a mixed sentiment regarding its financial performance. The company reported notable year-over-year revenue growth, primarily attributed to the acquisition of VidaCann and operational improvements in Florida. However, this positive outlook was tempered by a sequential revenue decline, a decrease in visitor numbers in Las Vegas, and pressure on gross margins. While efforts to address these challenges through cost-saving measures and market-specific strategies were discussed, the immediate financial metrics revealed ongoing struggles.

Revenue Growth

Planet 13 reported a significant increase in revenue, reaching $28 million in Q1 2025, up from $22.9 million in Q1 2024. This growth was largely driven by the acquisition of VidaCann, highlighting the company’s strategic expansion efforts.

Florida Market Expansion

The company experienced encouraging growth in Florida, thanks to cultivation upgrades that improved product quality, potency, and yield. These enhancements are expected to help Planet 13 regain market share in the region.

Resilient Wholesale Performance

Despite a challenging market environment, Planet 13’s wholesale revenue remained steady at $3.4 million. This stability underscores the strength of the company’s branded products in the market.

Cost-saving Initiatives

Planet 13 has initiated a comprehensive cost-saving program aimed at achieving long-term operational efficiency. This includes streamlining the supply chain and consolidating vendors to reduce costs.

Sequential Revenue Decline

The company faced a sequential revenue decline, with revenue dropping from $30.3 million in Q4 2024 to $28 million in Q1 2025. This decline was attributed to seasonality, consumer weakness, and pricing pressure in Nevada, California, and Illinois.

Las Vegas Visitor Decline

Visitor volume in Las Vegas decreased by 7% year-over-year, leading to a 9% decline in cannabis sales statewide. This reduction in foot traffic has significantly impacted the company’s sales figures.

Gross Margin Pressure

Planet 13 experienced a decrease in gross margin, which fell to 42.8% from 43.2% in Q4 2024. Price compression across markets resulted in a 5% year-over-year price decline for equivalent grams, putting additional pressure on margins.

Adjusted EBITDA Loss

The company reported an adjusted EBITDA loss of $2.5 million, primarily due to revenue deleveraging and cost misalignment, highlighting the financial challenges faced during the quarter.

Forward-looking Guidance

Looking ahead, Planet 13 remains optimistic about improving cash flow and profitability through its cost-saving initiatives. The company aims to be cash flow positive operationally, excluding tax payments, by Q2 or Q3 2025. Management is focusing on high-performing markets like Florida and Nevada, adapting product offerings, and expanding its retail footprint. The strategy centers on profitability, operational efficiency, and cash flow generation amidst a competitive cannabis market.

In conclusion, Planet 13’s earnings call reflected a mixed sentiment, with notable revenue growth overshadowed by sequential declines and margin pressures. The company’s strategic focus on cost-saving measures and market expansion, particularly in Florida, aims to navigate the challenges ahead and improve financial performance in the coming quarters.