Trulieve Cannabis (OTC) ((TSE:TRUL)) has held its Q4 earnings call. Read on for the main highlights of the call.
Trulieve Cannabis (OTC) recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company demonstrated strong financial performance with notable improvements in revenue, gross margin, and adjusted EBITDA. Although there was a net loss and increased SG&A expenses, strategic initiatives and expansion efforts were highlighted as positive contributors. A setback in Florida’s adult-use legalization was acknowledged, but the overall highlights were deemed to outweigh the lowlights.
Revenue Growth
Trulieve reported a 5% growth in full-year revenue for 2024 compared to 2023, with a sequential increase of 6% in the fourth quarter and a 5% year-over-year rise. This growth underscores the company’s ability to enhance its financial standing even amidst market challenges.
Gross Margin Improvement
The company achieved a significant improvement in its gross margin, reaching 62% in Q4 2024, up from 52% in 2023. This improvement was primarily driven by lower production costs, showcasing Trulieve’s operational efficiency.
Adjusted EBITDA Increase
Trulieve’s adjusted EBITDA saw a substantial increase of $98 million, reaching $420 million for the full year 2024, a 30% rise from 2023. The fourth quarter alone reflected a 37% margin, highlighting the company’s strong financial management.
Customer Retention and Loyalty Program Success
Customer retention improved significantly, with an overall rate of 68% and 76% in medical-only markets. The loyalty program proved successful, with members spending 2.3 times more than non-members, indicating strong customer engagement and satisfaction.
Successful Expansion and Retail Optimization
In 2024, Trulieve expanded its retail footprint by adding 33 new stores, ending the year with 225 locations. The company plans to open 10 more stores in 2025 and refresh or remodel up to 45 dispensaries, emphasizing its commitment to growth and optimization.
Net Loss
Despite reporting a net loss of $155 million for 2024, this was a marked improvement from the $527 million loss in 2023, reflecting the company’s efforts to stabilize its financial position.
SG&A Expenses Increase
SG&A expenses rose to $510 million, accounting for 43% of revenue in 2024, compared to $386 million or 34% of revenue in 2023. This increase highlights the company’s investment in its strategic initiatives.
Challenges in Florida Market
Trulieve faced challenges in the Florida market as Amendment 3 for adult-use legalization did not pass, receiving only 56% support, falling short of the required 60% approval.
Forward-Looking Guidance
Looking ahead, Trulieve plans to focus on balance sheet improvement by retiring at least half of its private placement notes maturing in October 2026. The company also aims to continue expanding its retail network, with plans to open 10 more stores in 2025, and maintain a strong cash position with $300 million in cash and investments.
In summary, Trulieve Cannabis (OTC) showcased a strong financial performance during its recent earnings call, with notable improvements in revenue, gross margin, and adjusted EBITDA. Despite some challenges, particularly in the Florida market, the company’s strategic initiatives and expansion efforts are set to drive future growth. Investors and stakeholders can look forward to continued focus on financial stability and retail expansion.