Verano Holdings Corp. ((TSE:VRNO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Verano Holdings Corp. recently held its earnings call, revealing a mixed sentiment. While the company celebrated notable achievements in retail revenue growth, product innovation, and efficiency improvements, these were overshadowed by declines in wholesale revenue, an increased net loss, and challenges from heightened competition in key markets. The overall performance indicates positive operational strides but is tempered by financial and competitive pressures.
Retail Revenue Growth
Verano Holdings reported retail revenue of $169 million in the second quarter, marking a 3% increase compared to the previous year. This growth was largely driven by organic expansion in Ohio and the integration of acquired Cannabist assets in Virginia and Arizona.
Gross Profit Increase
The company achieved a gross profit of $113 million, representing 56% of revenue and a 13% sequential increase. This improvement was attributed to efficiencies in cultivation and production, which boosted volume and yields.
Product Innovation and Market Expansion
Verano launched new products and opened new dispensaries, including two Zen Leaf locations in Connecticut and a new MÜV site in Florida. The company also introduced curbside pickup in Ohio and reported a 44% increase in vape market share.
Exclusive Partnership with Grow Sciences
A new partnership with Grow Sciences brought award-winning products to the Illinois market, generating strong initial sales and interest from wholesale customers.
Improved Efficiency Measures
The company reported increased retail transactions and grams per headcount in Florida and other markets, showcasing successful efficiency efforts.
Decline in Wholesale Revenue
Wholesale revenue fell to $73 million, an 8% sequential decline and a 21% drop from the previous year, primarily due to increased competition and strategic accounts receivable management.
Net Loss Increase
Verano’s net loss rose to $19 million in the second quarter, compared to $12 million in the first quarter, driven by higher income tax provisions.
Revenue Decline
The company reported a second-quarter revenue of $202 million, a 4% sequential decrease and a 9% decline from the prior year, mainly due to reduced wholesale revenue and increased competition.
Increased Competition in Key Markets
Verano faced ongoing price compression and increased competition in key markets like Illinois and New Jersey, impacting both retail and wholesale performance.
Forward-Looking Guidance
Looking ahead, Verano anticipates maintaining a historical adjusted EBITDA margin profile of 30% throughout the remainder of 2025, despite ongoing market challenges. The company reported a net loss of $19 million for the quarter, with expectations for capital expenditures to range between $30 million and $45 million for the full year. Verano ended the quarter with $69 million in cash and cash equivalents and made strategic debt payments.
In summary, Verano Holdings Corp.’s earnings call highlighted a mixed performance, with operational successes in retail growth and efficiency countered by financial challenges and competitive pressures. The company remains optimistic about maintaining its EBITDA margin profile despite these hurdles.