GrowGeneration(GRWG) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and notes Condensed Consolidated Balance Sheets | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $23,309 | $27,471 | | Marketable securities | $25,399 | $28,984 | | Accounts receivable, net | $10,425 | $7,361 | | Inventory | $41,737 | $40,295 | | Total current assets | $108,988 | $113,208 | | TOTAL ASSETS | $160,610 | $174,352 | | LIABILITIES & STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts payable | $11,608 | $8,146 | | Total current liabilities | $27,266 | $24,274 | | Total liabilities | $53,889 | $54,259 | | Total stockholders' equity | $106,721 | $120,093 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $160,610 | $174,352 | - Total assets decreased by $13.7 million from $174.352 million at December 31, 2024, to $160.610 million at June 30, 2025[12] - Total stockholders' equity decreased by $13.372 million from $120.093 million to $106.721 million during the same period[12] Condensed Consolidated Statements of Operations | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $40,963 | $53,536 | $76,666 | $101,424 | | Gross profit | $11,594 | $14,421 | $21,301 | $26,785 | | Loss from operations | $(5,274) | $(6,514) | $(15,148) | $(15,946) | | Net loss | $(4,811) | $(5,896) | $(14,188) | $(14,733) | | Net loss per share, basic | $(0.08) | $(0.10) | $(0.24) | $(0.24) | - Net sales decreased by 23.5% for the three months and 24.4% for the six months ended June 30, 2025, compared to prior-year periods[14] - Net loss improved by 18.4% for the three months and 3.7% for the six months ended June 30, 2025, year-over-year[14] Condensed Consolidated Statements of Stockholders' Equity | (in thousands) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :------------- | :------------------------- | :-------------------------- | | Common Stock (Shares) | 59,403 | 59,772 | | Common Stock (Amount) | $59 | $60 | | Additional Paid-In Capital | $375,677 | $376,492 | | Accumulated Deficit | $(255,643) | $(269,831) | | Total Stockholders' Equity | $120,093 | $106,721 | - Total stockholders' equity decreased from $120.093 million to $106.721 million, primarily due to a net loss of $14.188 million[16] Condensed Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,750) | $(4,044) | | Net cash provided by investing activities | $2,699 | $6,182 | | Net cash used in financing activities | $(111) | $(4,317) | | Net decrease in cash and cash equivalents | $(4,162) | $(2,179) | | Cash and cash equivalents at end of period | $23,309 | $27,578 | - The net decrease in cash and cash equivalents was $4.162 million for the six months ended June 30, 2025, an increase from the prior-year period[18] - This was primarily driven by increased cash used in operating activities and decreased cash provided by investing activities[18] Notes to Condensed Consolidated Financial Statements 1. General Business Overview GrowGeneration operates Cultivation and Gardening and Storage Solutions segments, with 29 retail locations and online presence - GrowGeneration operates two major lines of business: Cultivation and Gardening and Storage Solutions[20] - As of June 30, 2025, the Company has 29 retail locations across 11 states and an online superstore[21] 2. Recent Accounting Pronouncements The Company is evaluating the impact of recently issued accounting pronouncements, ASU 2023-09, ASU 2024-03, and ASU 2025-05 - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, and will be adopted in Q4 2025[26] - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for fiscal years beginning after December 15, 2026[28] - ASU 2025-05 (Credit Losses for Accounts Receivable and Contract Assets) is effective for annual periods beginning after December 15, 2025[29] 3. Fair Value Measurements Financial assets and liabilities are classified into a three-level hierarchy, with cash equivalents as Level 1 and marketable securities as Level 2 | (in thousands) | Level | June 30, 2025 | December 31, 2024 | | :------------- | :---- | :------------ | :---------------- | | Cash equivalents | 1 | $12,961 | $16,945 | | Marketable securities | 2 | $25,399 | $28,984 | - Changes in fair value of marketable securities were $0.2 million (3 months) and $0.4 million (6 months) for June 30, 2025[32] 4. Revenue Recognition Net sales are disaggregated by segment and product line, with accounts receivable and customer deposits showing changes | (in thousands) | Accounts Receivable, Net | Customer Deposits | | :------------- | :----------------------- | :---------------- | | Balance as of January 1, 2025 | $7,361 | $2,404 | | Balance as of June 30, 2025 | $10,425 | $2,448 | | Increase | $3,064 | $44 | - Accounts receivable increased by $3.064 million from January 1, 2025, to June 30, 2025[37] - Of customer deposits as of January 1, 2025, $1.6 million was recognized as revenue during the six months ended June 30, 2025[37] [5. Property and Equipment](index=1