Glass House Brands Reports First Quarter 2025 Financial Results

Core Insights - Glass House Brands reported strong financial results for Q1 2025, with consolidated revenue of $44.8 million, a 49% increase year-over-year, and an impressive gross margin of 45% [2][4][6] - The company achieved significant growth in wholesale biomass production, reaching 152,568 pounds, which is a 149% increase compared to the same period last year [3][7] - Retail revenues grew by 19% year-over-year, contrasting with a 13% decline in California's overall retail sales, highlighting the company's strong market position [2][8] Financial Performance - Q1 2025 revenue was $44.8 million, up from $30.1 million in Q1 2024, but down 15% from $53.0 million in Q4 2024 [4][6] - Gross profit for the quarter was $20.1 million, compared to $12.5 million in Q1 2024 and $22.8 million in Q4 2024, with a gross profit margin of 45% [4][9] - Adjusted EBITDA was $4.4 million, a significant improvement from $(1.6) million in Q1 2024, but down from $9.0 million in Q4 2024 [4][15] Production and Cost Efficiency - The cost of production for biomass was $108 per pound, a 41% decrease from $182 per pound in Q1 2024 [3][4] - The company produced nearly 153,000 pounds of wholesale biomass, exceeding guidance and reflecting a strong operational performance [2][5] - The average selling price for wholesale biomass was $193 per pound, down from $282 in Q1 2024 [10] Strategic Initiatives - Glass House is progressing with its Phase III expansion at the SoCal Farm, with initial revenues expected before year-end 2025 and a projected annual capacity of over 1 million pounds of biomass by 2026 [5][11] - The company has secured a new $50 million senior secured credit facility, enhancing its financial flexibility and extending the maturity of its senior secured debt to 2030 [5][11] - A collaboration with the University of California, Berkeley, has been initiated to explore hemp-related research, indicating a strategic move towards diversifying product offerings [5][11] Outlook - For Q2 2025, the company expects revenue between $57 million to $59 million, representing an 8% year-over-year increase and nearly 30% sequential growth from Q1 2025 [18][20] - Full-year 2025 revenue is projected to be between $220 million and $230 million, reflecting a 12% year-over-year increase [22][26] - The anticipated cost of production for 2025 is guided to be $105 per pound, down from $123 per pound in 2024, showcasing ongoing operational efficiencies [24][26]