Financial Data and Key Metrics Changes - Revenue for Q3 reached an all-time high of $149.7 million, up 14% year over year and 9% sequentially [21] - Gross margin percentage was 27%, consistent with Q3 last year and up from 26% sequentially [22] - Adjusted EBITDA was a record $10.6 million, up 11% year over year and 32% sequentially [23] - Free cash flow of $7.7 million grew 148% year over year, marking the second highest level since disclosure began [25] - Net income turned positive at $832,000, a significant turnaround from a $2.8 million net loss in Q2 [8] Business Line Data and Key Metrics Changes - Bricks-and-mortar revenue was a record, up 18% year over year, with same-store sales growth accelerating to 7.4% [6][21] - Bricks-and-mortar adjusted EBITDA was $12.7 million, an all-time high, up 42% year over year [8][23] - E-commerce business continues to underperform, representing less than 3% of consolidated revenues [46] Market Data and Key Metrics Changes - Canna Cabana's market share across five operating provinces reached 12%, the highest level since legalization [6] - In Germany, High Tide has a 16% market share, positioning itself strongly in the medical cannabis market [12] Company Strategy and Development Direction - The company aims to leverage its relationships with licensed producers to channel German medical cannabis shipments through its network [10] - High Tide's acquisition of Remexian reflects a disciplined shareholder-first approach, targeting growth in the German market [9][15] - The company plans to expand its presence in other European markets, including the UK, Poland, Czechia, and Switzerland [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the bricks-and-mortar business, with no signs of slowing down in same-store sales [6][30] - The company is optimistic about the integration of Remexian and the potential for growth in the German market [62] - Management acknowledged temporary challenges in the supply chain from Portugal but expects normalization by November [40] Other Important Information - The company closed a $30 million junior subordinated loan with Kronos, validating its strategy and execution [17] - High Tide has now sold over $1.9 billion of federally legal cannabis, establishing itself as a leader in the industry [10] Q&A Session Summary Question: On same-store sales, how much of the recent acceleration is due to industry improvement versus market share gains? - Management indicated that the same-store sales growth is primarily due to having the best retail model, not just competitor closures [29][30] Question: What is the company's philosophy on capital allocation post-Remexian transaction? - Management highlighted the need for working capital to support Remexian's growth and emphasized organic store openings while considering M&A opportunities [36][39] Question: How confident is the company in executing a turnaround for the e-commerce business? - Management acknowledged the underperformance but expressed optimism about new initiatives and partnerships to improve the segment [46] Question: What is driving the expansion of margins in the bricks-and-mortar segment? - Management attributed margin increases to a combination of white label sales, price stabilization, and operational efficiencies [49][53] Question: How are newer stores performing relative to prior cycles? - Management reported that new stores are ramping up sales faster than expected, benefiting from brand recognition and high-quality locations [57][58] Question: What are the opportunities across Europe for future investments? - Management confirmed ongoing monitoring of other EU markets for compelling commercial opportunities while focusing on the integration with Remexian [61]

Financial Data and Key Metrics Changes - Revenue for Q3 reached an all-time high of $149.7 million, up 14% year over year and 9% sequentially [22] - Adjusted EBITDA was a record $10.6 million, up 11% year over year and 32% sequentially [24] - Free cash flow of $7.7 million grew 148% year over year, marking the second highest level since disclosure began [9][26] - Net income turned positive at $832,000, a significant turnaround from a $2.8 million net loss in Q2 [9] Business Line Data and Key Metrics Changes - Bricks-and-mortar revenue was a record, up 18% year over year, with same-store sales growth accelerating to 7.4% [7][22] - Bricks-and-mortar adjusted EBITDA reached an all-time high of $12.7 million, up 42% year over year [9][24] - E-commerce business continues to underperform, with less than 3% of consolidated revenues, prompting management to implement changes [25][47] Market Data and Key Metrics Changes - Canna Cabana's market share across five operating provinces reached 12%, the highest since legalization [8] - In Germany, the company started with a 16% market share, leveraging relationships with licensed producers [13][19] Company Strategy and Development Direction - The company aims to expand its brick-and-mortar presence, targeting 300 stores in Canada, with plans to open 20 to 30 new locations annually [40] - The recent acquisition of Remexian is seen as a strategic move to enter the German market, with plans to leverage existing relationships with Canadian licensed producers [10][11] - The company is focused on curating a diverse menu of cannabis strains in Germany and expanding into other European markets [15][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the bricks-and-mortar business, with no signs of slowing down in same-store sales [8][31] - The company is optimistic about the integration of Remexian and the potential for growth in the German market, despite temporary supply chain issues from Portugal [39][41] - Management highlighted the importance of maintaining a strong balance sheet while pursuing growth opportunities [18][39] Other Important Information - The company has closed a $30 million junior subordinated loan with Kronos, which is seen as validation of its strategy [18] - Management emphasized the importance of operational efficiency, with salaries and wages representing 12.2% of revenue, the lowest in seven quarters [24] Q&A Session Summary Question: How much of the recent acceleration in same-store sales is due to industry improvement versus market share gains? - Management indicated that the company has the best retail model, contributing to the acceleration in same-store sales, with competitor closures playing a minor role [30][31] Question: What is the company's philosophy on capital allocation post-Remexian transaction? - Management stated that significant working capital is required for growth, and they plan to use raised funds to support Remexian while continuing organic store openings [38][39] Question: How confident is the company in executing a turnaround for the e-commerce business? - Management acknowledged the underperformance of the e-commerce segment but expressed optimism about new initiatives and partnerships to improve sales [47][49] Question: What is driving the expansion of margins in the bricks-and-mortar segment? - Management attributed margin expansion to a combination of white label sales, price increases, and operational efficiencies [54] Question: How are newer stores performing relative to prior cycles? - Management reported that newer stores are ramping up sales faster than expected, benefiting from the strong brand recognition of Canna Cabana [58][60] Question: What are the opportunities for expansion in other European markets? - Management indicated that while the focus is on integrating Remexian, they are monitoring other EU markets for potential entry when compelling opportunities arise [63]

Core Insights - High Tide Inc. reported record financial results for Q3 2025, including significant increases in revenue, adjusted EBITDA, and free cash flow, demonstrating strong operational performance and market growth [2][5][6]. Financial Highlights - Revenue reached $149.7 million for Q3 2025, a 14% increase year-over-year and the fastest growth rate in seven quarters [6]. - Adjusted EBITDA was a record $10.6 million, up 11% year-over-year and 32% sequentially, marking the 22nd consecutive positive quarter [11]. - Free cash flow for Q3 2025 was $7.7 million, representing a 148% increase year-over-year and a 57% increase sequentially [5][11]. - The company achieved positive net income of $832 thousand, a 1% increase year-over-year, reversing a net loss of $2.8 million sequentially [5][11]. Operational Highlights - Same-store sales increased by 7.4% year-over-year, the fastest growth rate in two years, with a 12% market share in the five provinces where Canna Cabana operates [5][10]. - The company opened seven new Canna Cabana locations across Ontario, Manitoba, and Alberta during the quarter [10]. - Canna Cabana remains the largest cannabis retail brand in Canada with 207 stores, and the company is on track to exceed 300 locations [18][26]. Strategic Developments - High Tide completed the acquisition of a 51% stake in Remexian Pharma GmbH, enhancing its position in Germany's medical cannabis market [3][15]. - The company’s loyalty programs, Cabana Club and ELITE, have seen significant growth, with membership surpassing 2.15 million in Canada, a 39% increase year-over-year [19]. Market Position - High Tide holds a 12% share of the cannabis retail market in Canada, up from 11% the previous year, and continues to attract top Canadian cannabis brands [5][26]. - The average Canna Cabana store generates 2.1 times the revenue compared to peers, indicating strong operational efficiency [11].

Financial Performance - The company generated $137.8 million in revenue for the second fiscal quarter of 2025, an increase of 11% year over year, and 12% when accounting for one fewer day in the quarter [7][11][13] - Gross profit was $35.5 million, consistent year over year, with a gross profit margin of 26%, down from 28% the previous year [11][13] - Adjusted EBITDA was $8.1 million, marking the 21st consecutive positive quarter, although it decreased from $10.0 million in the previous year [11][13] - The company reported a net loss of $2.8 million, compared to net income of $0.2 million in the prior year [11][13] Operational Highlights - The company operates 200 Canna Cabana locations across Canada, maintaining its position as the largest cannabis retail brand in the country [6][11] - Daily same-store sales increased by 6.2% year over year, the fastest growth rate in five quarters [11][12] - Canna Cabana achieved a 12% market share in the cannabis retail market, up from 11% the previous year [11][12] Membership Growth - Cabana Club membership reached 1.9 million, a 33% increase year over year, with ELITE memberships surpassing 97,000, a 120% increase year over year [11][12][17] - Global Cabana Club membership exceeded 5.87 million, including 104,700 ELITE members [11][12][17] Strategic Initiatives - The company is in exclusive discussions regarding a transaction with a leading German medical cannabis importer and wholesaler, with due diligence in the final stages [5][22] - The company submitted a model project proposal to the German Federal Office for Agriculture and Food related to the study of commercial cannabis use by adults [7][22] Product Offerings - The company currently sells 67 cannabis and accessory SKUs across its brands, with plans for new product launches expected this summer [8][20] - The company continues to expand its white label product offerings under the Queen of Bud and Cabana Cannabis Co. brands [20]