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].

Company Achievements - High Tide Inc. has surpassed 2 million Cabana Club members, establishing itself as the largest cannabis loyalty program in Canada [1][2] - The paid loyalty tier, ELITE, has exceeded 104,000 members, marking significant growth in the company's discount club model [1][2] Business Strategy - The growing membership base is seen as a key driver for traffic, margin, and differentiation as High Tide expands its Canna Cabana locations across Canada [2] - The company aims to grow to over 300 Canna Cabana locations, leveraging its loyalty programs for continued growth [2] Financial Developments - High Tide has filed a preliminary short form base shelf prospectus to replace its previous prospectus, allowing for flexibility in financing opportunities over a 25-month effective period [3][4] - The prospectus enables the company to offer securities up to an aggregate price of C$100,000,000 [3][5] - Proceeds from the sale of securities may be used for general corporate purposes, capital projects, internal expansion, or acquisitions [6] Market Position - High Tide operates the largest cannabis retail chain in Canada, with 202 locations across several provinces [9] - The company is recognized as one of Canada's Top Growing Companies and has received accolades for its rapid growth in the cannabis retail sector [13]

Financial Data and Key Metrics Changes - High Tide reported record revenue for Q1 at $142.5 million, an increase of 11% year-over-year and 3% sequentially, reaching an annual run rate of approximately $570 million [38] - Adjusted EBITDA was $7.1 million, down 32% year-over-year and 14% sequentially due to initiatives aimed at future growth [45] - Consolidated gross margins were 25% in Q1, down from 28% year-over-year and 26% sequentially, impacted by the illicit market and the launch of the Cabana Club loyalty program [42][43] Business Line Data and Key Metrics Changes - The brick-and-mortar segment led revenue growth, up 17% year-over-year, representing the fastest growth in five quarters [16][38] - Same-store sales increased by 5% year-over-year, with a remarkable 142% increase from October 2021 to December 2024 [12][39] - The Cabanalytics Business Data and Insights Platform generated record revenue of $11.3 million, up 49% year-over-year [42] Market Data and Key Metrics Changes - High Tide maintained an 11% market share in total sales across the five provinces where it operates, consistent with previous performance [17] - The average Canna Cabana store achieved an annual revenue run rate of $2.7 million, significantly higher than the average peer revenue of $1.3 million [40] Company Strategy and Development Direction - High Tide aims to expand its store count to 300 locations in Canada and enter the German medical cannabis market [14][30] - The company is focusing on organic growth while remaining open to strategic M&A opportunities [25] - The Cabana Club loyalty program is a key component of the growth strategy, with a target of reaching 2.5 million members [14][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the cannabis industry being recession-resistant, despite economic volatility [18][66] - The company is optimistic about future growth, particularly in the German market, and is exploring various partnership opportunities [32][56] - Management noted that working capital investments turned free cash flow negative this quarter but expects to be free cash flow positive for the fiscal year [26][46] Other Important Information - High Tide's White Label strategy is showing promise, with over $0.5 million in sales from the Queen of Bud brand [27] - The company has successfully launched the Cabana Club globally, now boasting 5.66 million members [16] Q&A Session Summary Question: Changes in Germany's market conditions - Management confirmed commitment to enter the German medical cannabis market and is exploring alternative partnerships beyond Purecan due to recent political developments [52][56] Question: Consumer behavior and market share dynamics in Canada - Management indicated long-term ambitions to reach at least a 15% market share in Canada, with strong same-store sales growth and resilience against inflation [62][66] Question: Timeline for entering the German market - Management stated that they are in discussions with multiple partners and expect to enter the market in a couple of months, emphasizing the importance of selecting the right partner [75][76] Question: Impact of tariffs on business - Management reassured that 99% of their business does not cross the US-Canada border, minimizing tariff impacts, and that most accessories are sourced domestically [78][80] Question: E-commerce segment performance - Management acknowledged short-term headwinds in the e-commerce segment but remains optimistic about long-term growth potential, especially with the global Cabana Club initiative [92][95]