22nd Century Group (XXII) Q4 2025 earnings summary

Executive summary

• 2025 marked a strategic pivot from restructuring to growth, focusing on higher-margin proprietary branded products, notably VLN®, and closing legacy issues and unprofitable contracts.

• Launched new brands and products, including VLN low-nicotine cigarettes, now available in 1,636 retail outlets across 23 states and nearly 1,500 stores in a top-5 convenience chain.

• Positioned as the only tobacco company focused on harm reduction through nicotine reduction, targeting the 70% of 28.8 million U.S. smokers who want to change their habits.

• Regulatory progress includes MRTP renewal application, expansion plans for PMTA and MRTP filings with the FDA, and expanded state authorizations for branded products, with VLN® available in 48 states.

• Exited 2025 debt-free, improved operating structure, and secured a $9.5 million insurance settlement related to a prior facility fire.

Financial highlights

• Q4 2025 net revenue was $3.6 million, down from $4 million in Q3 2025 and down 12% year-over-year; full-year 2025 net revenue was $17.6 million, down 28% from 2024.

• Gross loss for Q4 2025 improved to $0.8 million from $1.1 million in Q3 2025 and $1.3 million in Q4 2024; full-year gross loss was $3.1 million, up from $2.4 million in 2024.

• Operating loss for Q4 2025 was $2.8 million, improved from $3.2 million in Q3 2025 and $4.1 million in Q4 2024; full-year operating loss was $11.6 million, improved from $14.0 million.

• Net loss from continuing operations for Q4 2025 was $2.8 million, improved from $3.8 million in Q3 and $4.2 million in Q4 2024; full-year net loss was $13.1 million, improved from $15.5 million in 2024.

• Ended 2025 with $7.1 million in cash and cash equivalents, and $0 long-term debt.

Outlook and guidance

• Revenue expected to remain consistent in Q1 2026, with sequential growth anticipated as distribution expands and store count projected to more than double by end of 2026.

• Focus for 2026 is on expanding VLN® retail distribution, launching Pinnacle Pure, increasing marketing support, and adding headcount to support product launches.

• Continued focus on margin expansion, cost efficiency, and capital allocation, with ongoing engagement with FDA and public health stakeholders domestically and internationally.