Cresco Labs (CL) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue reached $165 million, with adjusted gross profit of $80.5 million and adjusted EBITDA of $40 million; operating cash flow was $6 million.

• Maintained #1 market share in several billion-dollar cannabis markets, operating 71 retail stores as of September 30, 2025.

• Completed debt refinancing, reducing debt size, extending maturities to 2030, and improving financial flexibility.

• Strategic exit from California operations to focus on core, profitable markets and reduce complexity.

• Entered the German market with Cresco-branded flower, marking the first step in international expansion.

Financial highlights

• Q3 2025 net revenue was $164.9 million, up 0.8% sequentially; adjusted gross margin was 48.8%, and adjusted EBITDA margin was 24.1%.

• Free cash flow for Q3 2025 was negative $1 million, but year-to-date free cash flow reached $20 million, with $45 million in operating cash flow.

• Ended Q3 2025 with $82 million in cash after paying down $35 million in debt principal.

• SG&A expenses were $52 million (31.3% of revenue); adjusted SG&A was $47.7 million (28.9% of revenue).

• Net loss totaled $22 million, including a $16 million loss from debt extinguishment and $2 million in non-cash impairment charges.

Outlook and guidance

• Q4 revenue expected to remain roughly in line with Q3, with expanded cultivation in Illinois offsetting price compression and increased retail competition.

• Margin expansion in 2026 expected from top-line growth and operating leverage; continued price compression anticipated as a headwind.

• Management expects to outperform the market and create long-term shareholder value through scale, efficiency, and disciplined execution.

• Expansion into new markets and product launches are expected to drive future growth.

• Exit from California will reduce consolidated revenue by less than 3% going forward.