High Tide (HITI) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 revenue of CAD 142.5 million, up 11% year-over-year and 3% sequentially, with brick-and-mortar retail contributing 95% of revenue and an annual run rate of CAD 570 million.

• Same-store sales rose 5% year-over-year in Q1, the fastest pace in four quarters, and have increased 142% since October 2021.

• Cabana Club loyalty program surpassed 1.76 million members in Canada, up 33% year-over-year, with ELITE memberships up 153% and a new target of 2.5 million members.

• Expanded store count to 194 locations, aiming for 300 in coming years, with five new stores opened in Q1 and three more post-quarter.

• Global Cabana Club membership exceeded 5.66 million after international expansion.

Financial highlights

• Q1 revenue reached CAD 142.5 million, up 11% year-over-year and 3% sequentially.

• Gross margin was 25%, down from 28% a year ago, due to lower e-commerce margins and illicit market impact.

• Adjusted EBITDA was CAD 7.1 million, down 32% year-over-year and 14% sequentially, reflecting investments in growth and e-commerce strategy.

• Free cash flow was negative CAD 1.9 million in Q1 due to working capital investments, but trailing 12-month free cash flow was CAD 16.5 million, up 45% year-over-year.

• Net loss of CAD 2.7 million, compared to break-even last year; adjusted net income was CAD 0.2 million excluding non-cash impairment.

Outlook and guidance

• Plans to open 20-30 new stores in Canada in 2025, with three already opened and over a dozen under development, aiming for 300 stores long-term.

• Expects e-commerce segment to be revenue neutral in six months and EBITDA neutral in one year.

• Maintains expectation to be free cash flow positive for the fiscal year despite quarterly variability.

• Raised Canadian Cabana Club membership target to over 2.5 million.

• Actively pursuing entry into the German medical cannabis market, with ongoing partner negotiations and alternative structures after pausing Purecan GmbH acquisition.