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 an annual run rate of approximately CAD 570 million and bricks-and-mortar segment contributing 95% of revenue.

• Maintained status as the highest revenue-generating cannabis retailer in Canada, with 194 stores and plans to reach 300 locations, opening five new stores in Q1 and three more post-quarter.

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

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

• Expanded Cabana Club globally, now exceeding 5.66 million members worldwide.

Financial highlights

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

• Brick-and-mortar revenue up 17% year-over-year; same-store sales up 5% year-over-year.

• Consolidated gross margin was 25% in Q1, down from 28% a year ago and 26% sequentially.

• Adjusted EBITDA was CAD 7.1 million, down 32% year-over-year and 14% sequentially due to accelerated store growth and global e-commerce expansion.

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

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 new stores to mature and drive future EBITDA records.

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

• Targeting 2.5 million Cabana Club members in Canada and at least 15% market share long-term.

• Anticipates global loyalty program expansion to be revenue neutral in six months and EBITDA neutral in one year.