Net revenue in Q3 2024 increased by 38% year-over-year to $34.3 million
Spinach® Becomes the Number One Cannabis Brand in Canada1
Industry-leading balance sheet with $862 million in cash and cash equivalents
TORONTO, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos” or the "Company”) today announced its 2024 third quarter business results.
"Our results this quarter demonstrate that our long-term strategy is working. With record net revenue and a disciplined approach to operating expenses, Cronos operates more efficiently and effectively than ever before, and we anticipate long-term margin improvement. Our consolidation of Cronos Growing Company has further strengthened our supply chain, which we anticipate will lead to improved margins and allow us to meet the increasing global demand for high-quality cannabis. With an industry-leading balance sheet, we are well-positioned to expand into new legal markets and drive future growth opportunities,” said Mike Gorenstein, Chairman, President and CEO, Cronos.
"As international demand continues to rise, particularly in markets like Germany, the UK, and Australia, the investments we've made in our infrastructure and global partnerships are paying off,” continued Mr. Gorenstein. "In the third quarter, our award-winning Spinach® brand rose to become the best-selling cannabis brand in the Canadian adult-use market and our Peace Naturals® brand held a top spot in the Israeli medical market. Our brands' market share out-performance represents our relentless commitment to quality, innovation, and bringing differentiated products to the global cannabis market. The progress we've made reinforces our leadership in key categories and markets, and we remain focused on continuing to innovate and bring premium products to consumers.”
1 Hifyre Retail Analytics - National Retail Dollar Sales by Brand in Canada - August 2024.
Consolidated Financial Results
On June 20, 2024 the Company made an additional investment in Cronos Growing Company (" Cronos GrowCo") to fund the expansion of cultivation operations. Cronos also obtained majority control of the board of directors of Cronos GrowCo and began consolidating Cronos GrowCo's results as of July 1, 2024. Prior to this date, the Company's investment in Cronos GrowCo consisted of an investment accounted for under the equity method and loans receivable from Cronos GrowCo.
In the second quarter of 2023, the Company exited its U.S. hemp-derived CBD operations. The exit of the U.S. operations represented a strategic shift, and as such, qualifies for reporting as discontinued operations in the condensed consolidated statements of net income (loss) and comprehensive income (loss). Prior period amounts have been reclassified to reflect the discontinued operations classification of the U.S. operations.
The tables below set forth our condensed consolidated results of continuing operations, expressed in thousands of U.S. dollars for the periods presented. Our condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods.
| (in thousands of USD) | Three months ended September 30, | Change | Nine months ended September 30, | Change | ||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||||||||||
| Cronos net revenue, excluding Cronos GrowCo net revenue(i) | $ | 29,996 | $ | 24,810 | $ | 5,186 | 21 | % | $ | 83,046 | $ | 63,326 | $ | 19,720 | 31 | % | ||||||||||||||
| Cronos GrowCo net revenue(ii) | 4,268 | - | 4,268 | N/A | 4,268 | - | 4,268 | N/A | ||||||||||||||||||||||
| Net revenue | $ | 34,264 | $ | 24,810 | $ | 9,454 | 38 | % | $ | 87,314 | $ | 63,326 | $ | 23,988 | 38 | % | ||||||||||||||
| Cost of sales | 30,341 | 20,124 | 10,217 | 51 | % | 72,216 | 52,614 | 19,602 | 37 | % | ||||||||||||||||||||
| Inventory write-down | 312 | 716 | (404 | ) | (56 | )% | 707 | 716 | (9 | ) | (1 | )% | ||||||||||||||||||
| Gross profit | $ | 3,611 | $ | 3,970 | $ | (359 | ) | (9 | )% | $ | 14,391 | $ | 9,996 | $ | 4,395 | 44 | % | |||||||||||||
| Gross margin(iii) | 11 | % | 16 | % | N/A | (5) pp | 16 | % | 16 | % | N/A | -pp | ||||||||||||||||||
| Inventory step-up recorded to cost of sales | 7,116 | - | 7,116 | N/A | 7,116 | - | 7,116 | N/A | ||||||||||||||||||||||
| Adjusted Gross Profit(iv) | $ | 10,727 | $ | 3,970 | $ | 6,757 | 170 | % | $ | 21,507 | $ | 9,996 | $ | 11,511 | 115 | % | ||||||||||||||
| Adjusted Gross Margin(v) | 31 | % | 16 | % | N/A | 15pp | 25 | % | 16 | % | N/A | 9pp | ||||||||||||||||||
| Net income (loss) | $ | 7,324 | $ | (1,590 | ) | $ | 8,914 | N/M | $ | (3,919 | ) | $ | (25,288 | ) | $ | 21,369 | 85 | % | ||||||||||||
| Adjusted EBITDA(iv) | $ | (6,019 | ) | $ | (15,187 | ) | $ | 9,168 | 60 | % | $ | (27,739 | ) | $ | (46,774 | ) | $ | 19,035 | 41 | % | ||||||||||
| Other Data | ||||||||||||||||||||||||||||||