Ascend Wellness Holdings Reports Q4 and FY 2023 Earnings

The TDR Three Key Takeaways for Ascend:

  1. AWH posts 25% YoY net revenue increase in Q4.
  2. Full year positive cash flow marks a company milestone.
  3. Expansion and strategic acquisitions fuel Ascend’s growth.

Ascend Wellness Holdings, Inc. (CSE: AAWH.U, OTCQX: AAWH), a multi-state cannabis operator, reported its financial results for the fourth quarter and full year ended December 31, 2023. With operations across seven states, Ascend’s strategic positioning has yielded significant financial growth and operational expansion throughout the year.

For the fourth quarter, Ascend announced a net revenue increase of 25% year-over-year to $140 million, coupled with a 15% year-over-year increase in adjusted EBITDA to $32 million. This growth reflects the company’s effective scaling and operational efficiency across its diversified portfolio. The full year echoed this positive trajectory, with net revenue surging by 28% to $519 million and adjusted EBITDA up 14% to $107 million. Notably, 2023 marked the first full year of positive cash from operations and free cash flow for AWH, underlining the company’s successful transition to a cash-generative operational model.

Ascend’s balance sheet as of December 31, 2023, showed a solid financial position with $73 million in cash and cash equivalents. The company generated $16.7 million in cash from operations during the fourth quarter, emphasizing the effective management and operational resilience. Throughout the year, AWH generated $54.5 million in cash from operations, with a significant $30.3 million in free cash flow, excluding benefits from an Employee Retention Tax Credit.

Operational highlights for the year included the opening of six new dispensaries across multiple states, further expanding Ascend’s retail footprint. The company also ventured into Maryland, marking its entrance into a seventh state. Ascend’s wholesale division experienced substantial growth, doubling the pounds of product sold year-over-year and increasing gross wholesale revenue across all markets. Brand strength was evident as Simply Herb and Ozone rose in market rankings within their respective states, showcasing Ascend’s successful product strategy.

Management changes throughout the year, including the appointment of John Hartmann as CEO. In the fourth quarter, Ascend faced challenges in retail sales in Illinois but offset these with growth in new stores and wholesale revenue in New Jersey, Massachusetts, and Michigan. The company’s strategic acquisitions, including four dispensaries in Maryland, have contributed to its robust year-over-year net revenue increase. Despite cultivation challenges in Franklin, New Jersey, and competitive pressures in Illinois, the company’s focus on operational efficiency and market expansion has been key drivers in the financial results.

Ascend’s financial and operational achievements in 2023 are signs of a company on a positive trajectory, marked by strategic growth, operational  and financial discipline. Want to keep up to date with all of TDR’s research, subscribe to our daily Baked In newsletter.   

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