TerrAscend 2023: Strong Revenue Uplift and Margin Expansion

The TDR Three Key Takeaways for TerraAscend

  1. TerrAscend’s 2023 marked by a significant 28% year-over-year revenue increase, reaching $317.3 million.
  2. Gross profit margin improved dramatically by 930 basis points, achieving 50.3% for the year.
  3. First full year of positive cash flow from operations and free cash flow, showcasing operational efficiency.

TerrAscend (TSX: TSND, OTC: TSNDF) a North American cannabis company, announced its financial results for both the fourth quarter and full year of 2023, demonstrating a year of substantial growth and profitability. Throughout 2023, the company made notable progress improving margins, optimizing its balance sheet, reducing interest expenses, and achieving positive free cash flow—all while driving a significant 28% revenue increase. 

In 2023, TerrAscend posted a record net revenue of $317.3 million, a 28% increase compared to the previous year. This growth was primarily driven by robust sales in key markets, including adult-use sales in New Jersey and Maryland. The company also reported a gross profit margin of 50.3%, reflecting a 930 basis-point improvement from the prior year, attributed to yield improvements, margin optimization efforts, and the successful integration of acquisitions.

Adjusted EBITDA from continuing operations rose by 77.1% year-over-year to $68.8 million, with an adjusted EBITDA margin of 21.7%, highlighting the company’s improved operational efficiency and cost management. Furthermore, 2023 marked TerrAscend’s first full year of positive cash flow from continuing operations ($31.1 million) and free cash flow ($23.4 million), signaling a turning point in its financial health and operational capabilities.

The fourth quarter of 2023 also saw strong performance, with net revenue reaching $86.6 million, a 25.5% increase over the same period in the previous year. The gross profit margin for the quarter was 48.2%, and the adjusted EBITDA from continuing operations was $19.6 million, indicating continued operational success and financial resilience.

Operational highlights from 2023 include the expansion of TerrAscend’s retail footprint in Maryland, the introduction of new product lines in New Jersey and Maryland, and strategic acquisitions that have bolstered the company’s market presence. The company also made significant progress in reducing debt and optimizing its cost structure, further strengthening its Balance Sheet.

Looking ahead, TerrAscend’s executive team is focused on capitalizing on the current market environment and pursuing growth opportunities in new and existing markets. We look forward to watching what 2024 brings. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.   

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