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Verano Holdings’ Revenue Hits $938M in 2023 Earnings

The TDR Three Key Takeaways:

  1. Verano Holdings Records $938M Revenue in 2023: Verano Holdings achieved a significant revenue increase in 2023, reaching $938 million, which is a 7% rise from the previous year, demonstrating the company’s growth in the cannabis industry.
  2. Profitability Remains a Challenge for Verano Holdings: Despite the increased revenue, Verano Holdings reported a net loss of $73 million in the fourth quarter and a total net loss of $113 million for the year. This underscores the challenges of managing operational costs and staying profitable in a competitive market.
  3. Caution Advised Over Adjusted EBITDA: Verano Holdings’ reliance on Adjusted EBITDA to represent its financial health, especially in light of its net losses, suggests that investors should scrutinize the company’s financials thoroughly. Adjusted EBITDA may not fully reflect the company’s financial state due to the exclusion of certain expenses.

Verano Holdings(Cboe CA: VRNO) (OTC: VRNOF), a multi-state cannabis operator, disclosed its financial results for the fourth quarter and the full fiscal year ending December 31, 2023 this morning. The company reported a record revenue of $938 million for the year, a 7% increase from the previous year’s $879 million. It also saw a 16% rise in net cash provided by operating activities to $110 million and generated $73 million in free cash flow for 2023, meeting its guidance.

For the fourth quarter of 2023, Verano achieved a revenue of $237 million, up 5% from the same period the previous year, albeit a 1% decrease compared to the preceding quarter. The gross profit for the quarter was $118 million, which is 50% of the revenue, while the full-year gross profit reached $475 million or 51% of revenue. The company registered a net loss of $73 million in the fourth quarter, or 31% of the revenue, culminating in a total yearly net loss of $113 million, or 12% of the revenue. Despite these losses, Verano reported an Adjusted EBITDA of $73 million for the fourth quarter and $305 million for the full year, highlighting a key aspect of its financial health. The selling, general, and administrative (SG&A) expenses for the year stood at $332 million, 35% of the revenue, inline with expectations. The capital expenditures for the year were $36 million which were also inline with previous estimates. 

My Take as an Analyst

Verano’s revenue increase and significant free cash flow generation in 2023 are positive indicators of its operational strength and market presence. However, the net loss and reliance on adjusted EBITDA figures warrant caution. Adjusted EBITDA, while useful for evaluating a company’s operating performance, can sometimes obscure the true financial condition by excluding certain expenses deemed non-recurring or unrelated to core operations. This reliance on adjusted figures suggests investors should carefully consider all aspects of the financials when assessing the company’s performance.

The spread between the company’s revenue growth and its net loss highlights the challenges of managing operational costs and achieving profitability. As Verano navigates the competitive cannabis market, improving its bottom line by controlling expenses and enhancing operational efficiency will be crucial. The industry’s complex regulatory environment can significantly impact business operations. For Verano, sustaining revenue growth while effectively managing its cost structure to move towards profitability remains a critical path forward. Want to keep up to date with all of TDR’s research, subscribe to our daily Baked In newsletter.   


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