Cresco Labs Posts Strong Quarter: Revenue Jumps 17.7% To $210M Beating Estimates, Positive Adjusted EBITDA, Reaffirms Guidance

Multi-state cannabis operator Cresco Labs Inc. CL CRLBF announced its second-quarter financial results on Friday with revenue of $210.0 million beating Seeking Alpha estimates of $195.29 million. The revenue grew 17.7% from the previous quarter, and 122.8% year-over-year.

Second Quarter 2021 Financial Highlights

• Gross profit excluding fair value markup for acquired inventory of $107.0 million, or 51.0% of revenue, an increase of 22.2% quarter-over-quarter and 233.3% year-over-year;
• Net Income of $2.7 million, an increase of $26.8 million quarter-over-quarter and $44.4 million year-over-year ;
• Adjusted EBITDA of $45.5 million, an increase of 30.1% quarter-over-quarter ;
• Record net wholesale revenue of $108.7 million, an increase of 13.7% quarter-over-quarter and 97.9% year-over-year ;
• Record retail revenue of $101.3 million from 33 stores, an increase of 22.3% quarter-over-quarter and 157.6% year-over-year;
• As of June 30, 2021, current assets were $293.7 million, including cash and cash equivalents of $131.0 million; the Company had working capital of $99.1 million and term loan debt, net of issuance costs, of $189.4 million;

Financial Outlook

The Company reaffirms the previously provided guidance of:

• Annualized revenue run-rate of $1 billion by the end of 2021
• Gross profit margins in excess of 50% in the remaining two quarters of 2021
• Adjusted EBITDA margin run-rate of at least 30% by the end of 2021

Management Commentary

“Q2 was a strong quarter of head down execution at Cresco Labs and once again we are hitting our stride as we enter the next phase of growth,” Charles Bachtell, co-founder and CEO of Cresco Labs stated. “During the quarter we continued to invest in infrastructure, operationalized new assets, and deployed our proven playbook to build top positions in the most important U.S. cannabis markets. We are very proud of the record performance this quarter, driven primarily by organic growth, and we're even more excited about what lies ahead as we begin recognizing contributions from growth initiatives initiated over the last 18 months."

Price Action

Cresco Labs’ shares closed Thursday’s market session 0.64% higher at $10.67 per share.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash