Ascend Wellness Holdings Inc (AAWH) Reports Strong Fiscal Year 2023 Results with Revenue and ...
Net Revenue: Q4 2023 net revenue increased by 25% year-over-year to $140 million, with full-year net revenue up 28% to $519 million.
Adjusted EBITDA: Q4 2023 Adjusted EBITDA rose by 15% year-over-year to $32 million, with a full-year increase of 14% to $107 million.
Cash Flow: AAWH reported its first full year of positive cash from operations and free cash flow, ending Q4 with $73 million in cash and cash equivalents.
Retail and Wholesale Growth: Retail revenue increased by 21% and wholesale revenue by 47% in third-party markets, contributing to the year's success.
Store Expansion: Six new dispensaries opened in 2023, with a total of 35 dispensaries operational after a new opening in Cincinnati, OH post-year-end.
Net Loss: Net loss narrowed to $48.2 million in FY 2023 from $80.9 million in FY 2022, despite a Q4 net loss of $19.3 million.
On March 12, 2024, Ascend Wellness Holdings Inc (AAWH) released its 8-K filing, announcing its financial results for the fourth quarter and full year ended December 31, 2023. AAWH, a vertically integrated multi-state operator in the cannabis industry, focuses on adult-use or near-term adult-use cannabis states in limited license markets. The company's core business includes the cultivation, manufacturing, and distribution of cannabis consumer packaged goods, which it sells through company-owned retail stores and third-party licensed cannabis retail stores. The company generates maximum revenue from the retail product segment.
Fiscal Year 2023 Performance
AAWH's fiscal year 2023 was marked by significant growth, with net revenue reaching $519 million, a 28% increase from the previous year. This growth was driven by the expansion of both retail and wholesale businesses, including a 21% increase in the retail business due to store openings and strategic acquisitions, and a 47% growth in the third-party wholesale business as AAWH increased its presence in New Jersey, Massachusetts, and Illinois.
Despite challenges such as cultivation issues in Franklin, New Jersey, and initial pressure on Illinois retail from the start of neighboring Missouri's recreational sales, AAWH achieved an Adjusted EBITDA of approximately $107 million, reflecting a 14% growth. The company's strategic initiatives and commitment to execution ensured strong financial performance, with robust geographic diversification and successful brand performance.
Financial Achievements and Challenges
AAWH's financial achievements in 2023 are particularly noteworthy, as they represent the company's first full year generating positive cash from operations and free cash flow. The company ended the year with $73 million in cash and cash equivalents, a testament to its improved financial health and operational efficiency.
However, the company did face challenges, including a net loss of $19.3 million in Q4 2023, compared to a net loss of $15.1 million in Q4 2022. The full-year net loss also stood at $48.2 million, although this was an improvement from the $80.9 million net loss in FY 2022. These losses highlight the competitive and capital-intensive nature of the cannabis industry, where companies like AAWH must balance growth investments with profitability.
Key Financial Metrics
Important metrics from AAWH's financial statements include a 25% year-over-year increase in Q4 net revenue and a 28% increase for the full year. Adjusted EBITDA for Q4 grew by 15% year-over-year, and by 14% for the full year. The company's balance sheet shows $72.5 million in cash and cash equivalents as of December 31, 2023, with net debt standing at $236.2 million. Cash flow from operations was $54.5 million for the full year, and free cash flow reached $30.3 million, excluding the benefit of $20.8 million in cash received from an Employee Retention Tax Credit.
Abner Kurtin, Executive Chairman of AAWH, expressed gratitude to stakeholders for the strong Q4 and full year 2023, highlighting the company's excitement about future prospects and positive changes in federal cannabis reform. John Hartmann, Chief Executive Officer, emphasized the company's impressive financial success and growth fueled by expansion in retail and wholesale businesses. Mark Cassebaum, Chief Financial Officer, noted the significance of generating meaningful cash from operations and free cash flow, which is crucial as the company begins discussions to refinance its term loan due in August 2025.
AAWH's performance in 2023 demonstrates the company's ability to navigate a dynamic market and expand its operations effectively. The company's focus on disciplined growth and investment in high-return opportunities positions it well for future success in the evolving cannabis industry.
For more detailed information, investors and interested parties are encouraged to review the full earnings release and financial statements available on the company's website and the SEC's EDGAR system.
Ascend Wellness Holdings Inc's full earnings report and additional details can be found on the Investor Relations section of AAWHs website at https://awholdings.com/investors/, the SECs EDGAR system, and Canadas SEDAR+ system.
Explore the complete 8-K earnings release (here) from Ascend Wellness Holdings Inc for further details.
This article first appeared on GuruFocus.
