• Net Revenue (Q4 2024): $257.7 million, a 3.7% increase year-over-year.
• Net Revenue (Full Year 2024): $920 million, representing 1.3% growth compared to the prior year.
• Gross Profit (Q4 2024): $68.8 million, a 20% increase year-over-year.
• Gross Margin (Q4 2024): 26.7%, a 360 basis points improvement.
• Gross Margin (Full Year 2024): 26.1%, a 520 basis points improvement compared to 2023.
• Free Cash Flow (Q4 2024): $11.6 million, positive for the quarter.
• Free Cash Flow (Full Year 2024): $8.9 million, exceeding guidance and a $70 million improvement compared to 2023.
• Net Income (Q4 2024): Negative $67.2 million, primarily due to a noncash fair value adjustment.
• Cannabis Segment Revenue Growth (Q4 2024): 16.5%, including contributions from the Indiva acquisition.
• Liquor Segment Revenue Decline (Q4 2024): 3.4% compared to Q4 2023.
• Cannabis Retail Net Revenue (Q4 2024): $83.2 million, a 10.7% increase year-over-year.
• Same-Store Sales Growth (Cannabis Retail Q4 2024): 6.3%.
• Cash Position (End of 2024): $218 million in unrestricted cash with zero outstanding debt.

• Warning! GuruFocus has detected 2 Warning Sign with SNDL.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SNDL Inc (NASDAQ:SNDL) reported record full-year net revenue, gross profit, and gross margin, along with positive cash flow and free cash flow.
• The Cannabis segment showed strong momentum with steady revenue gains for the 12th consecutive quarter, growing well ahead of market averages.
• SNDL Inc (NASDAQ:SNDL) achieved all-time high gross profit and gross margin for both the full year and the fourth quarter, driven by productivity and cost optimization initiatives.
• The company achieved positive free cash flow for the first time, exceeding their guidance with a positive $9 million.
• Strategic acquisitions, such as Indiva, positioned SNDL Inc (NASDAQ:SNDL) as the largest manufacturer of infused edibles in Canada, enhancing long-term growth potential.

Negative Points

• The Liquor segment experienced a revenue decline due to a market slowdown, impacting overall consolidated results.
• A $65.7 million noncash negative fair value adjustment to the SunStream investment affected adjusted operating income.
• The Liquor Retail segment faced continuous market headwinds, resulting in a 3.4% revenue decline compared to the previous year.
• The company reported a negative Q4 net income of $67.2 million, primarily driven by the SunStream fair value adjustment.
• SNDL Inc (NASDAQ:SNDL) anticipates flat revenue growth for the Liquor segment in 2025, reflecting ongoing market challenges.

Q & A Highlights

Q: Could you discuss the outlook for the Liquor Retail segment, given the weak same-store sales performance? A: Alberto Paredero-Quiros, CFO, explained that the slowdown in liquor sales is a global trend impacting the market. For 2025, they anticipate flat revenue growth, with long-term growth expected at 1% to 1.5%. Volume declines are expected to be offset by pricing adjustments.

Q: Can you elaborate on the operational challenges faced by your US investments and whether they might need additional capital? A: Zachary George, CEO, noted that while they see opportunities for improvement, their current structure prevents plant-touching activities. They believe in the long-term potential of their investments, particularly in the Florida market, and are focused on building infrastructure in Canada and exploring US opportunities.

Q: What is the rationale behind the CSE listing application, and does it relate to potential US plant-touching activities? A: Zachary George, CEO, stated that while the CSE listing provides optionality for growth in the US and internationally, no corporate decision has been made regarding plant-touching activities. The listing is part of their strategy to explore various growth avenues.

Q: What products are driving growth in the Cannabis Operations segment, excluding Indiva's contributions? A: Alberto Paredero-Quiros, CFO, highlighted strong growth across all product categories, particularly pre-rolls, vapes, and edibles. Increased distribution and improved product quality are key drivers, along with momentum in international sales and B2B business.

Q: Given the focus on discount retail in Canadian cannabis, will you continue employing multiple banners or convert more to Value Buds? A: Zachary George, CEO, explained that while they will continue converting banners to improve returns, they also remain open to acquiring additional banners. They believe in consolidation and have a pipeline for both organic and inorganic retail development.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.