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What were the key takeaways from SNDL’s earnings call?

- **Record Free Cash Flow**: $16.7M Q3, first positive YTD ($7.7M) in company history.
- **Cannabis Growth**: 50% revenue jump in Operations, edibles market leadership, $4.2M intl sales.
- **Margin Expansion**: Liquor Retail gross margin 26.3% (new high), Cannabis Retail +90 bps to 24.1%.
- **Non-Cash Impact**: $11.9M charges (share comp, inventory/write-offs) vs. +43% adjusted operating income.
- **Intl Expansion**: Atholville facility to supply >$15M/month in 2026, targeting Florida/Texas medical markets.

**【CEO Summary Section】**
- Reported record quarterly free cash flow of $16.7 million, achieving positive cumulative free cash flow of $7.7 million year-to-date for the first time in company history.
- Combined Cannabis segment revenue grew 15% year-over-year, driven by double-digit growth in edibles and international sales reaching $4.2 million.
- Operational improvements include 80 basis point gross margin expansion in Liquor Retail (26.3% new record) and $4 million reduction in G&A expenses.
- Non-cash charges of $11.9 million (share-based comp, inventory/write-offs) impacted reported operating loss, but adjusted operating income improved 43% YoY.
- Accelerated store expansion with 5 new Cannabis stores and 2 Wine & Beyond stores scheduled for Q4 opening.

**【CFO Financial Commentary】**
- Net revenue $244 million (+3.1% YoY), driven by Cannabis segments offsetting Liquor Retail headwinds.
- Gross profit $64.2 million (+1.9% YoY), impacted by $3.9 million Cannabis inventory adjustments (160 bps margin drag).
- Free cash flow highlights: Q3 $16.7 million vs. $9.2 million prior year; YTD $7.7 million vs. -$10.3 million.
- Cannabis Operations revenue up 50% YoY ($37.4 million), but adjusted operating loss $4.8 million due to $6.6 million non-cash adjustments.
- Liquor Retail operating income $11.2 million (-$0.6 million YoY) due to lapping $1.2 million asset reversal.
- Cannabis Retail operating income $9.1 million (+100% YoY), supported by 4.8% same-store sales growth.

**【Q&A Key Highlights】**
- **Cannabis Operations Gross Margin**: CFO expects 25%+ going forward (excluding one-time $3.9M inventory write-off in Q3).
- **International Sales Growth**: Q3 $4.2 million, with 2026 targets of >$15M/month from Atholville facility (15,000kg/month capacity).
- **1CM Transaction Update**: Regulatory review in Ontario delayed beyond prior expectations; no new info to share.
- **Cannabis Retail Strategy**: Shifting focus from top-line growth to margin optimization (90 bps gross margin expansion YoY).
- **Share-Based Compensation**: 121% share price increase triggered $6.8M non-cash charge, impacting Corporate segment costs.


SNDL Inc. (SNDL) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SNDL

SNDL fundamentals

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