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Ascend Wellness Holdings, Inc. — Third Quarter 2026 Earnings Summary

AAWH

  • Financial Performance:

    • Net revenue reached $130.0 million, representing a 4.2% year-over-year increase and a 3.1% sequential increase from Q2 2026 ($126.1 million).
    • Retail revenue was $97.8 million, up 5.5% sequentially and accounting for 75.2% of total net revenue.
    • Wholesale revenue was $32.2 million, a 3.6% sequential decrease driven by a work stoppage at the Barry, Illinois facility and lower pricing.
    • GAAP net loss was $28.0 million for the quarter, compared to a $9.8 million loss in Q2 2026 (which included a $14.8 million tax reserve release).
    • Adjusted Gross Profit was $62.9 million, resulting in an Adjusted Gross Profit Margin of 48.4%, an increase of 220 basis points sequentially.
    • Adjusted EBITDA was $31.1 million, up from $29.1 million in Q2 2026, with an Adjusted EBITDA Margin of 23.9%.
    • Net cash provided by operating activities was $5.4 million, inclusive of a $19.1 million semi-annual interest payment, compared to a $2.0 million net cash usage in Q3 2025.
    • Free Cash Flow was $2.7 million for the quarter.
    • Cash and cash equivalents totaled $63.6 million as of September 30, 2026.
    • Net Debt was $260.4 million as of September 30, 2026.
    • Capital expenditures were $4.8 million in Q3 2026, with $15.7 million year-to-date; full-year 2026 capex is expected to be approximately $20 million.

  • Guidance and Future Outlook:

    • For Q4 2026, the Company anticipates a 1% to 2% increase in revenue.
    • Adjusted EBITDA Margin for Q4 2026 is expected to remain consistent with the 23.9% reported in Q3 2026.
    • Management expects retail growth to be a meaningful source of Adjusted EBITDA and cash flow growth into 2027.

  • Business Segments and Product Lines:

    • The Company opened five new dispensaries in Q3 2026, bringing the total retail footprint to 61 stores, exceeding the year-end target of 60.
    • New store openings include Ascend of Evesham (NJ), Ascend Lewis Center (OH), a partner store in Plano (IL), and two stores in Worcester and Shrewsbury (MA) under a consulting agreement pending acquisition closing.
    • Total retail transactions increased 6.0% sequentially and 14.9% year-over-year to approximately 1.7 million, a record high.
    • Transactions in New Jersey locations increased 18% sequentially and 37% year-over-year.
    • The Company launched 103 new products, including the Ozone Signature premium flower lineup and Effin' Tabs precision-dosed THC tablets.
    • New customer traffic increased 19% sequentially across the retail footprint.
    • Loyalty members accounted for over 86% of transactions, with 32% of new customers enrolling in the program.
    • Ascend Pay adoption reached 11.4% of transactions.

  • Market and Competitive Landscape:

    • Ascend maintains the number two brand house position by sales and units across Illinois, New Jersey, and Massachusetts combined.
    • The Company's share in New Jersey increased approximately 14% sequentially.
    • The Ozone brand held the number three position in dollar share and number one in units across the core markets.
    • The Company entered a capital-light brand licensing agreement with Atlantic Cultivation to bring High Wired and Ozone Liquid Diamonds products to Canadian shelves in Q1 2027.

  • Risks and Challenges:

    • Continued pricing headwinds and price compression impacted the business.
    • A work stoppage at the Barry, Illinois facility affected deliveries in July.
    • The closing of the Massachusetts acquisition and the extension of medical licenses to all state stores are pending regulatory approval.
    • Future results depend on broader cannabis rescheduling and regulatory developments required for a potential listing on a major U.S. exchange.

  • Management Commentary and Tone:

    • CEO Sam Brill stated that growth strategy drove results, noting revenue returned to year-over-year growth and retail sales grew as a share of total revenue.
    • CFO Roman Nemchenko highlighted that scale and profitability are moving together, with cash discipline showing results despite a $19.1 million interest payment.
    • President Frank Perullo noted that sustained investment in operations has improved product quality, market share, and revenue per gram.
    • Management expressed confidence in the retail densification strategy and the potential for international expansion via the Canadian licensing deal.

  • Other Key Points:

    • Stockholders approved a reverse stock split of Class A common shares at a special meeting on August 28, 2026, to support a potential uplisting to a major U.S. exchange.
    • The Company closed $11 million in non-dilutive mortgage loans with CF Bank, secured by five properties, carrying an 8.5% annual interest rate and maturing in October 2031.
    • Proceeds from the mortgage loans will support retail expansion and accretive acquisition opportunities.
    • The retail footprint expanded from 39 to 61 stores since August 2024, a net increase of approximately 60%.