Cresco Labs reports US$172.8M revenue and US$26M operating cash flow

Operating cash flow reached US$26 million as Cresco Labs Inc. CNSXCL OTCMKTSCRLBF FRA6CQ reported US$172.8 million in third-quarter revenue on Friday. The quarter ended Sept. 30 produced a US$14.5 million net loss, narrower than US$22 million a year earlier.

The Nov. 6 financial statements show cash and equivalents of US$41.2 million at September's end, alongside US$31.4 million in restricted cash. Long-term notes and loans payable, net, increased to US$453.6 million from US$417.1 million at Dec. 31, 2025.

Cresco is a Chicago-based multistate cannabis grower and branded-products company that also operates the Sunnyside dispensary chain.

Its earnings release reports US$21 million in company-defined free cash flow for the September quarter. Adjusted gross margin was 46.8 per cent, while the adjusted EBITDA margin was 20.2 per cent.

Cresco shares closed at C$0.79 in Canada on Nov. 5 at 4 p.m. EST, according to CNSXCL, before the results were released.

Operating Profit Falls Despite Higher Sales

September-quarter revenue increased from US$164.9 million a year earlier, but gross profit barely changed, reaching US$79.5 million against US$79.4 million. Selling, general and administrative expenses increased to US$68.8 million from US$59.2 million, according to the statements.

Operating income fell to US$10.7 million from US$17.8 million in the September quarter. Net interest expense rose to US$15.7 million from US$14.1 million, exceeding operating income before income taxes were applied.

The narrower September-quarter net loss partly reflected a much smaller expense outside operations and interest. Other income was US$181,000, compared with other expense of US$13.8 million a year earlier.

"The Cresco team executed this quarter as we closed an acquisition, improved cultivation, and ramped up a new state, all while keeping the base business running at a high level," Cresco chief executive Charlie Bachtell said in the release.

Adjusted EBITDA, a non-GAAP earnings measure before interest, taxes, depreciation, amortization and specified adjustments, totalled US$35 million in the September quarter. The release identifies acquisition work, preparations for an uplisting and federal reform as sources of one-time and non-recurring administrative costs.

Cresco cautions that its adjusted earnings and free cash flow measures have no standardized definition under U.S. GAAP. They may differ from similarly named measures used by other issuers, limiting direct comparisons of the adjusted figures.

The September-end cash components in the statements total US$72.6 million, below the US$76 million combined headline in the release. The release says its financial information is superseded by the company's financial statements where the two are inconsistent.

Peers Show Different Paths To Cash Generation

The November earnings reports show different levels of cash generation across listed cannabis operators. Trulieve Cannabis Corp. NYSETRLV reported on Nov. 5 September-quarter revenue of US$230 million and operating cash flow of US$74 million.

Trulieve's gross margin was 64 per cent for that quarter. Its results cover medical operations, while earlier periods included the subsequently deconsolidated Harvest business, limiting year-over-year comparisons.

Read more: Trulieve reports US$230M revenue and US$74M operating cash flow

Cronos Group Inc. TSECRON NASDAQCRON reported on Nov. 5 September-quarter revenue of US$63.5 million and gross margin of 50.9 per cent. Cronos attributed growth primarily to flower sales in Israel and Germany, alongside higher Canadian flower and extract sales.

Read more: Cronos Group reports US$63.5M sales as international demand grows

Cresco's next scheduled event is its Nov. 6 earnings webcast at 8:30 a.m. EST, where management will discuss the September-quarter results.