Charlotte's Web Reports Year-Over-Year Growth For Q2 2025

Executive Summary

• Charlotte's Web Holdings reported Q2 2025 revenue of $12.8 million, a 4.2% year-over-year increase from $12.3 million in Q2 2024, marking the second consecutive quarter of YoY growth.
• The company achieved significant margin expansion, with Gross Profit rising to $6.0 million (46.8% margin) compared to $2.6 million (21.0% margin) in the prior year period, driven by the removal of a one-time inventory provision in 2024 and operational improvements.
• Net loss narrowed to $6.3 million ($0.04 per share) from $11.1 million ($0.07 per share) in Q2 2024, while Adjusted EBITDA improved to $(3.6) million from $(5.2) million, supported by a 31.7% reduction in SG&A expenses.

Key Details

• Revenue: $12.8 million for Q2 2025, up 4.2% from $12.3 million in Q2 2024.
• Gross Profit: $6.0 million (46.8% of revenue) in Q2 2025 vs. $2.6 million (21.0% of revenue) in Q2 2024.
  • Q2 2024 included a $3.8 million non-cash inventory provision related to a wholesale hemp biomass transaction.
  • Excluding inventory provisions, Q2 2024 Adjusted Gross Profit was $6.4 million (52.2% margin).
• Operating Expenses: SG&A expenses were $10.1 million, a 31.7% decrease from $14.7 million in Q2 2024.
  • Decrease attributed to $1.9 million reduction in amortization (termination of MLB Promotional Rights Agreement) and lower personnel costs.
• Net Loss: $(6.3) million or $(0.04) per share (basic and diluted) in Q2 2025, compared to $(11.1) million or $(0.07) per share in Q2 2024.
• Adjusted EBITDA: $(3.6) million in Q2 2025, a 30.8% improvement from $(5.2) million in Q2 2024.
• Cash Position: Cash and cash equivalents were $15.3 million as of June 30, 2025. Working capital was $29.4 million.
• Cost Savings & Outlook:
  • In-house gummy production (Brightside™) is fully internalized, anticipating ~$3 million in annualized cost savings.
  • Additional expense reduction measures implemented post-Q2 are expected to reduce annualized costs by ~$9 million in 2026.
  • Cash burn reduced by 52.0% year-over-year for the first half of 2025.
• Product & Operational Updates:
  • Brightside™ THC Gummies: Launched in Q2 using patented TiME INFUSION® technology; multiple SKUs sold out over Memorial Day weekend, exceeding forecasts.
  • Botanical Diversification: Expanded into CBN (Stay Sleep Gummies, now 2nd best-selling) and CBG (Focus & Attention Gummies) categories.
  • Functional Mushrooms: Portfolio includes formulations for Focus, Stress Support, Energy, and Muscle Recovery using Lion's Mane, Reishi, Cordyceps, and Turkey Tail.
  • Omnichannel: Expanded presence on TikTok Shop, Amazon, Walmart.com, and Faire.
  • DeFloria Clinical Progress: FDA-cleared Phase 2 clinical trials commenced for AJA001 Oral Solution to treat irritability associated with autism spectrum disorder (ASD). Charlotte's Web retains exclusive manufacturing rights.
• Balance Sheet Highlights (June 30, 2025):
  • Total Assets: $88.0 million.
  • Total Liabilities: $73.0 million (including $62.7 million in long-term liabilities).
  • Shareholders' Equity: $14.9 million.

Notable Quotes

• Bill Morachnick, CEO: "Q2 marked another step forward in our turnaround as Charlotte's Web again delivered both sequential and year-over-year growth, demonstrating continued progress in revenue and strategic execution across omnichannel, innovation, and cost structure... With operational momentum building and strong early traction across new product categories, we remain confident in our ability to execute and deliver on our 2025 outlook."
• Erika Lind, CFO: "Our revenue growth was accompanied by rigorous SG&A discipline that reduced second quarter expenses 31.7% year-over-year. Post-quarter, we've implemented additional measures to reduce our annualized run rate by more than $6 million in 2026. Combined with our transition to in-house manufacturing, which will benefit profit margins over time, this disciplined cost management and modest revenue growth positions us to approach positive cash flow."