Glass House Brands Reports Third Quarter 2025 Financial Results

Executive Summary

• Glass House Brands reported Q3 2025 revenue of $38.4 M, down sharply from $63.8 M YoY and below prior‑year guidance, with Adjusted EBITDA of –$2.3 M (vs. +$20.4 M YoY).
• Equivalent dry pound production was 123,986 lb (above guidance but ~45% lower than Q3 2024), while cost per pound rose to $128 (up from $91 in Q2 2025).
• The company completed a $77.5 M preferred‑equity refinancing (Series E) and announced continued greenhouse build‑out, targeting full production capacity by Q1 2026.

Key Details

• Revenue: $38.4 M (guidance $35–$38 M); YoY –40%; down from $59.9 M in Q2 2025.
• Gross Profit Margin: 31% (down from 52% YoY).
• Adjusted EBITDA: –$2.3 M (vs. +$20.4 M YoY).
• Operating Cash Flow: –$5.1 M (vs. +$13.2 M YoY).
• Cash Position: $29.8 M at quarter‑end (down from $44.2 M end of Q2 2025).
• Production: 123,986 lb dry equivalent (guidance 95–100 k lb); YoY –46%; cost per pound $128 (up from $91 in Q2 2025).
• Segment Revenue:
• Retail: $12.3 M (↑10% YoY) – margin 50%.
• Wholesale Biomass: $21.2 M (55% of total); average selling price $155/lb (down from $229 YoY).
• Wholesale CPG: $5.0 M (‑10% sequential, +4% YoY).
• Capex: $8.6 M spent in Q3, primarily Phase III expansion at Camarillo.
• Preferred Equity Recapitalization:
• Issued ~77.5 M Series E Convertible Preferred Stock (12% dividend, convertible at $9.00/share).
• Replaced GH Group’s Series B & C preferred; redemption rights triggered if equity price ≥$12 and avg daily volume >1 M shares on a major US exchange.
• Dividends: Paid $1.9 M in preferred‑stock dividends during the quarter.
• Future Outlook: Management expects return to full greenhouse capacity in Q1 2026; aims for record acreage planted by year‑end 2025; maintains long‑term cost target of $95/lb.

Notable Quotes

“We are confident the impacts of our actions are temporary, and we anticipate a return to full production capacity within existing greenhouses in the first quarter of 2026.” – Kyle Kazan, Co‑Founder, Chairman & CEO

Materiality Assessment: Material – Negative (significant revenue decline, negative EBITDA, cash burn, and financing activity).