AWH Announces Third Quarter 2025 Financial Results (Form 8-K)

AWH Announces Third Quarter 2025 Financial Results

Delivered Q3 2025 Net Revenue of $124.7 million

Achieved Q3 2025 Adjusted EBITDA1 of $31.1 million, representing a 24.9% margin

Focused margin optimization fueled sequential Adjusted Gross Margin1 growth of 300-basis points to 46.4%

Drove strategic market densification with seven new stores added year-to-date, expanding nationwide footprint to 46 locations2

NEW YORK, NY, November 10, 2025 - Ascend Wellness Holdings, Inc. ("AWH," "Ascend," or the "Company") (CSE: AAWH.U, OTCQX:AAWH), a leading multi-state, vertically integrated cannabis operator and consumer packaged goods company, today reported its financial results for the quarter ended September 30, 2025 ("Q3 2025"). Financial results are reported in accordance with U.S. generally accepted accounting principles ("GAAP"), and all currency is in U.S. dollars.

Business Highlights

•Advanced densification strategy through the addition of seven strategically located retail stores year-to-date, enhancing market depth and expanding total footprint, including partner locations, to 46 nationwide.

◦Subsequent to the quarter, the Company received approval from the New Jersey Cannabis Regulatory Commission for its newest store in Little Falls. This location marks Ascend's first partner dispensary in New Jersey. The Company is one of only six operators approved under Assembly Bill A4151, which aims to expand investment opportunities for diversely owned cannabis businesses.

◦A robust retail development pipeline comprised of 13 additional stores positions the Company to achieve its target of 60 locations2 within the next 12 months, a goal launched at the end of 2024 and subject to regulatory approvals and timelines.

•Executed CPG-driven growth initiatives and customer-focused innovation with a series of product launches including:

◦Expansion of the Effin' product line with the introduction of effects-based vapes, offered in 1g full-flavor cartridges across five SKUs - Zen, Chillin', Do It!, Deep Sleep, and Love. The new vapes feature expertly formulated combinations of THC and minor cannabinoids and are available across Illinois, Massachusetts, and New Jersey. An all-in-one disposable format is slated for launch in the coming weeks.

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◦Unveiling of new effects-based gummies from Effin', including five unique flavors and formulations such as Relief (Sour Acai), Zen (Peach & Honey), Showtime (Pina Colada), Deep Sleep (Dark Cherry), and Create (Strawberry Tequila). Select offerings are available in Illinois, Massachusetts, and New Jersey.

◦Launched High Wired infused flower and pre-rolls in New Jersey in September, after an initial highly successful debut in Illinois and Massachusetts in Q2 2025. High Wired is the number two infused flower brand by sales and units across all three states, according to BDSA.

◦Debut of Ozone Reserve and Simply Herb pre-rolls in Ohio, following the state's approval of the form factor in August 2025.

◦As of the end of Q3 2025, the Company has launched 420 SKUs and remains on track to achieve a record of nearly 550 SKU launches for the full year.

◦Rollout of Simply Herb's all-in-one disposable 1g vapes in seven unique flavors early in the fourth quarter of 2025, such as Mango Sticky Rice and Fruit Lagoon, across Illinois, Massachusetts, and New Jersey.

•Launched a fully integrated e-commerce ecosystem in alignment with AWH's customer-first focus, including a redesigned Dutchie-powered shopping platform, an app featuring AI-driven personalization, Ascend Pay pay-by-bank functionality, and an enhanced Ascenders Club loyalty program with tiered, points-based rewards and exclusive benefits.

•Strengthened capital position with the closing of a $9.3 million financing from CF Bank through a mortgage loan secured by our Ohio real estate assets (the "Ohio Mortgage Loan"). The Ohio Mortgage Loan carries a competitive interest rate of 8.5% per annum and matures in September 2030.

•Repurchased approximately 1.0 million shares of Class A common stock ("Common Shares") in the open market under AWH's normal course issuer bid ("NCIB") share buyback program (the "Buyback Program") in Q3 2025.

◦Since Q4 2024, the Company has repurchased and retired a total of approximately 15 million shares, at an average price of $0.30 per share3. Share repurchases under the Buyback Program are expected to continue in line with NCIB terms and applicable regulatory limits.

Q3 2025 Financial Highlights

•Total net revenue was $124.7 million compared to $127.3 million in the second quarter of 2025 ("Q2 2025").

◦Retail revenue was $83.8 million, a 3.1% sequential decrease.

◦Wholesale revenue increased 0.3% quarter-over-quarter to $41.0 million.

•Adjusted Gross Profit1 was $57.8 million compared to $55.3 million in Q2 2025.

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•Net loss of $25.8 million compared to $24.4 million in Q2 2025.

•Adjusted EBITDA1 was $31.1 million for Q3 2025, representing a 24.9% margin1.

◦Quarter-over-quarter, Adjusted EBITDA1 increased 8.9% and Adjusted EBITDA Margin1 increased by 250-basis points.

•As of September 30, 2025, cash and cash equivalents were $87.3 million and Net Debt4 was $281.8 million.

Management Commentary

"During the third quarter, we continued to execute on our optimization strategies with discipline, maintaining a sharp focus on cost control and operational efficiency that underpin our long-term strategy," said Sam Brill, Chief Executive Officer and Director of AWH. "These priorities have delivered profitability improvements, as reflected in our margin expansion, as we navigate a complex operating environment and focus on rebuilding topline momentum and strengthening operating leverage. Our market densification strategy continues, with the approval of our planned expansion in New Jersey coming to fruition later this month with the opening of our Little Falls partner store. This key growth milestone positions us for further store development and regional penetration in New Jersey, while our balance sheet and strong store pipeline support additional planned openings in other key markets as we secure necessary regulatory approvals."

"Alongside our expansion efforts, we continued to elevate the customer experience by refreshing our leading brand portfolio with the addition of over 420 new SKUs year-to-date and rolling out our new shopping platform and loyalty program across our network," said Frank Perullo, Co-Founder, President, and Director of AWH. "These investments are firmly rooted in our customer-centric approach and commitment to innovation, driving meaningful brand differentiation, growing long-term market loyalty, and supporting continued margin improvement. A standout achievement in the third quarter was the successful launch of Ozone Reserve and Simply Herb pre-rolls in Ohio, where strong customer demand is reinforcing our brand's momentum in a foundational market."

Roman Nemchenko, Chief Financial Officer of AWH, added, "As year-end approaches, we believe that the decisive steps we have taken are positioning the Company for sustained financial strength. The successful completion of our recent $9.3 million mortgage financing, secured by our Ohio assets at an attractive 8.5% interest rate, has fortified our capital base and supports our disciplined retail expansion strategy. We remain committed to prudent cost management, which has been instrumental in generating the capital needed for targeted investments across our brands, product innovation, customer engagement platforms, and facilities. These initiatives have strengthened our foundation and created a clear path for value creation for our shareholders in the year ahead."

Q3 2025 Financial Overview

Net revenue totaled $124.7 million for Q3 2025, representing a 2.0% sequential decline. This decrease is attributable to a reduction of 2.1% in retail revenue, offset by a 0.1% increase in third-party wholesale revenue.

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Retail revenue was $83.8 million, a 3.1% decrease sequentially, primarily due to ongoing price compression and lower transaction volumes across various markets, which adversely impacted same-store sales growth. This pressure was partially offset by the gradual ramp-up of five new stores that opened in the first half of 2025, as well as the addition of two stores during the quarter.

Third-party wholesale revenue was $41.0 million, a 0.3% increase from the prior quarter, reflecting a shift in mix, including a strategic shift to redirect biomass toward higher margin finished products, but thereby reduced bulk flower and oil available to third-party customers, and an impact from continued pricing pressures in several markets.

Q3 2025 gross profit was $43.6 million, or 35.0% of revenue, as compared to $41.4 million, or 32.5% of revenue, in Q2 2025. Adjusted Gross Profit1 was $57.8 million, or 46.4% of revenue, for Q3 2025, as compared to $55.3 million, or 43.4% of revenue, for the prior quarter. This increase was primarily driven by the Company's retail channel, reflecting a higher vertical sales mix along with improved margins on third-party products. There was also a benefit from an increase in wholesale margin from improvements in the mix between bulk and finished goods.

Total general and administrative ("G&A") expenses for Q3 2025 were $44.9 million, or 36.0% of revenue, compared to $42.4 million, or 33.3% of revenue, for Q2 2025. The increase was primarily associated with the expansion of operations as the Company continued to advance its retail densification strategy in key markets, partially offset by ongoing cost controls.

Net loss for Q3 2025 was $25.8 million, compared to $24.4 million in the prior quarter. This was largely due to increased G&A expenses, partially offset by improvements in margin profile and ongoing cost-saving and operational efficiency initiatives.

Adjusted EBITDA1 was $31.1 million in Q3 2025 compared to $28.6 million in Q2 2025, with an Adjusted EBITDA Margin1 of 24.9%, a 250-basis point increase from the prior quarter. This improvement was driven by an increase in adjusted gross profit of 300-basis points and was partially offset by slightly higher G&A expenses.

Cash and cash equivalents at the end of Q3 2025 were $87.3 million and Net Debt4 was $281.8 million. Net cash used in operations was $2.0 million and reflects a $19.1 million biannual interest payment.

1 Measure is a non-GAAP financial measure. Please see "Non-GAAP Financial Information" below and "Reconciliations of Non-GAAP Financial Measures (Unaudited)" at the end of this press release.

2 Includes both Company-owned and partner locations.

3 Under the Buyback Program, the Company may repurchase up to the lesser of: (i) 10,215,690 shares of the Company's Class A common stock ("Common Shares"); and (ii) $2.25 million worth of Common Shares, in the open market. Total shares repurchased includes 11 million shares repurchased in a private transaction in Q4 2024.

4 Net Debt is a non-GAAP financial measure defined as total debt, net of unamortized deferred financing costs of ~$369.1 million, less cash and cash equivalents of $87.3 million as of September 30, 2025. Please see "Non-GAAP Financial Information" below.

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Non-GAAP Financial Information and Definitions