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Fourth Quarter 2024 Financial Review
Consolidated net revenue for the fourth quarter ended December 31, 2024, was $12.7 million, compared to $15.9 million in the fourth quarter of 2023. Revenue increased modestly on a quarter-over-quarter basis versus Q3 2024 revenue of $12.6 million.
Quarterly revenue trend for 2024:
Q1
Q2
Q3
Q4
U.S. $ millions
2024
2024
2024
2024
Total revenue
$ 12.1
$ 12.3
$ 12.6
$ 12.7
In the fourth quarter, some retailers were negatively impacted by state regulations restricting the sale of certain CBD products, despite meeting federal requirements. However, e-commerce revenue increased quarter-over-quarter following the launch of the Company's new e-commerce platform.
Gross Profit in Q4 2024 was $5.1 million, or 40.2% of revenue, compared to Gross Profit of $8.9 million, or 56.0% of revenue, in Q4 2023. The reduction in gross margin reflected holiday promotional investments, temporary shipping inefficiencies, and reduced fixed cost absorption on lower-than-expected revenue. The Company models gross margin to return above 50% in 2025.
Total selling, general, and administrative ("SG&A") expenses in the quarter were $10.6 million, a 43% improvement from $18.6 million in Q4 2023. Stringent expense controls were implemented during the year to better align with current revenue levels.
Net loss for the fourth quarter of 2024 was $3.4 million, or ($0.02) per share basic and diluted, compared to a net loss of $8.5 million, or ($0.06) per share basic and diluted, for the fourth quarter of 2023.
Excluding depreciation, amortization and other non-cash items, Charlotte's Web reported positive Adjusted EBITDA1 for the fourth quarter of 2024 of $0.3 million, a $6.8 million improvement compared to negative Adjusted EBITDA of $6.5 million in the fourth quarter of 2023.
Fiscal Year 2024 Financial Review
On a year-over-year basis, consolidated net revenue for the twelve months ended December 31, 2024, was $49.7 million, a decrease of 21.4% from $63.2 million in 2023. Revenue was negatively impacted by inflationary impacts on consumer spending and reduced retailer shelf allocations to the CBD category. The Company adopted a new e-commerce platform mid-year that has resulted in improving marketing, customer management, and sales volumes.
Gross profit for the year ended December 31, 2024, was $21.3 million, compared to $35.6 million for the year ended December 31, 2023. Gross profit was negatively impacted by a $4.1 million increase in inventory provision for 2024 due to the revaluation of aged hemp based on current market conditions. The increase was partially offset by lower inventory expenses and other variable costs associated with lower revenue in 2024. Gross profit before inventory provision was $25.4 million, or 51.1%, and $36.6 million, or 58.0%, in 2024 and 2023, respectively.
Total SG&A expense for 2024 was $53.3 million, compared to $75.6 million in the prior year. The $22.4 million or 29.6% decrease resulted from multiple actions taken in 2024 to reduce operating expenses and better align SG&A against the lower revenue levels, including workforce and insurance program adjustments, contract reviews and negotiations, and software optimizations. Additionally, in 2024, the Company amended its MLB Promotional Rights Agreement, resulting in a decrease in amortization and media expense related to MLB assets of approximately $4.9 million compared to 2023.
An operating loss of $32 million in 2024 improved 21.2% from an operating loss of $40.6 million in 2023. Net loss for 2024 was $29.8 million, or $(0.19) per share, basic and diluted, compared to a net loss of $23.8 million, or $(0.16) per share, basic and diluted, in 2023. The lower net loss in 2023 was due to a combined net gain of $20.0 million in that year in the fair value of the Company's debt derivative and from its investment in DeFloria.
Excluding depreciation, amortization, and interest, the EBITDA1 loss for 2024 was $17.6 million, as compared to an EBITDA loss of $6.3 million for 2023. 2024 included a higher inventory provision than 2023, which included the combined net gain of $20.0 million in fair value of the Company's debt derivative and from its investment in DeFloria. Excluding these items, the Adjusted EBITDA1 loss was $12.6 million for 2024, as compared to the Adjusted EBITDA loss of $22.7 million for 2023.
Balance Sheet and Cash Flow
Net cash used for operations in the fourth quarter of 2024 was $1.8 million. Net cash used for operations in the year ended December 31, 2024, was $21.2 million, including cash paid to MLB for license and media rights assets of $5 million. Capital expenditures of $3.9 million were primarily used for the in-house production of topical and gummy projects.
The Company's cash and working capital as of December 31, 2024, were $22.6 million and $31.1 million, respectively, compared to $47.8 million and $54.5 million as of December 31, 2023, respectively.
"With reduced cash burn, having cash reserves exceeding $22 million provides the runway for 2025 growth and beyond," said Mrs. Lind. "In-house production will increase in 2025, and continued expense discipline is key to stabilizing our financial position."
Consolidated Financial Statements and Management's Discussion and Analysis
The Company's audited consolidated financial statements and accompanying notes for the three and twelve-month periods ended December 31, 2024, and 2023, and related management's discussion and analysis of financial condition and results of operations ("MD&A"), are reported in the Company's 10-K filing on the Securities and Exchange Commission website at www.sec.gov and on SEDAR+ at www.sedarplus.ca and will be available on the Investor Relations section of the Company's website at https://investors.charlottesweb.com.
Item 2.02 Results of Operations and Financial Condition.
On March 19, 2025, Charlotte’s Web Holdings, Inc. (the “Company”) issued an earnings release announcing its financial results for the quarter and year ended December 31, 2024. A copy of the earnings release is furnished herewith as Exhibit 99.1 and incorporated in this Item 2.02 by reference.
.08 CENTS!! my apologies for missing it by 2 cents. My call was .10 2+ years ago. Told ya, never marry a stock especially a POS like this.
“Charlotte's Web" or the "Company") will report its 2024 fourth quarter and year-end results prior to market open on March 19, 2025.“
https://finance.yahoo.com/news/charlottes-2024-fourth-quarter-earnings-182700022.html
How about CBD analysts John Smith/ (Pinocchio) also recommending TCNNF and Ayrwf besides cwbhf 😆🤣
WQLF SAYS CWBHF Sucks 10 Pennies and falling YQU DO Understand YQU Understand. Have Mercy WQLF Ahooooooo
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=17552012
☝️
WQLF SAYS: ALL 34 SKU’s Removed. Oh My My Have Mercy WQLF Ahooooooo
https://data.food.gov.uk/cbd-products/products-list?page=1&row-limit=10&search=Charlotte+s+Web
Wolfman Jack Says: Oh My My You Understand. Ahooooooo
Interesting.
WQLF SAYS: It just dawned on me that JD mentioned Cannabis in the call. I believe the company is going to merge with or acquire a Cannabis
Company. Your thoughts?
“We will continue to participate in the contraction and consolidation of both the CANNABIS and HEMP industries and will evaluate both inbound and outbound M&A opportunities that have strategic value and help scale our company profitably.”
WQLF SAYS;
“Charlotte's Web" or the "Company"), the market laggard in cannabidiol (CBD) hemp extract wellness products, stands in firm opposition to the new regulations in California that restrict the sale of many ingestible full-spectrum hemp CBD products that meet federal requirements.”
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175135284
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