Cresco Labs (CL) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $173 million, up 15% sequentially, with adjusted EBITDA of $40 million, up 20% sequentially, and net income of $15 million, reflecting strong operating leverage and profitability.

• Profitable, vertically integrated multi-state cannabis operator with leading wholesale brands and a highly productive retail network across eight states.

• Growth was driven by new dispensaries, market stabilization, disciplined execution, and strategic M&A, particularly in Pennsylvania, Kentucky, and Ohio.

• Federal cannabis rescheduling is expected to improve industry economics, reduce tax burdens, and open access to U.S. capital markets.

• Leadership transition announced with CFO stepping down and interim CFO appointed.

Financial highlights

• Q2 2026 net revenue: $173.3 million (up from $163.6 million in Q2 2025); adjusted gross profit: $89.5 million (51.6% margin); adjusted EBITDA: $39.5 million (22.8% margin); net income: $15.4 million.

• Free cash flow for Q2 2026: $6.5 million, compared to negative free cash flow in Q1 2026.

• Cash, cash equivalents, and restricted cash: $67 million as of June 30, 2026.

• Net debt as of June 30, 2026: $510.2 million; total debt: $577.6 million.

• LTM Q2 2026 net revenue: $651 million; adjusted gross profit: $331 million; adjusted EBITDA: $153 million; operating cash flow: $43 million.

Outlook and guidance

• Q3 net revenue expected to be roughly in line with Q2 as acquired stores ramp and Kentucky launches, offsetting price compression.

• Gross margin projected in the high 40s to 50% range due to higher-cost inventory.

• Adjusted SG&A expected to remain flat in dollar terms; adjusted EBITDA margin guidance at approximately 20%.

• Management expects federal rescheduling to improve business economics, strengthen net income, and enhance access to capital markets.

• Expects incremental revenue to carry high margins due to a largely fixed cost base.