IM Cannabis (IMCC) Q4 2024 earnings summary

Executive summary

• Achieved significant growth in Germany following partial legalization in April 2024, with Germany accounting for 40% of total revenue in H2 2024 versus 11% in 2023.

• Adjusted EBITDA turned positive at CAD 0.5 million in Q4 2024, compared to a CAD 4.3 million loss in Q4 2023; annual adjusted EBITDA loss decreased 87% to CAD 1.1 million.

• Strategic focus shifted to operational efficiency, cost management, and supply chain integration, resulting in a leaner structure and improved profitability.

• Sales in Germany increased by 183% year-over-year, reaching CAD 15.5 million, with supply constraints limiting further growth in Q4.

• Israel operations stabilized despite market challenges, with new strains launched and production costs reduced.

Financial highlights

• 2024 revenue reached CAD 54 million, up 11% from CAD 48.8 million in 2023, driven by a CAD 10 million increase in Germany.

• Gross profit for 2024 was CAD 8.5 million, down 14% year-over-year, impacted by inventory write-offs.

• Q4 2024 Adjusted EBITDA turned positive at CAD 0.5 million, a CAD 5 million improvement from Q4 2023.

• Net loss for 2024 was CAD 11.8 million, compared to CAD 10.2 million in 2023; Q4 net loss narrowed to CAD 1.2 million from CAD 3.5 million in Q4 2023.

• Cash and cash equivalents at year-end were CAD 0.9 million, down from CAD 1.8 million.

Outlook and guidance

• Management anticipates Q1 2025 will be the best sales quarter to date in Germany, supported by a strengthened supply chain.

• Margin improvement anticipated as inventory write-offs are not expected to recur in 2025.

• Focus remains on growth in Germany, with Israel expected to remain stable barring regulatory changes.