Wed, May 14, 11:11 AM (35 days ago)
**Charlotte's Web Holdings, Inc. (CWEB) Q1 2025 Financial Summary** Charlotte's Web Holdings, Inc. (CWEB) reported a mixed quarter with some positive trends but also significant challenges. Here are the key points: **Financial Performance:** - **Revenue:** Total revenue for Q1 2025 was $12,262,000, a 1.1% increase compared to Q1 2024. Product revenue grew by 3.2%, driven by an upgraded e-commerce platform and strategic retail partnerships. - **Gross Profit:** Gross profit decreased by 9.9% to $6,230,000, with a gross margin of 50.8%, down from 57.0% in Q1 2024. This decline was due to higher costs of goods sold related to materials and shipping. - **Operating Loss:** The operating loss narrowed to $5,348,000 from $8,369,000 in Q1 2024, reflecting a 24.2% decrease in selling, general, and administrative expenses due to cost-cutting measures. - **Net Loss:** Net loss was $6,212,000, an improvement from $9,634,000 in Q1 2024. - **Cash Flow:** Net cash used in operating activities decreased to $2,768,000 from $7,179,000 in Q1 2024, primarily due to cost-saving measures and reduced payments related to the MLB Promotional Rights Agreement. **Key Metrics and Trends:** - **Cash and Cash Equivalents:** Decreased to $19,357,000 from $22,618,000 in Q1 2024. - **Total Assets:** Decreased to $108,023,000 from $141,778,000 in Q1 2024. - **Total Liabilities:** Decreased to $86,961,000 from $95,110,000 in Q1 2024. - **Shareholders' Equity:** Decreased to $21,062,000 from $27,087,000 in Q1 2024. **Operational Highlights:** - **Product Innovation:** Launched Stay Asleep CBN gummies, expanding beyond CBD. - **Regulatory Impact:** Assessing the impact of new state regulations on product formulation and labeling. - **R&D and Clinical Trials:** Continued investment in R&D and clinical trials, including the FDA's approval for DeFloria's Phase 2 clinical trial for AJA001. **Future Outlook and Uncertainties:** - **Cost-Cutting Measures:** Expects to reduce overall selling, general, and administrative expenses in 2025. - **Regulatory Uncertainties:** New state regulations may impact product formulation, labeling, and costs. - **Liquidity:** Management believes existing cash and cash equivalents will provide sufficient liquidity for the next 12 months, but long-term liquidity depends on revenue growth and regulatory changes. **Conclusion:** Charlotte's Web Holdings, Inc. showed signs of operational improvement and cost management in Q1 2025, but faces significant challenges related to regulatory uncertainties and the need for continued revenue growth. The company's strategic focus on innovation and cost reduction will be crucial for future success.