GrowGeneration (NASDAQ:GRWG) reported a return to positive adjusted EBITDA and sequential sales growth, with net sales of $47.3 million, a 15.4% increase from the previous quarter. Gross margin improved to 27.2%, up from 21.6% in the prior year. Non-GAAP adjusted EBITDA reached $1.3 million, a $3.7 million improvement from the previous year. Proprietary brand penetration increased to 31.6% of revenue, with a target of 40% for 2026. Five store closures were part of ongoing optimization. Infrastructure projects over $7 million were completed. Guidance for the fourth quarter is approximately $40 million, with positive growth expected in 2026. Distribution partnerships and international expansion are key strategies for future growth. Acquisition of Viagrow brand supports expansion into the home gardening market. B2B portal adoption is strong, driving operational efficiency and revenue expansion.
CEO Darren Lampert highlighted the company’s strong performance, with a focus on proprietary brands driving revenue mix and profitability. The company is reducing operating expenses, optimizing retail footprint, and expanding distribution channels. Proprietary brands are expected to constitute 40% of revenue in 2026, with a significant portion driven by cannabis-related sales. Gross margins may experience some compression in the fourth quarter due to durable infrastructure sales, but the company maintains a strong balance sheet with $48.3 million in cash and no debt. Continued investment in infrastructure projects, international expansion, and proprietary brand growth is planned for sustainable and profitable growth. Looking ahead, the company anticipates positive revenue growth and adjusted EBITDA in 2026.
In the Q&A session, management discussed the mix of sales between cannabis and other channels, with a focus on proprietary brands driving revenue growth. Gross margin expectations for the fourth quarter include some compression due to durable sales and end-of-year inventory counts. The company anticipates its first sequential year-over-year revenue growth since 2021 in the upcoming quarter. CEO Lampert expressed gratitude to shareholders and emphasized the company’s transformation strategy and progress towards profitability.
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Read more at Nasdaq: GrowGeneration (GRWG) Q3 2025 Earnings Transcript