Glass House Brands Inc. (CBOE CA: GLAS.A.U) (OTCQX: GLASF) raised guidance for its fourth-quarter and full-year earnings for 2024. Glass House told investors that it now expects revenue in the quarter to be $52 to $54 million versus the previous guidance of $47 million to $49 million. The company said this would represent growth of 31% year-over-year at the midpoint of updated guidance and the company said its growth would exceed 20% for all three business segments. Shares of the company lifted slightly in early trading.
Co-founder and CEO Kyle Kazan said, “2024 marked another year of rapid growth capped off by a fourth quarter that we expect to exceed the guidance provided in our Q3 2024 earnings call across all key areas – including revenue, gross margin, cultivation cost per pound, average selling price, adjusted EBITDA and operating cash flow. We expect to set new record highs for a variety of financial measures, including full year revenue, wholesale biomass production and Adjusted EBITDA.”
Prices rise
The company said in a statement that it estimates the average selling price will exceed $215 per pound for its wholesale biomass business, compared to previous guidance of $195 to $200 per pound and to $229 per pound in the third quarter. Glass House said that the company had expected a muted seasonal rebound in pricing, but instead got a higher, more typical seasonal recovery. In addition to that, the cost of production is estimated to fall below $115 per pound, well below the previous guidance of $125 per pound.
Full-year estimates
Glass House told the market it expects to report a record high of $200 to $202 million for 2024, up 25% year-over-year versus the midpoint of updated guidance and representing a compound average annual growth rate of 47% since 2021.
In more positive news, the full-year average selling price for wholesale biomass is expected to exceed $243 per pound, compared to $312 per pound in 2023. In 2023, the cost of production was $136, and it is now estimated to be below $125 per pound for 2024.
The company said, “We expect combined 2024 Retail and Wholesale CPG revenue to exceed $61 million and we project that both business segments grew by over 10% year-on-year, respectively. As regards retail, adjusting out the effect of our Turlock store which was opened in April 2023, we expect same-store sales will grow around 10% outpacing the overall California retail market, which fell by 6% per Headset data, by an astonishing 16 percentage points.”
Cash levels
The company continued its rosy comments by telling investors that it looks like it will end the year with $37 million cash after starting the year with $33 million in cash. Glass House said it managed to accomplish this through minimal fund-raising.
The statement read, “As previously announced, during December 2024 the Company implemented a new $25 million at-the-market share distribution program, intended to increase its financial flexibility and support its expansion plans. During the fourth quarter of 2024, we made limited use of the facility as we felt market conditions were not well-suited to fund-raising. In all, we sold 10,000 common equity shares at an average price of $6.72 per share for aggregate net proceeds of approximately $65,600.”
Looking ahead
Glass House said it expects to give an outlook for 2025 when it reports its 2024 earnings. The company also said it plans to announce its hemp strategy in the second quarter of 2025.
[[{“value”:”Glass House attributed the solid results to cost cutting and lower production costs, along with increased same-store sales.
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