Cresco Labs Inc

Good day and welcome to Cresco Labs' fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key and then the number one on your telephone keypad. To withdraw your question, please press star, then number two. Please note this event is being recorded. I'd now like to turn the call over to TJ Cole, Senior Vice President, Corporate Development and Investor Relations for Cresco Labs. Please go ahead, TJ.

Good morning and welcome to Cresco Labs' fourth quarter 2025 earnings conference call. On the call today, we have Chief Executive Officer and Co-Founder Charles Bochtel, Chief Financial Officer Sharon Shuler, and President Greg Butler, who will be available for the Q&A. Prior to this call, we issued our fourth quarter earnings press release, which has been filed on CDAR and is available on our investor relations website. These preliminary results for the fourth quarter are provided prior to completion of all internal and external reviews, and therefore are subject to adjustment to the filing of the company's quarterly and annual financial statements. We plan to file our corresponding financial statements and MD&A for the quarter and year ended December 31st, 2025 on CDAR and EDGAR later this week. Before we begin, I want to remind you that statements made on today's call may contain forward-looking information. Actual results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described in our earnings press release and in the most recent annual information form in NDNA filed with the securities regulators. This call also contains non-GAAP measures also outlined in our earnings press release and in the NDNA filed with the securities regulators. Please also note that all financial information on today's call is presented in U.S. dollars, and all interim financial information is unaudited.

With that, I'll turn the call over to Charlie. Good morning, everyone, and thank you for joining Presco Lab's Q4 and full-year earnings call. Over the past year, we've been executing against a clear long-term plan to improve margins, generate cash, optimize our footprint, and reinforce the balance sheet so we can invest strategically and position ourselves for growth. In Q4, we made measurable progress against that plan. We generated $162 million in revenue. We produced $84 million in adjusted gross profit, $40 million in adjusted EBITDA, and $27 million in operating cash flow. For the full year, we delivered $656 million in revenue, $157 million in adjusted EBITDA, and $73 million in operating cash flow, while materially strengthening our balance sheet and simplifying our operations. I want to sincerely thank our team for making measurable progress across our core financial priorities. They produce products that consumers want while making cultivation and manufacturing more efficient. They gave the customer the in-store experience that they need while prioritizing higher return channels, and they managed capital with discipline. Today, the team is staying the course, focused on meeting the needs of the customer while building the most productive and cash generating platform possible. Let me walk through how we're executing on that strategy. First and foremost, we are building a solid balance sheet with consistent cash generation. In 2025, we strengthened our financial position through concrete actions. We generated strong operating cash flow and refinanced our debt, extending maturities to 2030. These steps improved our capital structure, reduced near-term risk, and sharpened our operational focus. Tailoring and simplifying our footprint has been central to this effort. Exiting California was an intentional decision to reallocate capital and our internal resources toward markets where we have stronger returns. Our capital allocation framework is straightforward. We generate cash through tight execution. We deploy capital selectively when opportunities meet clear return and integration thresholds to protect and strengthen the balance sheet. All these actions enhanced our financial flexibility and positioned us to capitalize on attractive opportunities in 2026 and beyond. With internal cash flow as our primary source of capital, we're excited about inorganic investments that'll strengthen operating leverage and enhance market density while meeting our financial standards. Second, our focused footprint positions us to win with organic growth from our core markets and targeted expansion in markets where we see compelling returns. We're going deeper in core markets where we can leverage our existing infrastructure and small investments will have higher incremental returns. Throughout 2025 we've evaluated multiple investments against strict risk adjusted criteria. Well, most acquisitions did not meet our standards we've identified several attractive tuck in opportunities that have the potential to drive operating leverage. Our current pipeline for strategic acquisitions is as robust as we've seen and we're excited to share updates on those opportunities as they progress in Ohio we're applying a prudent density driven approach. There, our focus remains on increasing retail concentration to find more scaled efficiencies and margin expansion. Our border store strategy is proving particularly effective. Sunnyside Proctorville, located near the West Virginia border, is exceeding expectations and validating our site selection model. We're building on that success with two additional store openings scheduled for early this year. In Kentucky, our operations are coming together quickly. Our cultivation facility is operational with plants now in the building, shifting the market from the capital investment phase into the revenue generating phase as initial harvests come online. We're building responsibly as the broader medical program rolls out slowly, preparing to serve patients soon without overextending capital. Internationally, our Capital Light pilot in Germany has been a great success, with products selling out ahead of schedule. While our global strategy remains measured, this result validates both the strength of our brand portfolio and the portability of our operating model in a tightly regulated European environment. Across all of these initiatives, discipline is a key theme. Every expansion is evaluated against clear return thresholds, execution capability, and capital efficiency. By balancing organic growth within core markets with targeted acquisitions, we're building a platform that's positioned to expand margins over time. And lastly, our proven retail and wholesale capabilities will keep enabling us to outperform the market. Our wholesale business remains a core strength, with the number one branded market share in Illinois, Pennsylvania, and Massachusetts, and leading positions across our limited license markets, according to Headset. That leadership reflects cultivation consistency, portfolio quality, and our ability to reliably supply both our own stores and third-party partners with high-velocity brands. It's further reinforced by our retail execution, where we hold the number one share in Illinois and rank among the leading operators in Ohio and Pennsylvania. We're building on that scale advantage through deliberate differentiation. For example, we're introducing Sunnyside exclusives, including our new Sunnyside house brand called Louder. Designed for champion shoppers who purchase regularly, Louder reduces price comparability and creates compelling reasons to choose Sunnyside beyond convenience. The in-store experience is another key differentiator. We continue refining operations and removing friction across the customer journey to ensure orders are fulfilled quickly, reliably, and with expert care. Our 4.9 average Google rating across the network reflects our consistency, an achievement that's difficult to sustain in large, high volume retail environments. And I can't thank the team enough for working so hard to achieve this incredible feedback from our customers. Together, our leading brand share, retail density, Smart pricing strategies and shopper innovations equip Cresco to continue to gain and defend share in competitive environments without sacrificing margin. We win where we operate. This year, we strengthened our balance sheet, expanded our footprint strategically, maintained leadership positions across key markets, and improved profitability metrics. I'm pleased to share that today, Cresco is more focused, more efficient, and structurally stronger than it was a year ago. With that, I'll turn it over to Sharon to walk you through our Q4 financial performance in more detail.