Green Thumb Indus Sub Vtg

Good afternoon, and welcome to Green Thumb's first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the conclusion of formal remarks. During the question and answer session, we would ask for a limit of one question and one follow-up question per person. As a reminder, a live audio webcast of the call is available on the investor relations section of Green Thumb's website, and will be archived for replay. I'd like to remind everyone that today's call is being recorded. I will now turn the call over to Leah Rosenfeld, Senior Director, External Communications. Please go ahead.

Thanks, Gary. Good afternoon, and welcome to Green Thumb's first quarter 2022 earnings call. I'm here today with founder and CEO, Ben Goldler, and Chief Financial Officer, Anthony Georgadis. Today's discussion and responses to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today, along with reports filed with the United States Securities and Exchange Commission and Canadian securities regulators, including the 2021 annual report filed on Form 10-K. This report, along with today's earnings release, can be found under the Investors section of our website. Greensum assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, Greensum will refer to non-GAAP financial measures, including EBITDA and adjusted operating EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC and CEDAR filing. Please note all financial information is provided in U.S. dollars unless otherwise indicated. Thanks, everyone, and here's Ben.

Thanks, Leah. Good afternoon, everyone, and thank you for joining our call today. We reported another solid quarter for Q1. Revenue increased 25% year-over-year to $243 million. Our seventh consecutive quarter of positive gap net income came in at $29 million, or $0.12 per share. And we continue to benefit from increased scale and operating leverage to deliver adjusted operating EBITDA of $67 million and free cash flow from operations of $55 million. This is our ninth consecutive quarter with positive free cash flow from operations. This quarter, we had a 200 basis point decline in gross margin versus last quarter, but still came in above our stated goal of 50%. That said, and as I've repeated before, we are more focused on cash flow than margins, which can fluctuate quarter to quarter considering all the moving pieces in our business. Some of these include starting up operations in new markets, possible delays in adult use sales, as well as investments made in any given quarter to better serve our customers. So while margins are important, and we've discussed the 50% growth margin goal, I think the more important factor for us and the industry is cash. Last weekend was the Berkshire Hathaway Annual Shareholders Meeting in Omaha with legends Warren Buffett and Charlie Munger. several folks from our team were able to listen to Warren say that cash is, quote, like oxygen. It is there all the time, but if it disappears for a few minutes, it is all over. We live on that cash, oxygen, and plan for that to continue. The focus on cash has been in our DNA since the very beginning. It's a discipline that we'll never abandon because to us and many of our mentors, the best path to true value creation building a business that can generate attractive cash flow over the long term and deliver consistent high return on incremental invested capital. So, to our way of thinking, follow the cashiche.