Charlotte's Web Holdings, Inc. reported a decline in financial performance for the third quarter of 2025, with total revenue reaching $11.5 million, an 8.6% decrease from $12.6 million in the same period last year. For the nine months ending September 30, 2025, revenue was $36.6 million, down 1.2% from $37 million in 2024. The decrease in revenue is attributed to a strategic shift towards a more margin-accretive distributor model, which resulted in a significant drop in business-to-business (B2B) sales, declining by approximately 48% year-over-year.
The company's gross profit for the third quarter was $4.5 million, representing a gross margin of 38.9%, down from 53% in the prior year. This decline was influenced by a one-time charge related to the B2B transition and increased costs associated with in-house manufacturing operations. Selling, general, and administrative expenses also decreased to $9.7 million from $12.7 million, primarily due to reduced amortization expenses following the termination of the MLB Promotional Rights Agreement and ongoing cost-cutting measures.
Charlotte's Web's total assets decreased to $81.6 million as of September 30, 2025, down from $119.6 million at the end of 2024. The company's liabilities also fell to $72.4 million from $89.4 million, reflecting a reduction in current liabilities. The company reported a net loss of $5.8 million for the third quarter, slightly higher than the $5.8 million loss reported in the same quarter of 2024. For the nine-month period, the net loss was $18.3 million, compared to $26.5 million in the previous year.
In terms of operational developments, Charlotte's Web has launched new products, including Stay Asleep Cannabinol (CBN) gummies, which are positioned as a natural sleep aid. The company is also focusing on expanding its product line beyond CBD, leveraging its brand recognition and partnerships, particularly with DeFloria LLC, which is engaged in botanical drug development. The FDA has cleared DeFloria to proceed with Phase 2 clinical trials for its candidate treatment for autism spectrum disorder, indicating potential future growth avenues.
Looking ahead, Charlotte's Web aims to reduce negative cash flows and improve operational efficiency. The company expects to continue cutting selling, general, and administrative expenses while enhancing its e-commerce platform and retail strategies. Management believes that existing cash reserves will be sufficient to fund operations and capital expenditures for the next 12 months, although long-term funding will depend on revenue growth and expense management amid evolving market conditions.
About Charlotte's Web Holdings, Inc.
Charlotte's Web Holdings, Inc. is a leader in producing hemp-derived wellness products, including full-spectrum CBD, functional mushroom gummies, topicals, and pet products. The company cultivates proprietary hemp, controls its supply chain, and emphasizes quality, innovation, and sustainability. Its products serve health-conscious consumers through retail, healthcare, and online channels, leveraging scientific research, proprietary genetics, and a socially responsible, B Corp-certified business model.
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