TILT Holdings Reports 39% Revenue Decline and Increased Net Loss in Q1 2025

TILT Holdings Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $22.7 million, down 39% from $37.5 million in the same period last year. The company attributed this decrease primarily to a 48% drop in sales from its accessories segment, driven by a transition of certain customers to a commission structure, alongside a 17% decline in its cannabis division due to reduced sales volumes in Massachusetts and Pennsylvania. The cost of goods sold also decreased to $19.3 million from $30.8 million, resulting in a gross profit of $3.4 million, compared to $6.7 million in the prior year.

The company's operating loss widened to $6.6 million from $5.4 million year-over-year, while total other expenses increased to $6.5 million, primarily due to higher interest expenses related to its debt obligations. Consequently, TILT reported a net loss of $13.2 million for the quarter, compared to a net loss of $9.7 million in the first quarter of 2024. The company’s accumulated deficit reached $1.14 billion as of March 31, 2025, reflecting ongoing challenges in achieving profitability.

In terms of strategic developments, TILT announced an asset purchase agreement on January 28, 2025, for the sale of its dispensaries in Massachusetts to In Good Health, Inc. for $2 million, which includes the assumption of certain liabilities. This transaction is expected to close within the next 12 months and has led to the reclassification of $1.5 million in assets to "assets held for sale." Additionally, the company is actively negotiating a waiver and forbearance agreement with noteholders due to noncompliance with certain financial covenants.

Operationally, TILT's total current liabilities increased significantly to $124.4 million from $87.5 million at the end of 2024, driven by a rise in notes payable. The company reported a negative working capital of $86 million, up from $46.6 million, indicating liquidity challenges. As of March 31, 2025, TILT had cash and cash equivalents of $3 million, a slight increase from $3 million at the end of the previous year. The company is focusing on increasing revenue through existing and new product sales, reducing operational costs, and exploring additional financing options to improve its financial position.

Looking ahead, TILT Holdings has outlined plans to enhance revenue growth and operational efficiencies while managing its liquidity needs. However, the company has expressed substantial doubt about its ability to continue as a going concern within the next 12 months, given its historical operating losses and current financial obligations. The management is committed to implementing strategies to mitigate these challenges, but the outcome remains uncertain.