Charlotte's Web Holdings, Inc.

Q4 2025 consolidated net revenue was $13.3 million, up 15.8% sequentially and 4.7% from $12.7 million a year ago. Gross profit was $5 million and gross margin was 37.5%, pressured by a nonrecurring $1.3 million inventory charge that reduced margin by about 10 percentage points. Q4 net loss was $11.4 million, or $0.07 per share, versus a $3.4 million loss, or $0.02 per share, in Q4 2024. Full-year 2025 revenue was $49.9 million, up 0.5% year over year; full-year SG&A was $42 million, down 21.2% from $53.3 million; operating loss improved more than 36% to $20.3 million; and net loss was $29.7 million, or $0.19 per share. On liquidity, cash was $8 million and working capital was $21.7 million at year-end, before the $10 million BAT private placement. Management said quarterly SG&A for the core business should stay around $10 million to $11 million, excluding launch spend for Medicare-related programs, and gross margin should normalize toward its historical 50% range as transitional items roll off and efficiencies improve.

Bill Morachnick framed the quarter as part of a broader turnaround and said Charlotte’s Web is no longer in “business as usual” mode. He emphasized three strategic themes: the BAT transaction, which he said removes the company’s largest liability and creates a clean balance sheet; the CMS/CMMI Medicare pilot, which he called an established health care integration pathway; and DeFloria, which he described as a potentially significant long-term therapeutic and manufacturing opportunity. His tone was notably confident and upbeat, but he repeatedly stressed that the company is still early in these new opportunities and that execution and regulatory clarity still matter.

Erika Lind focused on the company’s improved operating structure and liquidity. She cited Q4 revenue of $13.3 million, gross profit of $5 million, gross margin of 37.5%, SG&A of $10.6 million, and Q4 net loss of $11.4 million; for the full year, she highlighted $49.9 million of revenue, $42 million of SG&A, a 36%+ improvement in operating loss to $20.3 million, and year-end cash of $8 million. She said the BAT transaction is transformational because it eliminates the $55 million debt principal, about $10 million of accrued interest, and avoids roughly $12 million more of interest through maturity, while the $10 million private placement adds working capital. She also said the new capital is modest dilution of about 5% of post-conversion shares and reiterated a disciplined SG&A base of roughly $10 million to $11 million per quarter for the core business.

Analysts pressed for details on the CMMI pilot, including what participating centers are, who funds the $500 per beneficiary, how product orders will work, and whether revenue could be modeled for 2026-2027. Management said the participants are existing health care organizations already in CMS models like ACO REACH, EOM, and later ACO LEAD, that Medicare does not directly reimburse the products, and that ACOs fund purchases from their own value-based economics through Charlotte’s Web’s portal with drop-shipping to patients. On revenue, Bill said it is too early for specific guidance, that near-term revenue is unlikely to be “massive,” and that the build should be gradual over 12-18 months. He also said there is no exclusivity in the program, but he believes Charlotte’s Web is well positioned because of quality and compliance standards. The analyst also asked how the pilot squares with a possible hemp ban; management said they are working for a consistent federal framework and expect policy to evolve, but timing remains uncertain.