GrowGeneration Corp.

GrowGeneration reported Q2 net sales of $43.2 million, up 5.5% year over year from $41 million, and up 12.6% sequentially. Gross profit was $12.3 million and gross margin was 28.5%, versus 28.3% a year ago and 25.4% in Q1. GAAP net loss improved to $2 million, or negative $0.03 per share, from a $4.8 million loss, or negative $0.08 per share, last year. Adjusted EBITDA was positive $0.3 million, versus a loss of $1.3 million in the prior-year quarter. For Q3, the company expects revenue of $44 million to $46 million and positive adjusted EBITDA. Full-year 2026 guidance is net revenue of $162 million to $168 million and adjusted EBITDA of $2 million to $3 million, up from prior breakeven expectations.

Darren Lampert framed the quarter as evidence that GrowGeneration’s transformation toward a commercial, proprietary-brand-led model is working. He emphasized stronger B2B relationships, rising adoption of proprietary brands like CharCoir and Drift Hydro, and the company’s shift toward higher-margin recurring consumables. His tone was confident and forward-looking, highlighting that the business is already at its 40% proprietary brand penetration target and that he sees further room for growth, especially if industry investment improves.

Gregory Sanders focused on the financial execution: Q2 net sales of $43.2 million, gross profit of $12.3 million, gross margin of 28.5%, operating expenses of $14.7 million, and adjusted EBITDA of $0.3 million. He pointed to store and other operating expenses falling 21.9% to $6.1 million and D&A declining to $1.5 million, while SG&A rose modestly to $6.5 million due to commercial growth investments. He also highlighted a debt-free balance sheet with $41 million of cash, cash equivalents and marketable securities, plus about $9 million remaining under the $10 million buyback authorization after repurchasing 700 thousand shares at $1.38 each. He said the full-year EBITDA raise reflects execution, better revenue quality, disciplined cost management, and expected recognition of more than $2 million in IEPA tariff refunds in Q3.

Analysts focused on why full-year EBITDA guidance increased while revenue and gross margin guidance were held steady, and management said the biggest drivers were stronger year-to-date execution and an expected IEPA tariff benefit in Q3 of more than $2 million. They also asked about the apparent Q3 revenue step-down versus last year; management explained Q3 2025 was unusually strong because of a large amount of durable sales, while 2026 should be more even quarter to quarter. On proprietary brands, management said growth is broad-based across channels, with stronger adoption in the commercial/MSO business and growing distribution, though the business is still early in its penetration cycle.