Release Date: March 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• IM Cannabis Corp (NASDAQ:IMCC) experienced extraordinary growth in the German market following partial legalization in April 2024.

• The company reduced operating expenses by 53% since 2022, with a significant impact in Q4 2024.

• IM Cannabis Corp (NASDAQ:IMCC) achieved a positive adjusted EBITDA of $0.5 million in Q4 2024, compared to a loss of $4.3 million in Q4 2023.

• Sales in Germany increased by 280% in Q4 2024 compared to Q4 2023, contributing significantly to overall revenue growth.

• The company successfully integrated its supply chain and launched 16 new strains in 2024, supporting future growth.

• IM Cannabis Corp (NASDAQ:IMCC) faced a net loss of $11.8 million for 2024, an increase from $10.2 million in 2023.

• The Israeli market saw a revenue decline due to the cancellation of a significant agreement, impacting overall performance.

• Gross profit decreased by 14% in 2024 compared to 2023, affected by inventory write-offs and increased material costs.

• The company anticipates ongoing price compression in the competitive German market, which may impact future margins.

• Cash and cash equivalents decreased to $0.9 million as of December 31, 2024, from $1.8 million the previous year, indicating potential liquidity concerns.

• Warning! GuruFocus has detected 5 Warning Signs with IMCC.

Q: Can you explain the dynamics in the German market during Q4 2024, as growth seemed to slow compared to previous quarters? A: (CEO) In Q4, we experienced some delays, but these were temporary. We are building a stronger supply chain for 2025, and Q1 is already showing promising results. The slowdown was not indicative of ongoing issues but rather part of the supply chain development process.

Q: How is the competitive landscape in Germany affecting your operations, particularly regarding pricing? A: (CEO) The German market is dynamic and competitive, with consistent leading competitors. We anticipate price compression, which we have factored into our plans. Despite this, our value products remain successful, and we do not foresee major changes in the competitive landscape.

Q: With the expected price compression, how do you foresee the margin profile evolving in 2025? A: (CEO) While political changes in Germany add uncertainty, we do not expect margins to decrease. In fact, they might improve as we have cleared old inventory and are set to meet high demand with new stock. The 20% gross margin seen in 2024 is not our target level.