IM Cannabis Corp (IMCC) announced its financial results for the first quarter of 2025, showcasing a notable shift towards profitability. The company reported revenue of 12.5 million CAD, marking a 4% increase from 12.1 million CAD in the same period last year.
Key financial highlights include: – Gross Margin: The gross margin improved by 87% compared to Q1 2024, indicating better cost management and operational adjustments. – Net Profit: IM Cannabis achieved a net profit of 0.2 million CAD in Q1 2025, a significant turnaround from a loss of 6 million CAD in Q1 2024. – Adjusted EBITDA: The company reported a positive adjusted EBITDA of 0.6 million CAD, reversing a loss of 2.2 million CAD from the previous year.
A major contributor to this financial recovery was the substantial growth in the German market, where revenue surged by 569% compared to Q1 2024. This growth reflects the company’s successful expansion efforts in Germany, which have bolstered overall sales figures.
Conversely, the Israeli market presented challenges, as revenue declined by 56% compared to the previous year. This drop was partly attributed to the cancellation of the organin bill, resulting in an estimated revenue loss of about 3.5 million CAD. The company is currently grappling with the impact of this decline on its overall revenue distribution.
IM Cannabis also successfully reduced its operating expenses by 56%, decreasing them from 7.4 million CAD in Q1 2024 to 3.3 million CAD in Q1 2025. This significant reduction contributes to the company’s improved financial health.
The gross profit for the quarter increased by 94%, reaching 3.4 million CAD compared to 1.8 million CAD in Q1 2024. As of March 31, 2025, the company reported a cash balance of 1.4 million CAD, up from 0.9 million CAD at the end of the previous year. Total assets rose by 15% to 44,934 CAD, while total liabilities increased by 16% to 41,761 CAD.
Despite achieving profitability, IM Cannabis faces ongoing challenges in balancing its operations between different markets, particularly as it shifts focus from Israel to Germany. The company is also exploring additional sources of capital and financing to sustain its future operations.
During a recent earnings call, executives highlighted the importance of an upcoming meeting to approve the 25% ownership of a new company, which is part of a regulatory process aimed at restructuring balances and converting long-term loans into equity investments. This move is intended to comply with tax regulations and mitigate potential tax liabilities.
Overall, IM Cannabis Corp’s Q1 2025 results demonstrate a positive trend toward profitability, driven primarily by growth in the German market, while the company continues to navigate challenges in its home market of Israel.
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