GrowGeneration (NASDAQ:GRWG) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
GrowGeneration Corp reported first quarter 2026 net sales of $38.4 million, a 7.5% increase compared to the same period last year, driven by commercial B2B business and storage solutions segment growth.
The company focused on expanding its commercial B2B platform, proprietary brands, and improving operating efficiency through cost reduction initiatives, which have led to improved profitability and a strong balance sheet with $41.1 million in cash and no debt.
Guidance for 2026 includes expected second-quarter revenue of $42 million to $44 million and approximately breakeven adjusted EBITDA for the full year, with strategic initiatives centered on revenue quality and proprietary brand penetration.
Full Transcript
OPERATOR
Hello everyone and welcome to GrowGeneration’s first quarter 2026 earnings conference call. My name is Matthew and I will be your operator for today’s call. At this time participants are in a listen only mode. Following prepared remarks, we will open the call to questions from analysts with instructions to be given at that time. This conference call is being recorded and a replay of today’s call will be available on the investor Relations section of GrowGeneration Corp website. I will now hand the call over to Phil Carlson with KCSA Strategic Communications for introductions and the reading of the safe harbor statement. Please go ahead Phil
Phil Carlson
thank you operator and welcome everyone to GrowGeneration’s first quarter 2026 earnings results conference call. With us today from GrowGeneration are Darren Lampert, Co Founder and Chief Executive Officer and Greg Sanders, Chief Financial Officer. The company’s first quarter 2026 earnings press release was issued after close of market today. A copy of this press release is available on the Investor Relations section of the GrowGeneration website at ir.growgeneration.com I would like to remind everyone that certain comments made on this call include forward looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform act of 1995. These forward looking statements are based on management’s current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements. Please refer to today’s press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any of the forward looking statements made today. During the call, we’ll use some non GAAP financial measures as we describe business performance. The SEC filing as well as the earnings press release which provide reconciliations of non GAAP financial measures to the most directly comparable GAAP measures are all available on our website. Following prepared remarks we will be happy to take your questions. We ask that you please limit yourself to one question and one follow up. If you have additional questions, please re enter the queue and we’ll take them as time allows. Now I will hand the call over to GrowGeneration’s co founder and CEO Darren Lampert. Darren, please go ahead.
Darren Lampert (Co-Founder and Chief Executive Officer)
Thanks Phil. Good afternoon everyone. Thank you for joining us to review GrowGeneration’s first quarter 2026 financial results and to discuss our outlook for the rest 2026. Over the past several years we have transformed GrowGeneration into a more focused and efficient business. Our first quarter results reflect our continued progress highlighted by our second consecutive quarter of year over year growth, improving profitability and continued expansion of our proprietary brand mix. While the first quarter is typically our seasonally slowest period, revenue exceeded our expectations driven by momentum in our commercial business and meaningful contribution from our Storage Solutions segment. As we move through 2026, we remain focused on three priorities expanding our commercial B2B platform, growing our proprietary brands across additional channels and continuing to improve operating efficiency through the cost reduction initiatives we have implemented over the past several years. Together, these initiatives are helping improve revenue quality, support margin expansion over time and position the business for more sustainable profitability. As I mentioned, our commercial B2B business remains the core driver of our growth strategy. Through GrowGen Pro, we continue to expand relationships with multi state operators, greenhouse growers and other commercial cultivation customers across North America. Within our commercial business, we continue to see increased adoption of proprietary brands such as Charcoir and Drip Hydro as customers standardize around recurring consumable programs. At the same time, we continue to reposition our legacy retail footprint into commercial sales and service centers, allowing our technical sales team to deepen customer relationships and support larger commercial accounts more efficiently. Beyond our core commercial business, we’re also expanding our proprietary brands into adjacent channels and new customer categories. Because these brands were developed for professional cultivators, we believe they are well positioned to expand into broader horticulture and consumer markets.
Darren Lampert (Co-Founder and Chief Executive Officer)
Early adoption has been very positive. During the quarter, we continue expanding distribution into lawn and garden channels through online big box retail and our direct to consumer platform the Harvest Company. We also continue expanding our commercial presence in Canada and advancing additional international distribution relationships. Importantly, these initiatives leverage the same proprietary brand portfolio and supply chain infrastructure already supporting our commercial business, allowing us to pursue growth opportunities without materially increasing complexity across the organization. We also continue to benefit from the structural cost reduction initiatives implemented over the past several years. Much of this work is now reflected in our operating structure, positioning the business to generate, improving profitability as revenue scales. We also continue to maintain a strong balance sheet, ending the quarter with 41.1 million in cash, cash equivalents and marketable securities and no debt. This financial flexibility supports continued investment in our strategic priorities while maintaining a disciplined approach to capital allocation including our share repurchase.
Darren Lampert (Co-Founder and Chief Executive Officer)
Turning to the quarter itself, first quarter revenue exceeded our expectations and marked our second consecutive quarter of of year over year revenue growth despite operating with a smaller and more efficient footprint. This performance was driven primarily by continued momentum in our commercial business, expanding proprietary brand penetration and strong growth in our storage solutions segment Proprietary brand sales represented 37% of cultivation and gardening revenue during the quarter, reflecting continued progress in shifting our sales mix towards higher value recurring consumable proprietary branded products. We also saw strong performance from our Storage Solutions segment where revenue increased 35.5% year over year. This segment continues to benefit from increasing capital investment activity across a broader range of end markets and contributed meaningfully to both revenue growth and profitability during the quarter. Overall, we believe the quarter reflects continued progress against our strategy to build a more focused, commercially driven and profitable business from a profitability standpoint.
Darren Lampert (Co-Founder and Chief Executive Officer)
Our first quarter results highlight our continued progress in improving the quality and efficiency of our business. While gross margins were impacted by factors related to store consolidation activity and product mix during the quarter, we believe these pressures are largely short term in nature. At the same time, we continue to see meaningful benefits from the cost reduction initiatives implemented over the past several years which contributed to improved profitability during the quarter.
Darren Lampert (Co-Founder and Chief Executive Officer)
As we move through 2026, we expect improving gross margins, continued operating discipline and increasing operating leverage. Looking to the second quarter, we expect revenue in the range of 42 million to 44 million along with a return to positive adjusted EBITDA for the full year. We remain focused on expanding proprietary brand penetration towards our approximately 40% target and achieving approximately breakeven adjusted EBITDA for 2026. Before I hand the call to Greg, I’d like to briefly comment on the regulatory environment. On April 22, the Acting Attorney General signed an order moving state licensed medical Cannabis to Schedule 3 of the Controlled Substance act, providing immediate 280 e tax relief to qualifying operators. This is a meaningful tailwind for our customers and as their financial position strengthens, their capacity to invest in the cultivation infrastructure we provide grows with it. While the process remains ongoing, we believe GrowGeneration is well positioned to support our customers as the industry continues to mature and evolve.
Darren Lampert (Co-Founder and Chief Executive Officer)
That concludes my remarks. Now I’ll turn the call over to our CFO Greg Sanders.
Greg Sanders (Chief Financial Officer)
Thank you Darren and good afternoon everyone. I’ll begin with a review of our first quarter 2026 results and then I’ll provide additional context on our outlook for the year. Overall, our first quarter performance was consistent with our expectations and reflected continued progress on our key operating priorities including proprietary brand mix expansion, cost discipline and improving adjusted EBITDA. For the first quarter of 2026, GrowGeneration reported net sales of 38.4 million, up 7.5% compared to 35.7 million during the same …
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