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22nd Century Group Q1 2025 Earnings Report
22nd Century Group reported its first quarter 2025 financial results, showing increased sales and reduced operating expenses.
Key Takeaways
22nd Century Group reported a significant sequential increase in sales by approximately 50% in Q1 2025, driven by new sales activity across internal and external brand assets. The company also achieved its lowest quarterly operating expenses since the 2023 restructuring, contributing to improved operating leverage.
Net revenues increased approximately 50% sequentially to $6.0 million.
Operating expenses decreased to $2.0 million, the lowest since the 2023 restructuring.
The company is preparing for the first VLN® partner brand shipments with major customers.
Filings have been made for new reduced nicotine content and conventional product authorizations in all 50 states.
22nd Century Group
22nd Century Group
22nd Century Group Revenue by Segment
Revenue by Segment
Contract Mfg. - Cigarettes Revenue
CapyFin.comContract Mfg. - Filtered Cigars Revenue
CapyFin.comContract Mfg. - Cigarillos Revenue
CapyFin.comVLN® Cigarettes Revenue
CapyFin.com Forward Guidance
The company anticipates continued positive trends in 2025, driven by new opportunities to increase volume across VLN®, core CMO, and filtered cigar businesses, with a focus on partner-branded products and leveraging investments made in 2024.
Positive Outlook
- Expect to build on positive trends in 2025 by securing new opportunities to drive volume across VLN®, core CMO, and filtered cigar businesses.
- Anticipate increased sales volumes for partner branded VLN® products through partner-supported marketing and outreach.
- Investments made in 2024 to transition to profitable CMO activity are expected to continue paying off with increased volumes from existing, returning, and new customers.
- Sales are expected to increase by approximately 50% from the fourth quarter, with operating leverage flowing through the low-cost operating model.
- Continued execution of the growth strategy in 2025, including advancing customer negotiations for VLN® distribution and new partner brands.
Challenges Ahead
- Cigarillo distribution net revenues were negligible in Q1 2025, reflecting the time necessary for initial stocking orders to sell through before reorders are fulfilled in the second half of 2025.
- VLN® cigarette net revenues reflect return accruals for product previously shipped, indicating a negative revenue impact in the current quarter.
- The company's financial performance is subject to various risks as outlined in their Annual Report on Form 10-K.
- Actual results might differ materially from forward-looking statements due to various factors.
- The company does not intend to update forward-looking statements except as required by law.
Revenue & Expenses
Visualization of income flow from segment revenue to net income