IM Cannabis Corp. Q1 FY2025 earnings call

• In Q1 2025, IMC reached net profit with an 87% improvement in gross margin versus Q1 2024.
• With an integrated supply chain, 12 new strains were launched in Germany in Q1, driving about EUR 3 million or 39% of cannabis FLOWR sales in Germany, exceeding the last 6 months of 2024.
• The Israeli business was impacted by shifting focus and resources to Germany and supply delays, with Israeli revenue declining 56% vs Q1 2024, but German business grew 569% vs Q1 2024, offsetting the Israeli decline.
• Cost-cutting measures in Israel in 2024 led to an 87% increase in gross margin and 94% increase in gross profit.

In Q1 2025, IM Cannabis' revenue was $12.5 million compared to $12.1 million in Q1 2024, an increase of $0.4 million or 4%. The German region revenue in Q1 increased by 569% versus Q1 2024, with Germany's share of total revenue in Q1 2025 significantly increasing to 62%. The Israeli revenue declined by 56% versus Q1 2024. Cost of revenue for Q1 2025 was $9.1 million compared to $10.3 million in Q1 2024, a decrease of $1.2 million or 12%. Gross profit for Q1 2025 was $3.4 million compared to $1.8 million in Q1 2024, an increase of $1.6 million or 94%.

Q: Why is it important to approve the 25% ownership of Focus in the upcoming meeting given strict capital?

A: Oren Shuster mentioned it's a long regulatory process. Uri Birenberg explained it's about clearing balances between companies, holding 100% of Focus shares for tax purposes and avoiding issues with tax authorities by using external valuation for the 26% acquisition