RYTHM Reports Q4 and FY 2025 Financial Results

ROLLING MEADOWS – RYTHM Inc. delivered a significant revenue leap in 2025, fueled by licensing deals in the fast-growing low-dose Cannabis alternatives market. Full-year sales hit $17.3 million, yet the company posted a $33.3 million net loss, down from $41.7 million the year before.

In its Q4 earnings release, RYTHM detailed quarterly revenue of $10.7 million, up 164% from the third quarter. Much of that came from $7 million in licensing fees, which carried a 75% gross margin, highlighting the profitability of intellectual property deals over direct manufacturing. The firm licensed its beverage and edible brands to Green Thumb Industries (GTI), generating $7.8 million in fees for the year. Distribution expanded to over 6,000 retail spots in 18 states, including 800 Circle K stores, and a first-of-its-kind deal at Chicago’s United Center for hemp-derived THC beverages.

Chairman and Interim CEO Ben Kovler called 2025 “transformational,” noting brand strength amid rising THC demand despite alcohol trends.

Operating expenses ballooned to $42.5 million for the year, up from $5 million in 2024, reflecting heavy investments in brand acquisitions and distribution. Cash stood at $32.2 million at year-end, but with $80 million in convertible notes outstanding [potentially adding 3 million shares upon conversion] and warrants for 10.9 million more shares, dilution remains a key concern.

Yet the numbers reveal vulnerabilities.

Revenue growth stems from a near-zero base, and losses persist despite margin gains. Cash burn from operations, while not detailed, appears substantial given expense ramps and debt loads. Regulatory threats, including a potential federal hemp THC ban by November 2026, add uncertainty – RHYTHM’s hemp focus hedges state Cannabis limits but hinges on policy shifts. Meanwhile, GTI saw its own 2025 revenue top $1.2 billion, underscoring the potential scale if integration deepens.