Auxly Cannabis Group (XLY) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 was $33.3M, up 18% year-over-year and 14% quarter-over-quarter; nine-month net revenue reached $87.7M, up from $74.2M year-over-year.

• Q3 2024 net income was $3.2M; nine-month net loss was $20.8M, including a $16.0M deferred tax expense on debenture conversion.

• Gross profit for Q3 2024 was $17.1M, with gross margin on finished cannabis inventory sold at 47%–52%, up significantly year-over-year.

• Cash and cash equivalents as of September 30, 2024, were $19.0M, up from $15.6M at year-end 2023.

• Adjusted EBITDA hit a record $8.3M in Q3 2024, up 60% quarter-over-quarter and 6,982% year-over-year.

Financial highlights

• Total assets stood at $264.2M as of September 30, 2024, up from $261.9M at December 31, 2023.

• Total liabilities decreased to $152.8M from $210.9M at year-end 2023.

• Equity increased to $111.5M from $51.0M at year-end 2023, mainly due to the Imperial Debt Conversion.

• Operating cash flow for the nine months ended September 30, 2024, was $13.6M, compared to $0.4M in the prior year.

• SG&A expenses for Q3 were $8.5M, down 16% year-over-year; year-to-date: $26.4M, down $2.5M.

Outlook and guidance

• Management highlights material uncertainty regarding the ability to continue as a going concern, citing insufficient cash to fund operations for the next 12 months without improved sales, margins, or refinancing.

• Focus remains on sustainable growth, profitability, and operational efficiency in core categories: vape, pre-roll, and dried flower.

• Plans include seeking additional financing, asset sales, and operational streamlining to improve cash flow.