Decibel Cannabis Company (DB) Q4 2024 earnings summary

Executive summary

• Ended 2024 with strong momentum, improved free cash flow, and successful integration of AgMedica, removing the going concern note.

• Anticipates a softer Q1 2025 due to timing of international shipments, with a ramp-up in Q2 as export volumes accelerate.

Financial highlights

• Q4 2024 net revenue was $25.3 million, up 0.4% year-over-year, driven by AgMedica contributions offset by lower Canadian recreational sales.

• Adjusted EBITDA for Q4 was $5.2 million, up 4% year-over-year; free cash flow was $2.2 million, up 18%.

• Adjusted net income for Q4 was $1.0 million, a $1.2 million improvement year-over-year.

• Full-year 2024 net revenue reached $92.5 million; adjusted EBITDA was $25.1 million; free cash flow was $6.1 million.

• Gross margin before fair value adjustments was 49% in Q4 2024, up from 46% in Q4 2023.

Outlook and guidance

• 2025 guidance: net revenue of $130 million, adjusted EBITDA of $25 million, adjusted free cash flow of $20 million, and debt to EBITDA ratio below 1.4x.

• Plans to expand exports to 9 markets from 7, with AgMedica expected to contribute $30 million in net revenue and $4 million in EBITDA in 2025.

• Expects a significant ramp-up in global sales starting Q2 2025 as contracted international orders ship.