Leafly (LFLY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $8.4M, down 21% year-over-year, with net loss of $1.1M and positive adjusted EBITDA of $0.4M for the second consecutive quarter.

• Cost reductions from 2023 restructuring led to a 27% decrease in operating expenses, improving EBITDA and narrowing net loss.

• Retail revenue stabilized sequentially, while brand revenue was subdued due to seasonal factors but expected to improve in Q4.

• The company faces substantial doubt about its ability to continue as a going concern due to inability to repay $29.4M in convertible notes maturing January 2025.

• Nasdaq has issued a delisting determination; a hearing is scheduled for December 2024, with trading currently stayed.

Financial highlights

• Q3 2024 revenue: $8.4M, down 21% year-over-year; nine-month revenue: $26.1M, down 20%.

• Net loss for Q3 2024: $1.1M, improved from $2.2M in Q3 2023; nine-month net loss: $4.8M, improved from $9.0M.

• Adjusted EBITDA for Q3 2024: $0.4M, up from $(0.2)M in Q3 2023; nine-month Adjusted EBITDA: $(6)K, up from $(3.4)M.

• Cash and equivalents at September 30, 2024: $13.6M–$13.8M, down from $15.5M at year-end 2023.

• Operating expenses for Q3 2024: $8.0M, down 27% year-over-year.

Outlook and guidance

• No guidance provided for Q4 2024 or full year 2024.

• Management expects to realize the full-year impact of 2023 cost reductions in 2024.

• Ongoing efforts to improve revenue include hiring sales professionals and refining sales strategies.

• The company is actively seeking financing or strategic alternatives to address debt maturity and liquidity needs.

• Focus remains on restructuring convertible notes due January 31, 2025, and addressing going concern status.