OrganiGram (OGI) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 Fiscal 2024 rose 25% year-over-year to $41.1 million, driven by recreational cannabis sales, new product launches, and growth in the Canadian and international markets.

• Achieved net income of $2.8 million, reversing a significant loss in the prior year, and adjusted EBITDA improved to $3.5 million from a loss of $2.9 million.

• Expanded international presence with a CAD 21 million (or €14 million) investment in Germany's Sanity Group and new supply agreements in Australia and the UK.

• Pro-forma cash position reached $173 million after BAT investment tranches, with negligible debt, providing strong financial flexibility.

• Launched FAST nanoemulsion technology for edibles, demonstrating up to 50% faster onset and improved bioavailability.

Financial highlights

• Gross revenue increased 31% to $63.6 million; net revenue up 25% to $41.1 million year-over-year.

• Adjusted gross margin rose to $14.6 million (36% of net revenue), up from $6.1 million (19%) in Q3 2023.

• SG&A expenses decreased 22% to $14.8 million, reflecting cost controls.

• Net cash used in operating activities before working capital changes dropped to $0.2 million from $14.8 million last year.

• Cash and short-term investments (excluding restricted cash) totaled $80.1 million as of June 30, 2024.

Outlook and guidance

• Management expects continued growth in net revenue, adjusted gross margin, and adjusted EBITDA for fiscal 2024 and beyond.

• Anticipates further international growth with new supply agreements and plans to complete EU-GMP certification for the Moncton facility by year-end.

• Plans to increase seed-based production to 30% by year-end and expand international partnerships.

• Ongoing focus on innovation, including commercialization of FAST nanoemulsion technology and new ingestible launches.

• On track to achieve CAD 10 million in annual cost savings from automation and process improvements.