Leafly Holdings, Inc. LFLY, the online cannabis discovery marketplace and resource for cannabis consumers reported its financial results late Thursday for its third quarter ended September 30, 2022.
CEO Yoko Miyashita said Leafly is helping brands and retailers reach more consumers at a time when driving business is critically important.
“Retailers are offering deals on Leafly at record numbers as consumers are looking for the best value. We are encouraged by recent partnerships that allow us to drive new customer acquisition and online orders across the platform,” Miyashita said, adding that the company has implemented measures to become more efficient.
“The cost reductions we implemented were aimed at setting us on a clear path to greater efficiency and monetization as growth in advertising spend returns and the market accelerates. The team is squarely focused on our highest priority initiatives and on optimizing the products we have already developed to maintain our position as a leader in cannabis and build the business for the long term,” she explained.
Suresh Krishnaswamy, CFO of Leafly added: “In October, we right-sized the business through headcount reductions and additional cuts in spending to accelerate our path to profitability (...) We are focused on managing our cash while preserving our ability to respond to opportunities in the market.”
Third Quarter 2022 Financial Results
Total revenue was $11.8 million, up 8.1% over Q3 2021.
Gross margin was 87.1%, compared to 88.4% in Q3 2021.
Total operating expense was $16.3 million, up 21.0% over $13.5 million in Q3 2021, and down 16.3% from Q2 2022.
Net income was $15.5 million, and included $22.3 million of gains on derivative liabilities, due to fair value accounting, compared to a net loss of $4.5 million in Q3 2021.
Adjusted EBITDA loss was $5.2 million, compared to Adjusted EBITDA loss of $3.6 million in Q3 2021.
Ended the quarter with $27.8 million of cash, after repurchasing over 3 million shares of our common stock using $31.3 million of restricted cash.
- Q3 2022 revenue from retail accounts was $9.0 million, up 5.1% over Q3 2021.
- Q3 2022 revenue from brands was $2.7 million, up 19.6% over Q3 2021.
- Recently partnered with Uber Eats to bring a third-party delivery platform to cannabis retailers and consumers in the local Toronto market.
- Integrated with Onfleet delivery software to make it easier for cannabis retailers to manage delivery fulfillment of online orders placed directly on the Leafly platform all the way to the customer’s doorstep.
- Expanded partnership with BLAZE, offering cannabis retailers even greater operational efficiency while enhancing the consumer online shopping experience.
- On October 18, 2022, Leafly announced the realignment of cost structure for expected annual cash operating cost reductions of approximately $16.0 million beginning in 2023.
For the full year 2022, Leafly expects revenue to be between $47.0 million and $48.0 million and Adjusted EBITDA loss to be approximately $26.0 million.
Leafly stocks were trading 3.76% higher at $0.80 per share at the time of market close on Thursday.
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