HEXO Q3 FY23 Revenue Declines 11% QoQ And 53% YoY, Here Are The Details

Zinger Key Points
  • Gross loss of CA$9.4 million, compared to a gross loss of CA$5.3 million in Q3 2022.
  • Net loss of CA$117.2 million, compared to a loss of $145 million in Q3 2022.

HEXO Corp. HEXO HEXO released its financial results for the third quarter of the 2023 fiscal year, revealing total net revenue of CA$21.6 million ($16.2 million), an 11% sequential decline. The decline was, among other factors, driven by lower adult-use sales in Alberta, certain supply issues and delisted products in Quebec, as well as a lower sales focus in the smaller markets of Saskatchewan and Manitoba. Due to increased competition, net sales declined 53% relative to CA$45.6 million in Q3 2022 as a result of the HEXO brand’s decreased market share and performance in the key provincial markets of Ontario, Alberta and Québec. The Zenabis subsidiary (which was deconsolidated in Q4 2022 upon loss of control), contributed CA$8.4 million of net sales in Q3’22, which are no longer applicable to the company.

Q3 2023 Financial Highlights

  • Gross loss of CA$9.4 million, compared to a gross loss of CA$5.3 million in Q3 2022.

  • Net loss of CA$117.2 million, compared to a loss of $145 million in Q3 2022.

  • Adjusted EBITDA was negative CA$3.9 million, an increased loss of CA$1.5 million quarter over quarter.

  • Cash and cash equivalents at the end of the period were CA$20 million.

“In the third quarter, we entered into a definitive arrangement agreement whereby Tilray TLRY will acquire all outstanding shares of HEXO,” stated Charlie Bowman, president and CEO of HEXO. “We continue to expect the transaction will be completed by June 30, 2023.”

Shareholders Approve Acquisition by Way of Arrangement With Tilray Brands

The company also announced that at the special meeting of its common shareholders, its common shareholders approved the arrangement agreement, as amended, with Tilray, whereby Tilray will acquire, by way of court-approved plan of arrangement, all of the issued and outstanding common shares of the company.

Completion of the Arrangement remains subject to closing conditions as set forth in the arrangement agreement, as amended, including approval of the Ontario Superior Court of Justice (Commercial List). The company anticipates returning to the Court on June 19, 2023 to seek a final order of the Court approving the arrangement. Assuming that the conditions to closing are satisfied or waived, it is currently expected that the arrangement will be completed by June 30, 2023.

Photo by Esteban López on Unsplash

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