Leafly Holdings Reports Decrease in Revenue and Focuses on Expense Management

Leafly Holdings, Inc. LFLY, a leading cannabis e-commerce platform, has publicly disclosed its financial standings for the third quarter ending September 30, 2023. The report indicates a 10% yearly decline in revenue, dropping to $10.6 million. Despite operating in a challenging cannabis market fraught with obstacles such as restricted banking access, licensing delays, and shrinking margins, Leafly's commitment to aiding retailers with technology for driving consumer sales and enhancing e-commerce continues unwavering.

Financial Performance in Q3 2023

The company's gross profit saw a dip to $9.42 million from the previous year's $10.2 million, while gross margin presented a slight improvement of 89%, compared to 87% recorded in the same period last year. A significant effort to cut expenses led to a 33% reduction in total operating expenses, which came down to $10.9 million from the preceding year's $16.3 million. Despite these measures, Leafly experienced a net loss of $2.2 million, in contrast to a net income of $15.5 million in the same quarter of the preceding year, which included a substantial non-cash gain. Nonetheless, the adjusted EBITDA saw a positive shift with a minor loss of $0.2 million, demonstrating an improvement from a larger $5.2 million loss in 2022’s third quarter.

By the quarter's end, Leafly was able to maintain its cash reserves at $14.5 million, excluding restricted cash, which closely mirrored the financial position from the previous quarter. The company also successfully regained compliance with Nasdaq's minimum bid price regulation as of September 29, 2023.

Strategies and Expectations Going Forward

In light of the current business climate, Leafly is concentrating on operating efficiently with an emphasis on cost management. This approach is reflected in its third-quarter performance, encapsulating the struggles faced by its retail and brand customers. Looking into the fourth quarter of 2023, Leafly projects revenues to be around $9.5 million with an expected adjusted EBITDA loss of approximately $1.3 million.

In terms of stock activity, LFLY shares experienced a minor pre-market downturn of 1.73%, trading at $6.25 per share on a recent Friday morning.

Leafly, Revenue, Profitability