Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| So we're building on our strengths and doing a good job in delivering on what we commit to do |
| In regards to our third quarter performance and consistent with expectations, we marked another sequential improvement in both revenues and adjusted EBITDA |
| And we're delivering good strong service levels |
| I wish we could forecast it better for sure, but it's quite amazing how quickly they can pop up and how fast the clients want to move |
| So it's a nice pleasant surprise when it happens for sure |
| Revenue of $20.9 million, a sequential improvement of $2.1 million or 11% came very close to exceeding our all-time quarterly high of $21.1 million reached in Q1 '22 |
| Adjusted EBITDA improved by $0.7 million sequentially to negative $1.3 million in the third quarter of 2023, which is an improvement of $1.0 million compared to the prior year period |
| First, our Board as well as our leadership team and their teams continue to strongly believe in the future of the company |
| I'm excited to report that we continue to execute and gain momentum on this strategy as Urban-gro has evolved into a multi-sector focused professional services consulting firm |
| And I feel that we're in a place to better serve our clients if we have a cost-plus markup |
| So we're giving a good service level |
| Our diversification has enabled us to keep our experienced team strong and intact |
| And as a result, we remain well positioned in the sector, and we'll be ready to handle the surge in demand when the cannabis market rebounds |
| So it's nice to see that start to move forward, and it would be a good strong accomplishment for Ingruto go to the next stage, past design with one of these entities |
| As I mentioned at the start, we are top and loaded, and so we have a lot of room to grow within and really be able to register good, strong, profitable quarters and quarters ahead |
| Now shifting to our guidance through the fourth quarter '23, demonstrating our ongoing commitment to deliver sequential growth on both the top and bottom line, we anticipate revenues to be approximately $30 million, which I'd add would be a new record for us by more than 40%, and we expect to realize breakeven to slightly positive adjusted EBITDA, which would mark an important shift back to positive cash flow and subsequently meeting our goal that we've been working hard to achieve this past year |
| But with our insight into the funnel, we're highly confident that, that revenue is going to be there |
| Despite the ongoing headwinds within the CEA sectors, our diversification strategy has served as a source of strength to the company |
| And again, great to see that added flexibility |
| We remain very optimistic the industry needs something significant like rescheduling for sure |
| So very optimistic, the states like New Jersey is rapidly opening up now |
| And third, we're doing everything in our power to maintain this positive momentum |
| In the third quarter of 2023, we generated revenue of $20.9 million, which represents a sequential improvement of $2.1 million or 11% over the $18.8 million of revenue generated in the second quarter of 2023 and an $8.6 million or 69% improvement over the $12.4 million of revenue generated in the prior year period |
| If we continue to have good strong CEA announcements this quarter, like we started to see in Q3, I would say you could see that begin to go more towards the 50-50 mark in Q1 and Q2 next year as the cannabis facilities or the vertical farm facilities ramp up |
| Supported by our increasing backlog and pipeline, we remain confident that our cash position, combined with our asset-based nondilutive lending facility, will provide us the necessary flexibility to manage through the macroeconomic market circumstances |
| The sequential improvement in our adjusted EBITDA was driven by lower operating expenses, as previously discussed |
| So I remain positive that, that project can resume at some point in the future, but perhaps it won't be with that specific client |
| It continues to gain momentum, and we have alignment on our goals across our organization |
| This is evidenced in the third period where we had two such clients move forward to construction, and we'll continue to announce these successes as contracts are signed |
| And while our significant revenues this quarter resulted in retiring 27% of our Q3 beginning backlog, we signed enough new contracts to drive our backlog entering the fourth quarter to $84 million, a 6% sequential increase |
| Statement |
|---|
| In the CEA sector, our equipment revenues continue to be compressed by the weak cannabis market |
| It's just unfortunately with the falloff in cannabis and especially with the way it hurt equipment, just kind of lacked is from the standpoint of our income statement with that downturn |
| This increase was offset by a decrease in equipment systems revenue, which, as Brad discussed earlier, we attribute to the ongoing softness in the cannabis sector |
| During the first nine months of '23, we have experienced a period-over-period decline of more than $20 million of 18% margin business |
| The decrease in gross profit margin for both of these comparative periods was driven by the impact of revenue mix where we experienced a substantial increase in lower margin construction design build revenue as well as a decrease in higher-margin equipment systems revenue |
| It could go into Q1 or Q2, but there's a lot of hurdles, of course, facing the industry |
| So it was a sacrifice that we're willing to make in order to maintain the brain power for future quarters |
| This decrease in adjusted EBITDA was predominantly due to the combined impact of an increase in general and administrative expenses of $3.2 million and a reduction in gross profit of $2.4 million |
| But for us, we have a lot of clients in these states that just have regulatory delays |
| Net loss was $14.0 million compared to a net loss of $11.1 million, and adjusted EBITDA was negative $6.8 million compared to negative $2.2 million in the prior year comparable period |
| Net loss was $3.4 million or a negative $0.29 per diluted share in the current quarter compared to a net loss of $8.7 million or a negative $0.081 per diluted share in the prior year period |
| However, it's also one that will continue to slowly dissipate |
| But we don't have to wait for an overall industry turnaround to successfully generate significant revenues and profits |
| It's now most highly unlikely that it will happen |
| While it's impossible to ignore the negative impact that this has had on our financial performance |
| For Urban-gro today and apart from our cannabis clients lacking access to much needed capital, the primary block to more rapidly increasing our business in this market is one that we cannot control |
| There are a number of legalized states, like New York, Alabama and Georgia, among others, for example, that have paused the awarding of licenses due to regulatory and legal delays within their state |
| So I'm assuming you see things that we don't see, right, as far as kind of that optimism |
| Although the CEA sector remains an important component of our future growth, our success is no longer fully dependent on its success |
| So that equipment changes, you see some inflection points hit in the cannabis space that can decrease |
Please consider a small donation if you think this website provides you with relevant information