Organigram Clocks Highest Quarterly Net Revenue In Q1

Organigram Holdings Inc OGI has posted Q1 FY22 net revenue of $30.4 million, the highest quarterly net revenue in the company's history at 22% growth sequentially and 57% Y/Y.

• The increase was primarily due to increased adult-use recreational revenue and international revenue, partly offset by lower average selling price due to product mix and a decrease in medical revenue.
• Q1 FY22 cost of sales increased by 20% to $27.9 million, primarily due to the increase in sales volume in the adult-use recreational market.
• Adjusted gross margin improved to $5.5 million, or 18% of net revenue, compared to $1.9 million, or 10% last year. 
• The improvement was largely due to reduced cultivation costs partially offset by a shift in the sales mix to value-priced products and brands with a lower ASP.
• The company posted a narrower adjusted EBITDA loss of $(1.9) million compared to $(5.7) million a year ago.
• Net loss for the quarter also decreased to $(1.3) million from a loss of $(34.3) million a year ago.
• Lower losses are attributable to higher gross margin and fair value adjustments on biological assets and inventories sold.
• Net cash used in operating activities was $9.3 million. 
• Outlook: Organigram currently anticipates Q2 net revenue significantly higher than the prior year and expects to see a sequential improvement in adjusted gross margins in Q2.
• Price Action: OGI shares are trading 5.78% higher at $1.83 during the premarket session on the last check Tuesday.