Indiva Limited Sees 143% YoY Spike In Q3 Revenue, Maintains Leading Market Share In Edibles Category

Canadian producer of cannabis edibles Indiva Limited NDVA NDVAF announced its financial and operating results Tuesday for the third quarter of fiscal 2021 ended September 30, revealing CA$8.3 million ($6.62 million) in gross revenue, up by 143% year-over-year.

Year-to-date, gross revenue spiked 194% year-over-year to CA$25.04 million. This represents the company's 7th consecutive quarter of year-over-year net revenue growth.

Q3 2021 Financial Highlights

• Net revenue totaled  CA$7.72 million, representing a 155% increase year-over-year and a decline of 15% quarter-over-quarter.
• Net revenue from edible products grew to CA$6.92 million, up 226% from CA$2.12 million in the prior-year period and down 18% from CA$8.43 million in the previous quarter.
• Edible product sales represent 90% of net revenue.
• Gross profit, excluding fair value adjustments, impairments and one-time items improved by 320% year-over-year to CA$2.82 million.
• Adjusted gross margin improved to a record 37.8% of net revenue versus 34% in the second quarter of 2021 and 22.2% in the corresponding period of last year.
• Gross profit, excluding fair value adjustments, impairments and one-time items declined 8.6% sequentially due to lower quarterly revenues, offset by lower distillate costs.
• Sold products containing 42 million milligrams of distillate, the active ingredient in edible products, which represents a 19% decrease when compared to the 52 million milligrams in the product sold in the prior quarter, and a 313% increase compared to 10 million milligrams sold in the same quarter of 2020.
• Operating expenses were flat sequentially at CA$3 million versus the previous quarter, driven by higher marketing costs and lower sales commissions.
• Operating expenses as a percentage of net revenue increased to 39.2% versus 34.1% in the prior period but decreased significantly versus 71.6% in the corresponding quarter of last year.
• Adjusted EBITDA remained positive, declining sequentially in the third quarter to CA$0.17 million versus CA$0.54 million in the second quarter and a loss of CA$1.1 million in the same quarter of 2020, driven by lower sequential revenue versus the prior quarter, offset by lower distillate costs.
• Comprehensive net loss was CA$6.43 million for the quarter and included one-time expenses and non-cash charges totaling CA$5.44 million.
• Net loss per share was CA$0.05 versus CA$0.04 in the third quarter of 2020.
• The cash balance at the end of the quarter, which excludes the debt financing and warrant proceeds received subsequent to quarter-end was CA$2.6 million.

Year-To-Date 2021 Financial Highlights

• Net revenue increased 203% year-over-year to CA$23 million.
• Gross profit increased to CA$7.08 million, or 31.1% of net revenue, versus CA$1.31 million or 17.3% of net revenue in the corresponding nine-month period last year.
• Operating expenses increased by 55.4% to CA$8.3 million but declined as a percentage of revenue to 36.2% from 70.5%.
• Adjusted EBITDA was positive at CA$0.22 million versus a loss of CA$3.25 million in the nine months last year.

"Indiva maintained leading market share in the edibles category in the third quarter, driven by new product introductions and organic growth of existing SKUs," Niel Marotta, president and CEO of Indiva said. "Looking forward to the fourth quarter of 2021, we expect to see sequential net revenue growth based on continued organic growth, the strength of purchase orders booked to date, and expected new SKU and product introductions."

The company expects sequential and year-over-year net revenue growth and continued margin improvement in the fourth quarter of 2021 as a result of new SKU and product introductions and improved operating efficiencies.

In the fourth quarter of 2021 and the first three months of fiscal 2022, Indiva intends to launch several new SKUs, including new Wana gummies and Wana Quick SKUs, as well as chewable fruit tablets dubbed Jewels.

More recent news from Indiva:

• Indiva's Shares Jump On Additional $8.5M Investment From Sundial
• Indiva Q2 Revenue Spikes 255% Hitting Record $7.2M, Positive Adjusted EBITDA
• Cannabis Movers & Shakers: Indiva, Parallel, Open Book Extracts, Adnant, DELIC Holdings
• Sundial Closes $22M Strategic Investment In Indiva

NDVAF Price Action

Indiva Limited's shares traded 5.34% lower at $0.2675 per share at the time of writing late Tuesday morning.

Photo: Courtesy of Indiva Limited