Curaleaf 'On Track To Achieve $1.2 To $1.3B Annual Revenue Guidance,' Q3 Revenue Grows 74% YoY

Curaleaf Holdings, Inc. CURA (OTCQX: CURLF) reported its third-quarter earnings Tuesday with total revenue of $317.13 million, up by 74% year-over-year from $182.41 million. Retail revenue reached $225 million, representing 1% sequential growth and 66% year-over-year growth.

“While we faced some transient headwinds during the quarter, we continued to execute well against our strategic initiatives, prioritizing growth and gaining market share,” Boris Jordan, executive chairman of Curaleaf stated. “As a result, we remain on track to achieve our $1.2 to $1.3 billion annual revenue guidance, albeit at the lower end of the range, representing growth of over 90%. Strategic M&A remains a key pillar our growth plan. We closed the Los Sueños Farms acquisition in October, and today announced another highly strategic deal to acquire Tryke Companies, a vertically integrated MSO which bolsters our leadership position in Nevada, Arizona, and Utah and will be immediately accretive to our margins and cash flow." 

Q3 Financial Highlight

• Wholesale revenue grew 3% sequentially and 105% year-over-year to $92 million and represented 29% of total revenue;
• Gross profit on cannabis sales was $144 million for the third quarter of 2021, an increase of 61% from $90 million in the third quarter of 2020;
• Gross profit margin was 45.6%, compared with 49.6% in the prior quarter and 49.7% in the third quarter of 2020;
• Net loss amounted to $57 million, versus a net loss of $9 million in the same period of last year; 
• Adjusted EBITDA was $71 million for the third quarter of 2021, an increase of 69% from $42 million in the third quarter of 2020; The year-over-year increase was mainly driven by revenue growth;
• At the end of the reporting period, the company had $317 million of cash and $342 million of outstanding debt net of unamortized debt discounts.

Q3 Operating Highlights

• Opened two new dispensaries located in Bordentown, New Jersey and Wells, Maine bringing total retail locations to 109 as of September 30, 2021;
• Expanded the number of U.S. wholesale accounts by 6% sequentially, exceeding 2,100 active accounts;
• On track to organically add 275,000 square feet of flower canopy by year-end 2021;
• Introduced Select Squeeze THC infused beverage enhancer in several new markets including Michigan, New Jersey and New York;
• Launched Cliq by Select premium vape system in Arizona, California, Nevada and Oregon;

Post Q3 Operational Milestones 

• Closed the previously announced acquisition of Los Sueños Farms and its related entities bringing total Curaleaf cultivation capacity to approximately 4.4 million square feet and retail locations to 111 as of November 8, 2021;
• Entered into a definitive agreement to acquire Tryke Companies, which runs the Reef-branded dispensaries for $286 million in cash and stock. Ahead of the earnings release, Cantor Fitzgerald’s Pablo Zuanic highlighted that this acquisition may help improve the company’s operating margins.

Price Action 

Curaleaf’s shares closed Monday market session 2.58% higher at $10.32 per share. 

Photo: Courtesy of Add Weed on Unsplash