Cannabis Earnings: Agrify Q3 Sales Spike 460% YoY, Raises F21 Sales Guidance to $60M-$62M

Vertically integrated cannabis company Agrify Corporation AGFY announced its financial results Wednesday for the third quarter of fiscal 2021, revealing a 460% year-over-year and 33% sequential increase in revenue to $15.8 million.

In the nine months ended September 30, total revenue amounted to $34.6 million.

Moreover, new bookings were $32.2 million for the period, and the total backlog increased to $117.5 million from $101.1 million at the end of the previous quarter.

"We are thrilled to announce that Q3 was another strong and impactful quarter for our team," Raymond Chang, the company's CEO said. "In the third quarter, we generated new highs in quarterly bookings and revenue while also moving our headquarters to Billerica, Massachusetts, launching Agrify University, securing new business opportunities and partnerships, and expanding our relationship with one of our valued legacy customers."

Q3 2021 Financial Highlights

Gross loss totaled $380 000 compared to $199 000 in the same quarter of 2020.
The gross margin was negative at 2.4% versus 7.1% a year ago.
Total operating expenses were $9.4 million, compared to $2.4 million in the prior year's period.
Net loss totaled $9.75 million versus $2.7 million in the corresponding quarter of 2020.
Adjusted EBITDA came in negative at $5.56 million versus a $2.1 million loss in the third quarter of 2020.

Q3 2021 Business Highlights

Signed second Agrify Total Turn-Key Solution with True House Cannabis LLC to install up to 214 of Agrify's Vertical Farming Units. The partnership is expected to generate an estimated $73 million in revenue in the next 10 years.
Established multi-year vertical farming research and development partnership with Curaleaf Holdings CURLF to study the impact of cultivation environment on plant health and harvest yields.
Expanded and amplified partnership with existing customer, WhiteCloud Botanicals.
Obtained a license from the state of Massachusetts for the cultivation and production of industrial hemp.
Opened new cultivation and production R&D facility, product showcase and corporate office in Billerica, Massachusetts.

2021 Outlook

The company expects fourth-quarter bookings to exceed $100 million and revenue of roughly $26 million to $28 million, bringing full-year guidance to $60 million to $62 million, up from the previous guidance of $48 million to $50 million.

Agrify anticipates that EBITDA margins will improve significantly as it continues to see positive synergies and contributions from their newly acquired extraction division.

"As we forge ahead, we are in advanced discussions with over 20 MSOs, we are actively engaging with more than 15 potential TTK and VFU cash customers, and we continue to explore other strategic acquisition opportunities," Chang explained, adding that the company will provide its 2022 outlook in the coming months.

Management Shake-Ups

Separately, Agrify announced that Thomas Massie has become its new president and chief operating officer and that Timothy Oakes agreed to transition to the chief financial officer role.

Massie is a member of the company's board of directors as well. He has extensive experience leading growth-oriented organizations. Robert Harrison, who formerly served as Agrify's COO has become the senior vice president of manufacturing operations.

Oakes, a finance executive with over three decades of experience, has served as a key member of Agrify's board of directors, as well as its audit committee chair.

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