Canadian Cannabis Producer Reports YoY Revenue Spike In Q2, Earnings Show Stable Growth As Demand Grows

We're halfway through the earnings season with some of the big players in the cannabis industry run by top executives and entrepreneurs who are slated to appear at Benzinga's fall event in Chicago are already showing their cards.

Next up is a major Canadian player, Decibel Cannabis Company Inc. DB DBCCF with its second quarter and six months financial results reported on Thursday.

"Our strong second quarter sequential net revenue growth, driven by demand for our core products and international exports, continues to exceed our publicly-stated targets." Paul Wilson, CEO of Decibel said. "We continue to highlight the success in our new, unique and innovative product strategy, demonstrated through clear consumer preference to our infused pre-roll strategy."

The Calgary-based company revealed an increase in net revenue to CA$58 million ($42.9 million) in the second quarter of fiscal 2023, from CA$18.5 million it garnered in the same quarter of last year.

Q2 2023 Financial Highlights

• Gross profit before fair value adjustments totaled CA$26.4 million, compared to CA$7.7 million in the corresponding period of the last fiscal year.
• The gross margin before fair value adjustments was 46% compared to 41% in the same period of 2022.
• Adjusted EBITDA came in positive at roughly CA$14 million, compared to a CA$3.2 million adjusted EBITDA gain in the prior year's period.
• Net loss totaled CA$992 000, down from CA$2.1 million net loss in the second quarter of last year.
• Adjusted net income amounted to $CA7.6 million, up from CA$89 000 in the prior year's period.
• Free cash flow totaled CA$ 2.3 million, compared to CA$939 000 in the same quarter of 2022.

1H 2023 Financial Highlights

• Net revenue totaled CA$35.2 million.
• Gross profit before fair value adjustments totaled CA$13.5 million.
• The gross margin before fair value adjustments was 38%.
• Adjusted EBITDA came in positive at roughly CA$$5.7 million
• Net loss totaled CA$6.5 million.
• Adjusted net income amounted to $CA1.6 million.
• Free cash flow totaled CA$2.6 million.

Year-to-Date Highlights

• Net revenue of CA$58 million, an increase of 65% over 2022.
• Adjusted EBITDA of CA$14.1 million, an increase of 147% over 2022.
• Positive free cash flow of CA$2.3 million, a decrease of 14% over 2022, driven by a CA$3.7 million reduction in accounts payable.

Related News

• Decibel Cannabis Achieves Record Revenue Of $20M In Q1, What About Profit?
• Decibel Preliminary Q4 Revenue Grows >38% Sequentially, What About Adjusted EBITDA?

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Courtesy of Tim Foster on Unsplash