Marijuana Operator Tilt Holdings' Revenue Drops YoY, But Manages To Reduce Net Loss

Cannabis company Tilt Holdings Inc. TILT TLLTF reported its financial and operating results Thursday for the three and twelve months ended Dec. 31, 2023, revealing quarterly revenue of $37.5 million, versus $44.3 million in the same period of 2022. The expected decrease in revenue was primarily attributable to the timing of Jupiter order shipments from Smoore, a portion of which was recovered in the first quarter of 2024.

"It has been less than one year since my return to TILT, and we have made foundational progress in that time," stated TILT's chief executive officer, Tim Conder. "Despite the many challenges we faced throughout the year, our team has meaningfully improved operating efficiency, reduced operating expenses, and begun to restructure our debt to strengthen our balance sheet. Further, we have executed a refined brand partnership strategy in our plant-touching business, and now offer a more concentrated portfolio of strong, inhalation-focused brands that better align with our Jupiter hardware platform."

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Q4 2023 Financial Summary

• Gross profit was $3.6 million and gross margin was 9.5%, compared to $8.3 million or 18.8% of revenue in the prior year period.
• Net loss was $22.0 million, compared to a net loss of $73.1 million in the prior year period.
• Adjusted EBITDA was a loss of $1.6 million compared to a loss of $400,000 in the prior year period.

FY 2023 Financial Summary

• Revenue was $166.0 million, compared to $174.2 million in the prior year. The decrease was primarily driven by the aforementioned order shipment timing and lower average price in certain Jupiter product lines.
• Gross profit was $24.4 million or approximately 14.7% of revenue, compared to $38.2 million or 21.9% of revenue in the prior year.
• Net loss was $62.4 million compared to a net loss of $107.5 million in the prior year. The improvement in net loss was primarily driven by a decrease in operating expenses predominantly due to a reduced non-cash impairment loss compared to the prior year, partially offset by the decrease in gross profit.
• Adjusted EBITDA was $2.1 million in the twelve months ended December 31, 2023, compared to $2.8 million in the prior year.
• December 31, 2023, the company had $3.3 million in cash, cash equivalents and restricted cash compared to $3.5 million on December 31, 2022. Notes payable net of discount on December 31, 2023 was $52.2 million compared to $59.7 million on December 31, 2022.

"Our cost savings efforts and right-sizing initiatives have led to approximately $8 million in annualized savings in 2023 as compared to 2022. We now have a more efficient operating structure in place that will enable us to shift our attention from cost savings to revenue growth in 2024,” Conder continued. “We have a great team, and it has been exciting to execute on our plan together in 2023 and see their alignment around our refined vision come into focus for 2024 and beyond."

Price Action

Tilt's shares closed Thursday’s market session 3.66% higher at $0.034 per share.

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