Weed Discovery Marketplace Leafly Q2 Revenue Drops 18% YoY, Customer Accounts Lower As Average Spend Grows

Leafly Holdings, Inc.LFLY reported its financial results Thursday for the second quarter ended June 30, 2024, disclosing revenue of $8.7 million, compared to $10.7 million in the same quarter of 2023.

"We remain focused on enhancing operational efficiency and stabilizing our core business while delivering value to our partners," stated Yoko Miyashita, CEO of Leafly. "We are living in an era of liberalized access to cannabis and we believe the demand for Leafly's trusted voice and guidance has never been greater. We remain invigorated by the opportunities to connect retailers and brands with high-intent consumers."

The earnings report follows the company’s recent partnership upgrade with Uber Eats, a subsidiary of Uber Technologies UBER, to bring cannabis home delivery to Alberta, Canada.

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Second Quarter Summary

• Net loss was $1.3 million, compared to net loss of $1.4 million for Q2 2023.
• Gross margin was 89%, a slight improvement over Q2 2023 gross margin of 88%.
• Adjusted EBITDA was a gain of $483,000 compared to $80,000 in Q2 2023.
• Retail revenue was $7.3 million, compared to $8.8 million in Q2 2023.
• Brand revenue was $1.4 million, compared to $1.8 million in Q2 2023.
• Total operating expense was $8.4 million, a 17% reduction from $10.2 million in Q2 2023.
• Ended the quarter with $13.6 million in cash, excluding restricted cash, a decrease of $500,000 compared to $14.1 million at the end of Q1 2024.

During the quarter the number of retail accounts dropped 32% year-over-year to 3,595 accounts. However, the average retail account spending grew to $684 from $558 in the same period last year.

Q3 Guidance

Based on current business trends and conditions, Leafly expects third-quarter revenue of around $8.4 million and an adjusted EBITDA loss of less than $1.0 million.

"Leafly continues to focus on operating efficiently and managing the business towards profitability," CFO Suresh Krishnaswamy said in a statement. "We have a number of projects and initiatives underway to stabilize revenues. We are seeing green shoots associated with these efforts and will have more confidence as we see the results of these initiatives over the next few quarters."

Price Action

Leafly shares closed Thursday's market session 4.85% higher at $2.16 per share.

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