TILT Holdings Q3 Revenue Drops 40% YoY Due To Jupiter Hardware Business Challenges

TILT Holdings Inc. TLLTF reported Thursday its financial and operating results for the three months ended Sept. 30, 2024, revealing revenue of $27 million, compared to $44.6 million in the prior year period. The Arizona-based cannabis company attributes the decrease in revenue to its Jupiter hardware business and delays in shipping from a primary supplier as well as the temporary transition of certain customers to a commission structure.

"We are underway with a comprehensive strategic review of our plant-touching business," stated TILT's chief executive officer Tim Conder. "This process allows us to evaluate a range of potential actions, including divestitures, partnerships, and other strategic alternatives, to align our portfolio better and focus on our opportunity in inhalation technology. We believe that these plant-touching assets hold significant potential value for other operators and could provide us with the additional capital needed to strengthen our balance sheet and expand Jupiter Research."

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Q3 2024 Financial Summary

• Gross profit was $3.8 million and gross margin was 14% compared to $8.0 million or 18% of revenue in the prior-year period. The decrease in gross profit was mainly driven by the decreased sales volume, whereas the decrease in gross margin was primarily driven by increased logistics costs related to shipping delays, as well as product mix.
• Net loss was $12.6 million, compared to a net loss of $8.7 million in the prior year period.
• Adjusted EBITDA was a loss of $1.6 million compared to a gain of $2.2 million in the prior year period. The decrease was primarily driven by lower revenue and gross margin.
• Cash provided by operating activities was $2.0 million, compared to $1.0 million for the year-ago period.
• At September 30, 2024, the company had $3.9 million of cash, cash equivalents and restricted cash compared to $3.3 million at December 31, 2023.

Q3 2024 & Recent Operational Highlights

• Launched Edie Parker Flower in Pennsylvania in the third quarter.
• Announced the appointment of Marshall Horowitz to the board of directors following the resignation of Adam Draizin.
• Announced the departure of Chris Kelly, former chief revenue officer.

"During the third quarter, we worked through our new ‘asset-light' model for Jupiter which we introduced in Q2. This model allows for a just-in-time production and shipping structure, which we expect should improve our working capital position,” said Conder. “That said, we believe that by continuing to evolve Jupiter, and with this strategic review process completed, it will allow us to sharpen our focus, better align our resources, and build a robust portfolio of products that meets our customers' evolving pricing and innovation needs."

Price Action

TILT Holdings shares closed Thursday's market session 2.56% higher at $0.0080 per share.

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Photo: Courtesy of C.Aphirak via Shutterstock