Urban-Gro, the design-build provider to the cannabis industry, shocked investors with its financial results. Its stock price plummeted by 23.42% in just 24 hours to $1.4 after reporting its full-year and Q4 2024 performance.
The report revealed a net loss of $18.7 million, a substantial 18.2% increase from the $15.3 million loss in 2023. Adjusted EBITDA took a hit, sliding to negative $9.7 million from $3.9 million in 2023. Despite a revenue year-over-year growth of $59.9 million, escalating from $7.1 million to $67 million, investors were left unimpressed.
Urban-Gro blamed market shifts and a significant backlog of $110 million for the financial hurdles it faces.
Urban-Gro’s 2023 Financial Highlights
Revenue leaped to $71.5 million, up by $4.5 million compared to 2023 figures.
Net Loss surged to $18.7 million.
Adjusted EBITDA plummeted from negative $3.9 million to negative $9.7 million.
Q4 2023 Financial Highlights
Revenue shrunk year-over-year, dropping from $15.0 million in 2024 to $17.3 million in 2023.
Gross profit dwindled to $1.7 million, registering a decline from the previous year.
Net loss stood at $4.7 million, equivalent to $(0.40) per share.
Adjusted EBITDA sharply fell to negative $3.0 million compared to negative $1.7 million in 2023.
Management Relays Confidence Amidst Turbulence
In response, Chairman and CEO Bradley Nattrass described 2023 as a “transitional year” where the company implemented a diversification strategy in response to market shifts. While revenue saw an uptick of $26.4 million from construction projects, this rise was offset by a drastic $20.7 million slump in equipment systems revenue.
Nattrass criticized state-level regulatory delays in license allocation and the national legislative gridlock affecting industry progress.
He expressed optimism, saying, “We anticipate a robust year of organic growth based on revised project schedules and streamlined operations, translating into enhanced margins and productivity.”
Management remains optimistic about future profitability, citing delayed projects now earmarked for fiscal year 2024, projecting a revenue leap of over $84.0 million in 2024, marking a 17.4% growth and a positive Adjusted EBITDA for the year.