Avant Brands (AVNT) Q2 2024 earnings summary

Executive summary

• Achieved record gross revenue of $9.4 million in Q2 2024, up 5% year-over-year, driven by strong international demand and operational improvements.

• International sales rose 26% to $3.7 million, now 45% of net revenue, reflecting expansion in Australia, Germany, and Israel.

• Record adjusted net income of $1.4 million, attributed to cost controls and increased sales, marking a significant turnaround from a prior adjusted net loss.

• Cash flow from operations reached a record $4.6 million, up 126% year-over-year, sustaining positive trends through FY2023 and H1 FY2024.

Financial highlights

• Net revenue reached a record $8.3 million, up 4% from Q2 2023.

• Domestic B2B revenue surged 396% to $1 million, while Canadian recreational revenue declined 30% to $3.3 million.

• Gross margin before fair value adjustments increased to 39% (from 34%), with gross margin dollars at $3.0 million, up 14%.

• Adjusted EBITDA was $2.8 million (+174%), with a record margin of 34% of net revenue (vs. 20%).

• Cannabis production rose 59% to 3,186 kg; sales volume up 1% to 2,708 kg.

Outlook and guidance

• International sales surpassed domestic adult-use sales for the first time, highlighting global demand for premium cannabis.

• Management expects continued international expansion, with nine new agreements in 2024 and shipments pending to key markets including Australia, Germany, Israel, Czech Republic, Poland, Portugal, Switzerland, and the UK.

• The expanded network positions Avant for further growth, especially for its flagship BLK MKT™ brand.