Avant Brands (AVNT) Q3 2024 earnings summary

Executive summary

• Achieved record gross revenue of $9.6 million and net revenue of $8.5 million in Q3 2024, up 27% and 30% year-over-year, respectively, driven by international demand.

• Export wholesale revenue reached a record $5.1 million, a 116% increase over Q3 2023, now representing 60% of net revenue.

• Cannabis production and sales hit new highs, with 3,441 kg produced (+5%) and 3,087 kg sold (+98%) compared to Q3 2023.

• Strategic focus shifted toward international expansion, with new agreements and shipments to Australia, Germany, Israel, and Portugal.

Financial highlights

• Gross profit decreased to $1.0 million from $5.0 million in Q3 2023, mainly due to biological asset valuation impacts.

• Adjusted EBITDA was $2.1 million, marking the third consecutive quarter above $2 million.

• Adjusted net income reached $0.5 million, also the third consecutive positive quarter.

• Cash balance increased by $2.4 million year-to-date, with $1.7 million net cash from operating activities.

• Gross margin adjusted for fair value adjustments rose to $4.2 million (+106%), with margin percentage up to 49% from 31%.

Outlook and guidance

• Management expects continued international sales growth, with nine international agreements executed and shipments to four clients, plus three pending.

• Focus remains on expanding the global footprint, especially in markets with a combined population over 250 million.

• Ongoing product development and cost control initiatives are expected to support profitability.