Decibel Cannabis Company (DB) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 was $24.1M, up 9% sequentially but down 12% year-over-year due to increased competition and changes in international distribution.

• Gross margin before fair value adjustments improved to 53% from 44% in Q3 2023.

• Adjusted EBITDA reached $5.1M, up 31% sequentially but down 21% year-over-year, reflecting lower Canadian and international sales.

• Positive free cash flow of $1.8M, a 75% increase over Q3 2023.

• Adjusted net income was $2.1M, up 294% year-over-year; adjusted EPS was $0.01, up $0.01 year-over-year.

Financial highlights

• Gross Canadian recreational sales for Q3 2024 were $36.6M, down from $46.0M in Q3 2023.

• Net Canadian recreational sales were $23.8M, down from $27.0M year-over-year.

• International sales for Q3 2024 were $309K, down from $500K in Q3 2023.

• Total gross revenue for Q3 2024 was $36.9M; net revenue was $24.1M.

• Net loss and comprehensive loss for Q3 2024 was ($585K), compared to net income of $413K in Q3 2023.

Outlook and guidance

• Management expects to remain in compliance with all financial covenants for the next twelve months.

• The company is shifting focus from Canadian domestic recreational sales to international markets, supported by the integration of AgMedica and its EU-GMP-certified facility.

• Full year 2025 guidance includes expectations for continued global distribution growth.