EMERGE Commerce (ECOM) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the third quarter of reporting with a streamlined business focused on truLOCAL and the golf vertical, following the sale of non-core businesses to pay down debt in 2023 and early 2024.

• GMS grew 10% year-over-year to CAD 7.4 million, the highest growth rate of the year, and marked the second consecutive quarter of positive organic revenue growth.

• Revenue increased 5% year-over-year to CAD 4.6 million, with 8% organic growth excluding Carnivore Club.

• Gross profit rose to CAD 1.8 million, with gross margin improving to 39.3% from 38.9% year-over-year.

• Adjusted EBITDA loss improved to CAD 281,000 from CAD 558,000 in the prior year; net loss from continuing operations narrowed to CAD 0.74 million.

Financial highlights

• GMS reached CAD 7.4 million in Q3 2024, up from CAD 6.8 million in Q3 2023; revenue was CAD 4.6 million, up from CAD 4.4 million.

• Gross profit increased to CAD 1.8 million from CAD 1.7 million, with gross margin at 39.3%.

• Adjusted EBITDA loss reduced to CAD 281,000 from CAD 558,000 year-over-year.

• Net loss from continuing operations was CAD 0.74 million, down from CAD 0.78 million.

• Cash on hand at September 30, 2024, was CAD 1.6 million.

Outlook and guidance

• Management expects the CAD 500,000 in annualized cost reductions actioned in Q3 and early Q4 to positively impact Q4 and 2025 profitability.

• The company is focused on driving organic growth, operational efficiencies, and reducing interest expense.

• Q4, the peak holiday season, is expected to be the strongest quarter.

• A directional annual revenue run rate baseline is around CAD 20 million, based on the past three quarters.

• Anticipated interest rate cuts are expected to yield meaningful cash savings.