Urban-Gro (UGRO) Q4 2024 earnings summary

Executive summary

• Revenue for 2024 was $40.0 million, down 43% from $69.9 million in 2023, driven by declines in construction design-build and services due to negative market conditions in the CEA sector.

• Net loss for 2024 was $36.5 million, compared to a net loss of $25.4 million in 2023, with gross profit margin falling to 7% from 14% year-over-year.

• The company began winding down operations in 2025, selling assets, reducing workforce, and preparing for a merger with Flash Sports & Media, Inc.

• As of December 31, 2024, only a single division remains, focused on value-added reselling of equipment systems to the CEA sector.

Financial highlights

• Gross profit for 2024 was $2.9 million, down from $9.9 million in 2023.

• Operating expenses increased to $38.4 million in 2024, up 16% from $33.2 million in 2023, mainly due to a $5.0 million increase in impairment of goodwill and intangibles.

• Cash at year-end 2024 was $0.8 million, with negative working capital of $26.5 million.

• Net cash used in operating activities was $2.8 million in 2024, compared to $10.5 million in 2023.

• Goodwill impairment charge of $8.6 million and intangible asset impairment of $2.7 million recorded in 2024.

Outlook and guidance

• The company faces substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows.

• Management is focused on reducing expenses and may seek additional capital through equity or debt financing.

• The company is in the process of merging with Flash Sports & Media, Inc., which would result in a significant change in ownership and business direction.