Vext Science (VEXT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $9.0 million with Adjusted EBITDA of $2.9 million and a 32% margin, driven by adult-use sales in Ohio and resilient performance in Arizona despite market headwinds.

• Ohio dispensaries saw over 200% sequential growth post-adult-use launch, contributing to a 14.2% increase in total sales compared to Q2 2024, and outperformed state averages.

• Arizona operations outperformed state averages, with sales declining less than 1% versus a 20.5% state average drop, and achieved the first harvest from the Eloy facility in Q1 2024.

• Vertically integrated operations in Arizona and Ohio, focusing on limited license states for sustainable competitive advantage.

• The company is on track to reach the Ohio dispensary license cap of 8, with new dispensaries expected to open in 2025 and early 2026.

Financial highlights

• Q3 2024 revenue was $8,986,909, up from $8,426,928 in Q2 2024 and $8,099,285 in Q3 2023.

• Adjusted EBITDA for Q3 2024 was $2,873,020, with a 32% margin, up from $1,084,234 (12.9%) in Q2 2024 and $1,076,949 (13.3%) in Q3 2023.

• Net income after taxes for Q3 2024 was $(2,496,768).

• Cash flow from operations was negative $0.7 million, with $2.8 million in cash at quarter-end.

• FY 2023 revenue was $34.8M, slightly down from $35.4M in 2022; FY 2023 adjusted EBITDA was $8.4M.

Outlook and guidance

• Expect continued sales growth in Ohio as the adult-use market matures and customer acquisition accelerates.

• Anticipate operating up to eight dispensaries in Ohio by early 2026, pending regulatory approvals.

• Kentucky medical cannabis market entry expected in 2025, with a right of first refusal on a local manufacturing facility.

• Project revenue and cash flow from operations to strengthen into 2025, leveraging vertical integration and optimizing operations.

• Plans to expand cultivation in Arizona to 58,000 sq. ft. and in Ohio up to 50,000 sq. ft. as needed.