Canadian Cannabis Co. Decibel Reports 12% YoY Drop In Q3 Revenue But Increases Gross Margin To 53%

Author: Jelena Martinovic | November 22, 2024 09:54am

Decibel Cannabis Company Inc. (TSXV:DB) (OTCQB:DBCCF) announced its unaudited interim financial results on Thursday for the third quarter ending Sept. 30, 2024.

“Decibel has been very deliberate about reducing our current liabilities, by ~5mm this quarter," CEO Benjamin Sze said. "Maintaining discipline over time will result in a stronger balance sheet.  This marks the last quarter where our primary focus is on Canadian domestic recreational sales. While we continue to integrate AgMedica into our portfolio, it is encouraging to see significant demand internationally for Decibel flower.”

Read Also: Decibel Cannabis Reports 22% YoY Decrease In Q2 Net Revenue, Plans To Benefit With New Product Launches

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Q3 Financial Highlights

• Net revenue totaled CA$24.1 million ($17.2 million), representing a 9% increase sequentially, but a 12% decrease year-over-year.
• Gross profit before fair value adjustments was CA$12.7 million, compared to roughly CA$12 million in the prior year's period.
• Gross margin before fair value adjustments reached 53% in the third quarter, up from 44% in the prior year's period, reflecting improved operational efficiency.
• Adjusted EBITDA was positive at CA$5.1 million, representing a 31% increase from the previous quarter but a 21% decrease year over year.
• Net loss and comprehensive loss amounted to CA$585 000, compared to a net income and comprehensive income of CA$413 000.
• Generated positive free cash flow of $1.8 million, up 75% year-over-year.

The company said that it's seeing significant demand for its flower internationally as it continues to integrate AgMedica.

Decibel closed the acquisition of AgMedica Bioscience Ltd. in October. The transaction was arranged through an agreement with Callisto Capital Corp. and was made in exchange for a $6.3 million unsecured convertible debenture.

Read Next:

• Decibel’s $10M Strategy: How It Could Enhance Your Canadian Cannabis Portfolio

DBCCF Price Action

Decibel's shares traded 5.54% higher at $0.0495 per share after the market close on Thursday afternoon.

Posted In: DB DBCCF TSXV:DB