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Online cannabis advertising platform Leafly Holdings Inc. (Nasdaq: LFLY) continued suffering downward-trending revenues as it lost hundreds more in clientele during the quarter that ended Sept. 30, the company reported in its latest financials.

Leafly lost $2.2 million in the third quarter, bringing its losses for the year to just over $9 million.

Overall revenues were down to $10.6 million year-over-year from $11.8 million, and were also down slightly but sequentially from the second quarter of the year, when revenues hit $10.7 million.

The company also saw a sharp drop in its overall paying retail clientele with a loss of 795 accounts sequentially, to 4,466 from 5,261 in the second quarter, and down from 5,637 from the same quarter a year prior.

But the company noted that the average paying client’s monthly bill has increased year-over-year, to $644 from $556. It attributed that to “the roll-out of new rate cards and churn of lower ARPA accounts.”

Leafly has not been immune to the “pain points” the wider cannabis industry has been going through this year, CEO Yoko Miyashita said in a press release.

“Our third quarter results reflect our progress toward building a sustainable business in a challenging market,” Miyashita said. “Cannabis markets continue to experience pain points of various types, but the industry continues to evolve. The Leafly platform plays an important role, providing the technology retailers need to drive consumer sales and e-commerce shopping experiences. With a strategic focus on profitability, we are carefully managing expenses which we believe will set us up for growth as the cannabis market matures and recovers.”

The financial hit comes on the heels of several cost-cutting measures Leafly has implemented over the past year, including layoffs and shuttering its marijuana news division. Operating expenses for Q3 this year were down 33% to $10.9 million from $16.3 million a year ago, Leafly reported, and its gross margin improved by 2% in the same timeframe, to 89% from 87%.

“We continue to focus on operating with efficiency and managing costs,” Suresh Krishnaswamy, CFO of Leafly, said in a release. “Our third quarter results are a reflection of the difficult environment our retail and brand customers are facing, driven by lack of access to banking and capital, license delays, and margin compression. We are supporting our customers to provide value aligned with their needs, while also right-sizing their services for maximum impact given their budget constraints.”

Also during the quarter, Leafly implemented even more changes to hopefully get back into the black:

• Regained Nasdaq compliance with the minimum bid price rule in September, ensuring its shares can continue to trade on the exchange.
• Rolled out “new rate cards and price increases in select markets to select clients to better align pricing” with its services.
• Revamped its API for “order integration,” designed to ease online ordering for its retail partners.
• Rolled out “scheduled delivery” for online customers to “drive customer retention and loyalty.”

Leafly also on Thursday issued financial guidance for the remainder of 2023, and said it expects $9.5 million in revenue for the fourth quarter – yet another decrease – and its adjusted EBITDA loss is projected to be “around $1.3 million.”

At the close of the quarter, Leafly had $23 million in total assets, including $14.4 million in cash, and $36.1 million in total liabilities.

The post Leafly Revenues Continue Downward Slide, Loses More Clients appeared first on Green Market Report.

420GrowLife

via www.KahliBuds.com

John Schroyer, KahliBuds, 420GrowLife