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Michigan-based Agrify Corporation (Nasdaq: AGFY) posted a dramatic decline in revenue for both the fourth quarter and full fiscal year ending Dec. 31, 2023, despite seeing its first positive quarterly net income of $572,000 in the fourth quarter.

The company’s revenue for fiscal year 2023 plummeted to $16.9 million, a 71% decrease from the $58.3 million reported in the previous fiscal year. Similarly, fourth-quarter revenue fell to $2.8 million, a 52.5% drop compared to the $5.9 million reported in the same quarter of 2022.

Despite the steep decline in revenue, Agrify managed to improve its gross profit, posting $5.3 million for the fiscal year 2023, compared to a gross loss of $31.8 million in the previous year. The company’s fourth-quarter gross profit also improved, reaching $2.7 million, a significant turnaround from the $33.5 million gross loss reported in the fourth quarter of 2022.

“We continued to see improvements and make progress on our turn-around,” CEO and chairman Raymond Chang said in a statement. “Despite continuous industry headwind, we are starting to see a pick-up in capital expenditures, especially in newly licensed states.

Agrify attributed its positive net income in the fourth quarter to various cost-cutting measures, including reducing headcount, consolidating offices and warehouses, and selling slow-moving inventory. The company also implemented a new policy requiring significant upfront deposits on new sales orders, which helped reduce receivables and improve cash collection.

Chang added, “Although such a drastic change in our policy resulted in lower top-line growth, it significantly reduced our receivables and improved our cash collection. General and administration expenses were reduced from $73 million in 2022 to $19 million in 2023, with a further reduction to less than $3 million per quarter in the fourth quarter of 2023 to align with our current business scale.”

Operating expenses for fiscal year 2023 decreased by 85% to $24.3 million, down from $161.5 million in the previous year. As a result, Agrify’s net loss for fiscal year 2023 narrowed to $18.7 million, a marked improvement from the net loss of $188.2 million in fiscal year 2022.

Despite the challenges, Agrify remains optimistic about its future prospects, citing growing interest in its Vertical Farming Units (VFUs) and end-to-end extraction solutions.

Management believes that its focus on providing tech-enabled, data-driven solutions to the cannabis industry will position it for future growth.

The post Agrify confident in recovery despite major revenue decline in 2023 appeared first on Green Market Report.

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Adam Jackson, KahliBuds, 420GrowLife