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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Leafly Holdings Inc | NASDAQ:LFLY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.075 | -3.20% | 2.27 | 2.24 | 2.29 | 2.305 | 2.19 | 2.19 | 16,694 | 16:20:47 |
Delivered Q3 2023 revenue of $10.6 million
Reported Q3 2023 net loss of $2.2 million and adjusted EBITDA1 loss of $0.2 million
Leafly Holdings, Inc. (“Leafly” or “the Company”) (NASDAQ: LFLY), a leading online cannabis discovery marketplace and resource for cannabis consumers, today announced financial results for its third quarter ended September 30, 2023.
“Our third quarter results reflect our progress toward building a sustainable business in a challenging market," said Yoko Miyashita, CEO of Leafly. “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."
Third Quarter Financial Results
1 The non-GAAP financial measures EBITDA and adjusted EBITDA are presented in this release. See the reconciliations of such non-GAAP financial measures to their most comparable GAAP measures in the table included in this release below.
“We continue to focus on operating with efficiency and managing costs," said Suresh Krishnaswamy, CFO of Leafly. "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."
Key Performance Metrics
Three Months Ended September 30,
2023
2022
Change
Change (%)
Ending retail accounts
4,466
5,637
(1,171
)
-21
%
Retailer ARPA
$
644
$
556
$
88
16
%
Third Quarter Business Highlights
Financial Outlook
Today, Leafly is issuing fourth quarter 2023 guidance. Based on current business trends and conditions, the financial outlook is expected to be around $9.5 million in revenue and adjusted EBITDA loss is expected to be around $1.3 million.
Leafly has not provided a quantitative reconciliation of forecasted GAAP net income (loss) to forecasted total adjusted EBITDA within this communication because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to: depreciation and amortization expense from new assets; impairments of assets; changes in the valuation of any derivatives; the valuation of, and changes in, grants of equity-based compensation; and gains or losses on modification or extinguishment of debt. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, many of which are outside of Leafly’s control. For more information regarding the non-GAAP financial measures discussed in this communication, please see “Non-GAAP Financial Measures” below.
Webcast and Conference Call Information
Leafly will host a conference call and webcast to discuss the results today, Thursday, November 9, 2023 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from Leafly’s Investor Relations website at https://investor.leafly.com.
The live call may also be accessed via telephone at (833) 470-1428 toll-free domestically. Please reference conference ID: #065993. An archived version of the webcast will be available from the same website after the call.
About Leafly
Leafly helps millions of people discover cannabis each year. Leafly's powerful tools help shoppers make informed purchasing decisions and empower cannabis businesses to attract and retain loyal customers through advertising and technology services. Learn more at Leafly.com or download the Leafly mobile app through Apple’s App Store or Google Play.
Definitions of Key Performance Metrics
Ending retail accounts Ending retail accounts is the number of paying retailer accounts with Leafly as of the last month of the respective period. Retail accounts can include more than one retailer.
Retailer average revenue per account Retailer ARPA is calculated as monthly retail revenue, on an account basis, divided by the number of retail accounts that were active during that same month. An active account is one that had an active paying subscription with Leafly in the month. Leafly does not provide retailers with an ongoing free subscription offering but may offer a free introductory period with certain subscriptions.
Given that each of ending retail accounts and retailer ARPA are operational measures and that the Company’s methodology for calculating these measures does not meet the definition of a non-GAAP measure, as that term is defined by the U.S. Securities and Exchange Commission (the "SEC"), a quantitative reconciliation for each is not required or provided.
Cautionary Statement Regarding Forward Looking Statements
This document contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the services offered by Leafly and the markets in which Leafly operates, business strategies, performance metrics, industry environment, potential growth opportunities, Leafly’s projected future results and financial outlook, and expected savings from cost-cutting measures. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “forecast,” “opportunity,” “outlook,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions (including the negative versions of such words or expressions).
Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions as of the date of this release and, as a result, are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements.
Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to, Leafly’s inability to raise sufficient capital to execute its business plan; inability to continue to meet the continued listing requirements applicable to companies listed on the Nasdaq Capital Market; the size, demands and growth potential of the markets for Leafly’s products and services and Leafly’s ability to serve those markets; the impact of worldwide economic conditions, including the resulting effect on consumer spending at local cannabis retailers and the level of advertising spending by such retailers; the degree of market acceptance and adoption of Leafly’s products and services; and the other risks and uncertainties described in the “Risk Factors” section of the Annual Report on Form 10-K filed by Leafly with the SEC on March 29, 2023, and in Leafly’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, and in the other documents filed by Leafly from time to time with the SEC.
These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Leafly assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Leafly does not give any assurance that it will achieve its expectations.
LEAFLY HOLDINGS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands, except per share amounts)
September 30, 2023
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
14,469
$
24,594
Accounts receivable, net of allowance for doubtful accounts of $1,400 and $908, respectively
3,409
3,298
Prepaid expenses and other current assets
2,339
1,792
Restricted cash
—
360
Total current assets
20,217
30,044
Property, equipment, and software, net
2,541
2,285
Restricted cash - long-term portion
249
248
Other assets
55
135
Total assets
$
23,062
$
32,712
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable
$
1,609
$
1,625
Accrued expenses and other current liabilities
2,990
6,235
Deferred revenue
2,095
1,958
Total current liabilities
6,694
9,818
Non-current liabilities
Non-current portion of convertible promissory notes, net
29,272
28,863
Private warrants derivative liability
113
182
Escrow shares derivative liability
5
52
Stockholder earn-out rights derivative liability
25
204
Total non-current liabilities
29,415
29,301
Total liabilities
36,109
39,119
Commitments and contingencies
Stockholders' deficit
Preferred stock
—
—
Common stock
—
—
Treasury stock
(31,663
)
(31,663
)
Additional paid-in capital
92,359
89,956
Accumulated deficit
(73,743
)
(64,700
)
Total stockholders' deficit
(13,047
)
(6,407
)
Total liabilities and stockholders' deficit
$
23,062
$
32,712
LEAFLY HOLDINGS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(in thousands, except per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Revenue
$
10,583
$
11,781
$
32,507
$
35,251
Cost of revenue
1,163
1,515
3,747
4,411
Gross profit
9,420
10,266
28,760
30,840
Operating expenses
Sales and marketing
2,563
6,403
10,326
21,529
Product development
2,533
3,406
8,133
10,927
General and administrative
5,799
6,489
17,475
20,730
Total operating expenses
10,895
16,298
35,934
53,186
Loss from operations
(1,475
)
(6,032
)
(7,174
)
(22,346
)
Interest expense, net
(720
)
(705
)
(2,157
)
(2,119
)
Change in fair value of derivatives
14
22,264
295
36,264
Other income (expense), net
(29
)
(73
)
(7
)
(962
)
Net (loss) income
$
(2,210
)
$
15,454
$
(9,043
)
$
10,837
Net (loss) income per share:
Basic
$
(1.10
)
$
8.69
$
(4.58
)
$
6.15
Diluted
$
(1.10
)
$
5.64
$
(4.58
)
$
5.45
Weighted average shares outstanding:
Basic
2,011
1,779
1,974
1,763
Diluted
2,011
2,149
1,974
1,924
LEAFLY HOLDINGS, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(in thousands)
Nine Months Ended September 30,
2023
2022
Cash flows from operating activities
Net (loss) income
$
(9,043
)
$
10,837
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
697
276
Stock-based compensation expense
2,235
3,159
Bad debt expense
2,350
1,023
Loss on disposition of assets
63
—
Noncash amortization of debt discount
409
369
Noncash interest expense associated with convertible debt
—
243
Noncash change in fair value of derivatives
(295
)
(36,264
)
Other
(1
)
15
Changes in operating assets and liabilities:
Accounts receivable
(2,461
)
(675
)
Prepaid expenses and other current assets
(467
)
(2,222
)
Accounts payable
(16
)
173
Accrued expenses and other current liabilities
(3,246
)
(2,141
)
Deferred revenue
137
77
Net cash used in operating activities
(9,638
)
(25,130
)
Cash flows from investing activities
Additions of property, equipment, and software
(1,042
)
(2,194
)
Proceeds from sale of property and equipment
27
—
Net cash used in investing activities
(1,015
)
(2,194
)
Cash flows from financing activities
Proceeds from exercise of stock options
—
158
Proceeds from convertible promissory notes
—
29,374
Proceeds from business combination placed in escrow and restricted
—
39,032
Trust proceeds received from recapitalization at closing
—
582
Issuance of common stock under ESPP
168
—
Repurchase of common stock and settlement of forward purchase agreements
—
(31,303
)
Transaction costs associated with recapitalization
—
(10,761
)
Advances (repayments) of related party payables
1
(17
)
Net cash provided by financing activities
169
27,065
Net decrease in cash, cash equivalents, and restricted cash
(10,484
)
(259
)
Cash, cash equivalents, and restricted cash, beginning of period
25,202
28,695
Cash, cash equivalents, and restricted cash, end of period
$
14,718
$
28,436
LEAFLY HOLDINGS, INC NON-GAAP FINANCIAL MEASURES - UNAUDITED (in thousands)
Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) and Adjusted EBITDA
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net loss before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net (loss) income (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net (loss) income and our other GAAP results.
A reconciliation of net (loss) income to non-GAAP EBITDA and Adjusted EBITDA is as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Net (loss) income
$
(2,210
)
$
15,454
$
(9,043
)
$
10,837
Interest expense, net
720
705
2,157
2,119
Depreciation and amortization expense
276
127
697
276
EBITDA
(1,214
)
16,286
(6,189
)
13,232
Stock-based compensation
997
771
2,235
3,159
Transaction expenses allocated to derivatives
55
—
55
874
Severance
—
—
754
—
Change in fair value of derivatives
(14
)
(22,264
)
(295
)
(36,264
)
Adjusted EBITDA
$
(176
)
$
(5,207
)
$
(3,440
)
$
(18,999
)
Source: Leafly Holdings, Inc.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231109375813/en/
Media Josh deBerge josh.deberge@leafly.com 206-445-9387
Investors Stacie Clements IR@leafly.com
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