Tilt Holdings Inc. Reports Revenue Growth in Q3 Amidst Strategic Refinements

LOS ANGELES- Tilt Holdings Inc. a diversified cannabis industry player, has reported a significant increase in revenue for the third quarter ending September 30, as the company continues to navigate its path to financial stability.

For the third quarter, Tilt’s revenue showed a notable increase of 10%, reaching $44.6 million, compared to $40.5 million in the same period last year. This performance exceeded the average analyst estimates by $1.75 million, according to Seeking Alpha. The rise in revenue is primarily attributed to the increased sales volume of Jupiter, the company’s popular vape line, which has been successful in attracting both legacy and new customers. However, this growth was partially offset by price adjustments in critical markets, including Massachusetts.

Despite the positive trajectory in revenue, Tilt observed a decrease in gross profits, which declined to $8 million from the previous year’s $9.5 million. This downturn in profitability, with gross margins falling to 17.9% from 23.6%, reflects the challenges posed by price normalization in key markets like Massachusetts and Pennsylvania.

In a more positive light, the company’s net losses improved, decreasing to $8.7 million from the prior year’s $15.7 million. This improvement is largely due to a combination of tax benefits arising from net operating loss carryforwards and reductions in operating expenses. Furthermore, the company’s adjusted EBITDA saw a substantial increase to $2.2 million, up from $600,000, signaling progress in the company’s strategic refinement and optimization initiatives.

Tilt ended the quarter with $2.8 million in cash and equivalents, a slight decrease from $3.5 million at the end of 2022. The company also made headway in reducing its debt, with notes payable net of discount decreasing to $53.5 million from $59.7 million.

Key operational highlights for the quarter included the divestiture of its interests in Standard Farms New York, securing an advanced payment of $2.9 million from the IRS for employee retention credits, and establishing a new brand partnership with Edie Parker.

CEO Tim Conder, commenting on the results, expressed satisfaction with the third-quarter performance. He emphasized the dual focus on enhancing the plant-touching and Jupiter vape hardware businesses, which contributed to double-digit revenue growth, a significant reduction in operating expenses, and an increase in adjusted EBITDA. Conder also indicated a temporary delay in Jupiter revenue in the fourth quarter due to the timing of orders around the Chinese New Year, with expectations of a resurgence in the first quarter of 2024.

In summary, Tilt Holdings Inc. displayed resilience and adaptability in Q3 2023, balancing growth and strategic reorganization. The company remains poised to strengthen its financial position, anticipating a robust performance in the upcoming fiscal periods.