Agrify Corporation (NASDAQ:AGFY), reported Wednesday financial results for the third quarter ended September 30, 2022, with revenue of $7.0 million, down by 55.4% compared to $15.9 million in the same period of 2021.
“While the operating environment within the cannabis industry continues to pose significant challenges for us, we remain determined to pursue and execute on a number of important and practical initiatives,” stated Raymond Chang, chairman and chief executive officer of Agrify. “Unfortunately, our third quarter financial performance was not what we anticipated. We entered the quarter with line of sight on more than $15.0 million in revenue, however, we had to make some difficult business decisions, which resulted in quarterly revenue of only $7.0 million.”
The earnings report came on the heels of the company diluting its stock by nearly 70% to avoid a hostile takeover.
Third Quarter Financial Highlights
- Third quarter 2022 revenue reflects the deferral of $5.3 million of design and build revenue in connection with the Bud and Mary’s lawsuit.
- Gross loss amounted to $4.1 million, compared to a loss of $380, 000 in the third quarter of 2021.
- Net loss was $46.3 million, or $17.33 per diluted share, compared to a net loss of $9.8 million, or $4.68 per diluted share, in the prior year period.
- Adjusted EBITDA was a loss of $28.8 million, versus an Adjusted EBITDA loss of $5.6 million in the prior year period.
Recent Business Highlights
- In November, Agrify announced the successful commercialization of the PX10 hydrocarbon cannabis extractor that was originally unveiled in August.
- In October, the company confirmed that Prairie State Cannabis LLC in Illinois, LowKey LLC in Massachusetts, and MediFlora Cultivation LTD in South Africa all signed agreements to operate their respective cultivation businesses using Agrify’s Rapid Deployment Packs.
- In September, Agrify announced it received the Best Cultivation Technology Award during the Green Market Report’s Tech Summit.
Equity Financing Update
The company ended the third quarter of 2022 with a combined amount of cash, restricted cash, and marketable securities of $12.5 million. After the end of the third quarter of 2022, the company began issuing shares of its common stock under a previously announced at-the-market equity program and as of November 7, 2022, the company had generated aggregate gross proceeds through the ATM Program of $15.6 million and net proceeds, after deducting commissions, of $15.1 million.
2022 Outlook
Agrify is updating its revenue guidance for the fiscal year 2022 due to the pending lawsuit from Bud & Mary’s, which has resulted in an unanticipated deferral of approximately $5.3 million in third-quarter revenue and will also impact fourth-quarter revenue. Agrify now expects to generate between $65.0 million and $70.0 million in total revenue for the fiscal year 2022 instead of the previous guidance range of $70.0 million to $75.0 million.
“Despite the obstacles we have encountered in recent months, we believe brighter days are ahead, and we are already seeing a positive shift in momentum in the fourth quarter, which should bode well for renewed growth for the remainder of the year and beyond,” Chang added.
Price action
Agrify shares were trading 6.38% lower at $1.32 per share, during Wednesday's pre-market session.
Photo: Courtesy of Esteban Lopez on Unsplash
