Leafly Holdings Inc. (Nasdaq: LFLY) posted a solid financial turnaround in 2022 and finished December $5.1 million in the black, according to its fourth quarter earnings report.
But the company also revealed it would be cutting another 21% of its staff to save further costs heading into 2023.
The company said in a press release, “The company is announcing a headcount reduction of approximately 40 positions – or 21% of the company’s workforce – through a combination of layoffs and attrition,” as a result of “further aligning its cost structure to better reflect” cannabis market conditions.
Leafly is projecting a one-time cost savings of $700,000 in the first quarter thanks to the layoffs, it reported, with $8 million in annual savings starting in Q2.
“Given the continued pressure on our topline growth, we made the difficult decision to trim our workforce,” CFO Suresh Krishnaswamy said in the release. “This realignment of our business priorities also helps extend our cash runway as we stay focused on improving our path to profitability.”
Leafly laid off 21% of its workforce in October, which is projected to save the company $16 million this year.
The company reported an overall increase in the number of its paying clients for 2022, to 5,806 retail accounts, a 10% increase from 2021. Average account revenue, however, decreased by $70 to $566.
It also reported the loss of a significant chunk of its monthly active users from 2021, with a 20% decline to just 7.9 million for all of 2022 from 10 million users the year before. The drop was 7% in active users just for Q4 last year.
Highlights from last year include:
- Completed a merger with Merida Merger Corp. I.
- Made inroads with the Montana and New Mexico cannabis markets, where Leafly reported driving up average revenue per account by 68% and 55% respectively.
- Online cannabis orders placed through Leafly’s online platform remained about flat from 2021, with 768,477 placed compared to 776,098 the year prior.
- Partnered with Uber Eats in October to let customers in the Toronto metro area order cannabis deliveries through Uber Eats’ app.
“Despite a year filled with challenges broadly for the cannabis industry, and the associated impact on our revenue growth, we grew the number of subscribing retailers and brands using our platform by double digits in 2022 and continued to focus on delivering an outstanding consumer experience while driving more value for clients who use Leafly to reach high-intent shoppers,” CEO Yoko Miyashita said in the release.
Leafly projected between $11 million-$11.3 million in revenue for the first quarter of 2023.