TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) posted meaningful growth in its third-quarter financial results ending Sept. 30, raising its guidance as revenue beat analysts’ average expectations by $6.6 million.
The company reported an impressive 34.7% increase in net revenue year-over-year, with figures rising to $89.2 million. The growth exceeded the previous quarter’s revenue by 23.7%, marking the company’s eighth consecutive quarter of sequential revenue growth.
Gross profit margins expanded to 53.6%, up from 47% in the third quarter of 2022, reflecting the company’s improved operational efficiencies and cost-saving measures.
Despite the positive revenue and gross margin trends, the company did report a net loss from continuing operations of $8.4 million.
However, this was an improvement over the $12.9 million loss in the second quarter of 2023 and a stark contrast to the $300.6 million loss in the third quarter of the previous year, which included a hefty non-cash impairment charge.
According to Executive Chairman Jason Wild, the company can attribute its latest success to its market expansion strategies, particularly in New Jersey, Maryland, Michigan, and Pennsylvania.
“We now have the right team, high-performing assets, strong operating results and cash flow, and a wide-open map to capitalize on the opportunities that lie ahead,” Wild said in a statement Thursday.
“While the industry continues to be under pressure, we are seeing compelling opportunities to enter additional geographies and believe that now is the time to expand the company’s strategy from ‘deep, not wide’ to ‘deep and wide’, but only on our terms,” he added.
TerrAscend also reported an adjusted EBITDA of $24.2 million, a considerable rise from both the $12.8 million reported in the second quarter of 2023 and the $12.8 million in the same quarter last year. The adjusted EBITDA margin from continuing operations stood at 27.1%, up from 19.3% in the third quarter of 2022.
The company increased its market share in New Jersey, where it now holds the number two position, and celebrated the successful launch of adult-use sales in Maryland. Those achievements have been complemented by what seems to be a disciplined approach to spending and investment, with capital expenditures of just $1.7 million in the third quarter.
TerrAscend has raised its full-year 2023 revenue and adjusted EBITDA outlook to $320 million and $73 million, respectively. The upward revision of its forecast reflects the company’s confidence in its strategic growth plans.