Tilt Holdings Inc. (Cboe: TILT) (OTCQX: TLLTF) reported a solid rise in revenue for the third quarter ending Sept. 30, as the company’s continues to try to turn its luck around.
Tilt’s revenue climbed by 10% to $44.6 million, up from $40.5 million in the same period last year. The figure beat Seeking Alpha’s average analyst estimates by $1.75 million. The uptick was primarily fueled by a surge in sales volume of Jupiter, the company’s vape line, attracting both legacy and new customers. However, that growth was partially tempered by price adjustments in key markets like Massachusetts.
Despite the revenue increase, gross profits dipped to $8 million from $9.5 million year-over-year, with gross margins falling to 17.9% from 23.6%. The decline reflects the impact of price normalization in Massachusetts and Pennsylvania, which are some of the company’s biggest markets.
Tilt posted an improvement in net losses, down to $8.7 million from the previous year’s $15.7 million. The improvement is attributed to a combination of tax benefits from net operating loss carryforwards and cuts in operating expenses.
The company’s adjusted EBITDA rose to $2.2 million from $600,000, driven by “continued progress with the company’s strategic refinement and optimization initiatives.”
On the liquidity front, Tilt ended the quarter with $2.8 million in cash and equivalents, down slightly from $3.5 million at the end of 2022. The company also managed to reduce its debt load, with notes payable net of discount dropping to $53.5 million from $59.7 million.
Operational highlights for the quarter included the company selling its interests in Standard Farms New York, receiving an advanced payment of $2.9 million from the IRS for employee retention credits, and forming a new brand partnership with Edie Parker.
“We are leveraging the flywheel effects between our vape hardware and plant-touching businesses to drive higher sales by helping inhalation-focused brand partners expand their market footprint through Tilt’s plant-touching operations while purchasing hardware from Jupiter,” CEO Tim Conder said in a statement.
Conder anticipates 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 pickup in the first quarter of 2024.