Urban-gro, Inc. (Nasdaq: UGRO) reported its fourth-quarter and full-year financial results, plus the company provided full-year 2022 guidance. Revenue was $19.0 million in the fourth quarter of 2021 versus $9.2 million in the prior-year period, representing an increase of $9.7 million, or 106%. It beat the analyst estimate for revenue of $18.8 million by Yahoo Finance. Urban-gro attributed the increase to a jump in cultivation equipment sales tied to an expansion in client base and incremental services revenue from acquisitions of $2.7 million.
The company reported a net loss of ($0.6) million, or ($0.06) per share, in the fourth quarter of 2021 versus a net loss of ($1.1) million, or a net loss per share of ($0.24), in the prior-year period, representing an increase of $0.5 million, or $0.18 per share. It missed the analyst estimate for a net loss of ($0.04) cents per share. The adjusted EBITDA was $0.5 million in the fourth quarter of 2021, compared to $0.2 million in the prior-year period. The increase in Adjusted EBITDA was driven by growth in revenues and gross profit, including the contribution from the acquisition of 2WR, and partially offset by increased operating expenses which include the Company’s ongoing investment to support its European expansion.
Full Year Results
Revenue was $62.1 million for the 2021 full year compared to $25.8 million in the prior year, representing an increase of $36.3 million, or 140%. this also topped the company’s own guidance for the year. The net loss was ($0.9) million, or $0.09 per share, for the 2021 full year compared to a net loss of ($5.1) million, or ($1.06) per share, in the prior year, representing an increase of $4.2 million, or $0.97 per share. The increase in net income was driven by properly capitalizing the company so management could effectively execute the strategic plan which is built on a high-margin services platform, which smoothly converts to the design, procurement, integration, and commissioning of equipment systems.
“I am thrilled about our strong fourth-quarter results, which capped off a record full-year performance for urban-gro,” said Bradley Nattrass, Chairman, and CEO. “In 2021, we more than doubled the company from a revenue perspective, achieved positive Adjusted EBITDA, built our backlog to record levels, and expanded our integrated service model with the strategic acquisition of the architect firm, 2WR. Building upon that momentum entering 2022, earlier this month we announced the pending acquisition of Emerald Construction, which adds an accretive and highly complementary CEA-experienced construction management services solution to our offering and further optimizes our in-house capabilities to provide complete design-built facilities to our clients. With these additional capabilities, we are in an ideal position to accelerate our momentum in the global CEA industry while simultaneously enhancing shareholder value.”
Urban-Gro gave full year revenue guidance for 2022 of at least $110 million, including urban-gro’s base revenue as well as revenue for partial year contribution from our pending Emerald acquisition. The 2022 full-year Adjusted EBITDA guidance of greater than $5 million, which includes a partial year contribution from the expected Emerald acquisition.
On March 14, 2022, the company announced the acquisition of Emerald Construction Management, Inc. The acquisition further extends urban-gro’s services into early-stage conceptual design and planning, and it creates the industry’s first fully-integrated architecture-led design-build offering targeting the cannabis and food-focused CEA sectors. The company expects the transaction to be accretive to earnings within the first year and drive significant waterfall revenue opportunities for urban-gro’s existing suite of products and services.
Mr. Nattrass added, “I’m very excited to see what lies ahead for urban-gro. Our strong balance sheet and positive cash flow gives us the flexibility to diversify our revenue streams and pursue profitable growth opportunities. Furthermore, our differentiated set of capabilities puts us in an optimal position to generate opportunities across all geographies, crops, and equipment types and cement our footprint in the burgeoning $17 billion global vertical farming market.”