Decibel Cannabis Company Inc. Q1 2024 Earnings Report
The TDR Three Key Takeaways regarding Decibel Cannabis Company Inc. Q1 2024 Earnings Report:
- Decibel reports Q1 2024 net revenue of $21.0 million, a 16% decrease from Q1 2023.
- Adjusted EBITDA of $3.6 million, a 45% decline from Q1 2023.
- Gross margin before fair value adjustments was 48%, down from 51% in Q1 2023.
Decibel Cannabis Company Inc. (OTCQB: DBCCF, DB), a Calgary, Canada-based company operating in the cannabis extract products, announced its unaudited interim financial results for the first quarter of 2024. The company reported net revenue of $21.0 million, marking a 16% decrease from $24.9 million in Q1 2023. Gross margin before fair value adjustments was 48%, compared to 51% in the same period last year.
Decibel is committed to innovation and quality, with brands like General Admission, Qwest, and Vox in its portfolio. The company operates facilities in Calgary, Alberta, Creston, British Columbia, and Battleford, Saskatchewan, positioning itself for growth and market expansion.
Adjusted EBITDA showed a decline to $3.6 million from $6.6 million in Q1 2023, primarily driven by a decrease in net Canadian recreational and international sales. The net loss and comprehensive loss for Q1 2024 was $3.3 million, compared to a net loss of $0.6 million in Q1 2023. Adjusted net loss was $3.5 million, impacted by a $3.3 million impairment on Prairie Records’ assets held for sale, subsequently sold on April 10, 2024.
Despite the revenue drop, Decibel maintained a national market share of 6.0%, positioning it as the 4th largest licensed producer in Canada. CEO Benjamin Sze commented, “Despite the drop in revenue, we remain one of Canada’s top brands by market share. With a focused effort on our strategy, we expect an improved Q2 and more importantly a continued path to sustainable growth and profitability.”
Operating cash flow was positive at $905 thousand, though free cash flow decreased to $375 thousand from $1.7 million in Q1 2023. The company ended the quarter with $2.6 million in cash, down from $3.9 million at the end of Q1 2023.
Benjamin Sze, CEO, acknowledged the competitive market and changes in consumer preferences affecting the infused pre-roll segment and vape market. “I am currently undergoing a comprehensive business review and look forward to sharing the initiatives undertaken before July 15th,” Sze added.
Decibel has responded to market shifts by launching large format 510 cartridges and disposables, expecting these products to drive revenue growth in Q2 2024. The company is also transitioning to a new distribution partner for exports to Israel, aiming to stabilize and grow international sales.
CFO Janis Risbin stated, “Despite the market challenges, our resilience and adaptability have allowed us to maintain a significant market position. We remain focused on strengthening our financial foundation and investing opportunistically for growth in 2024 and beyond.”Decibel is committed to innovation and quality, with brands like General Admission, Qwest, and Vox leading its portfolio. The company operates facilities in Calgary, Alberta, Creston, British Columbia, and Battleford, Saskatchewan, positioning itself for continued growth and market expansion. Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!
