On Tuesday, Canadian cannabis company Canopy Growth reported fiscal third-quarter revenue that surpassed analysts’ expectations. However, the company incurred a loss during the period.
The company’s revenue grew +23% year-over-year to a record-setting $152.5 million in the three months ending Dec. 31, 2020.
Canopy Growth’s fiscal third-quarter net loss came in at -C$829 million (-US$651.1 million), from $720 million in the year-ago quarter.
Adjusted earnings (loss) before interest, taxes, depreciation and amortization for the quarter were -C$68 million vs. - C$97 million a year ago.
Analysts polled by Bloomberg expected revenue of $148.9 million and an adjusted EBITDA loss of -$71.1 million.
Canopy expects to generate positive adjusted EBITDA during the second half of 2022, and 20 per cent adjusted EBITDA margin for the full year 2024. It projects positive operating cash flow for the full year of 2023, and positive free cash flow for the full year of 2024. The forecasts are based on Canopy’s cost savings strategy, and expectations for compound annual net revenue growth of 40 to 50 per cent between 2022 and 2024.
"We are executing against our cost savings program, with several initiatives already completed and more underway to build a leaner and more agile business," chief financial officer Mike Lee said.
There is a broader rally in Canadian cannabis shares, fueled by hopes for a policy shift in the U.S that would remove pot from the country’s list of Schedule 1 drugs.