Akerna (NASDAQ:KERN), a leading software company in the cannabis space reported its unaudited financial results on Monday for the third quarter, which ended September 30, 2022.
“We continue to focus our resources on building a stable and sustainable financial model at Akerna, and we are well-positioned for future growth,” said Jessica Billingsley, CEO of Akerna.
“This is evident in our double-digit growth in reported software sales for the quarter, the implementation of aggressive cost control measures we implemented throughout the year which are tracking through the P&L, and the narrowing of our Adjusted EBITDA losses,” Billingsley continued.
“We believe that our current business units, which are supported by and consist of 75% recurring annual revenue, provide us the means to reach a point of sustained profitability at our current sales growth rate,” Billingsley concluded.
Third Quarter 2022 Key Metrics
- CARR of $16.9 million, up 3% year-over-year.
- Q3 software bookings of approximately $440K.
- Transaction volume was up 10% sequentially.
- Average new business deal size decreased by 16% year-over-year.
- The transaction dollar amount was down 10% sequentially
Third Quarter 2022 Financial Highlights
- Software revenue was $5.3 million, up 17% year-over-year.
- Total revenue was $5.4 million, up 5% year-over-year.
- Gross profit of $3.4 million, or 62% of total revenues, was essentially flat with $3.2 million, or 62% of total revenues in the same period of 2021.
- Loss from operations was $0.8 million which included a $3.0 million benefit, attributable to an acquisition earn-out adjustment, compared to a loss of $3.7 million in last year’s same period.
- Net loss was $2.3 million compared to a loss of $1.5 million in last year’s third quarter.
- Adjusted EBITDA loss was $1.4 million compared with a loss of $1.5 million for the same quarter of 2021, and compared to an Adjusted EBITDA loss of $2.1 million in the second quarter of 2022.
- Cash and restricted cash was $9.5 million as of September 30, 2022
Business Highlights
The company continues to explore strategic and financial alternatives to strengthen its balance sheet. In addition, Akerna closed an equity transaction providing net proceeds of $9.2 million on July 5, 2022, and announced that shareholders voted in favor of a 20-for-1 reverse stock split which was effectuated immediately thereafter in order to maintain compliance with Nasdaq listing standards.
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