Leafly Holdings, Inc. (NASDAQ:LFLY), a leading online cannabis discovery marketplace and resource for cannabis consumers announced its financial results late Thursday for the first quarter ended March 31, 2022.
First Quarter 2022 Financial Results
- Total revenue was $11.4 million in line with Company expectations and up 21% over the first quarter of 2021 driven by growth in new subscriptions and increased monetization from advertising products.
- Revenue from retail accounts in Q1 2022 was $9.2 million, up 17% over Q1 2021, reflecting the increase in retailer subscriptions on the platform as well as increased advertising spend from retailers in its most-competitive markets.
- Revenue from brands in Q1 2022 was $2.2 million, up 35% over Q1 2021, primarily due to Leafly’s new subscription product offerings that drove a 135% year over year increase in the number of brand advertisers on the platform and increased sales of display advertising.
- The gross margin was 87%, compared to 88% in the first quarter (Q1) of 2021.
- Total operating expense was $17.4 million, up 84% over $9.5 million in Q1 2021, and included investments in platform, product development, and sales and marketing to position the business for growth.
- Net loss was $19.4 million and included $10.4 million of losses on derivative liabilities, compared to a net loss of $1.1 million in Q1 2021.
- Adjusted EBITDA loss was $5.4 million, compared to an adjusted EBITDA loss of $0.8 million in Q1 2021.
Average monthly active users (“MAUs”) in Q1 2022 were 7.7 million, compared to 11.0 million average MAUs in Q1 2021, which was elevated due to the effects of the pandemic when shoppers turned to e-commerce solutions instead of in-store shopping.
Comments From Management
“The first quarter was marked by our continued focus on creating an unmatched consumer shopping experience and a marketplace that delivers outstanding value to our retail and brand customers. Year over year, we grew revenue by 21%, increased ending retail accounts by 37%, and grew the number of brand advertisers on our platform by 135%,” said Yoko Miyashita, CEO of Leafly. “We will harness the momentum of this quarter to drive further investment in products and programs that create a meaningful impact for our customers and the industry.”
Suresh Krishnaswamy, CFO of Leafly added: “Our first-quarter results were in line with expectations and set the foundation for accelerated revenue growth we expect to see throughout the year. The industry continues to evolve, bringing long-term opportunities for growth across new and existing markets. We continue to invest in the product, sales, and marketing in order to create and deliver a best-in-class experience for our consumers, retailers, and brands.”
Business Highlights
Leafly ended the quarter with 5,422 retail accounts, a 37% increase over Q1 2021, driven by the continued adoption of Leafly by retailers in existing markets across North America. Retailer average revenue per account (ARPA) was $576, a 16% decline from Q1 2021, as Leafly strategically lowered entry subscription fees to accelerate retailer concentration in certain markets.
This growing base of new retailers provides an opportunity for greater monetization in the future as retailers adopt Leafly’s advertising products and online ordering capabilities.
In addition, Leafly launched a new business dashboard that allows customers instant access to ROI metrics and best-in-class insights that retailers can use to improve their performance on the platform. The company continued to bolster its executive leadership team with the hiring of Deidre Boulware as Leafly’s Chief People Officer.
Financial Outlook
Leafly is reiterating its annual guidance. The company does not provide quarterly guidance. Based on current business trends and conditions, the financial outlook is expected to be as follows: For the full year of 2022, Leafly expects revenue to be in the range of $53.0 million to $58.0 million, representing 29% growth over 2021 at the midpoint.
“We expect Adjusted EBITDA loss to be in the range of $31.0 million - $26.0 million,” stated the company in a press release.
Leafly has not provided a quantitative reconciliation of forecasted GAAP net income (loss) to forecasted total Adjusted EBITDA within this communication because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence.
Image By Ilona Szentivanyi.
