Auxly Cannabis Group Inc., a leading company in the cannabis products market, reported its financial results for the third quarter of 2024, showcasing significant growth and achievement of new financial milestones. Auxly's Q3 2024 results mark another record-breaking quarter with strong performances across revenue, gross margin, and adjusted EBITDA. The company recorded net revenues of $33.3 million, an 18% increase year-over-year and a 14% increase quarter-over-quarter. This success was further highlighted by a record gross margin of 47% on finished cannabis inventory sold, improving 17% from the previous year.

Auxly achieved a fifth consecutive quarter of positive adjusted EBITDA, reaching a new high of $8.3 million. This represents a remarkable 60% increase over the previous quarter and an extraordinary 6,982% rise from the same period in 2023. Additionally, the company reported a net income of $3.2 million and a cash flow of $12.9 million generated from operating activities. Auxly made strides in reducing its debt by 54% compared to the end of 2023, reaffirming its commitment to financial health.

The company also advanced its market position, rising to the #4 spot among licensed producers in national recreational sales. Auxly solidified its leadership in the vape category, capturing 36% of the national market share. The Back Forty Liquid Imagination 28g SKU emerged as the top-selling flower product nationwide, reflecting strong consumer preference. The pre-roll segment grew by 19% compared to the previous quarter, with key products like Back Forty’s Wedding Pie and Banana OG ranking third and fourth in non-infused pre-roll sales.

CEO Hugo Alves praised the company's focused strategy on efficient revenue growth and profitability, underscoring the year-over-year net revenue growth of 18% and record adjusted EBITDA figures. By prioritizing top-selling product categories and optimizing distribution, Auxly strengthened its position in the market, particularly with its Back Forty brand becoming a leader in Ontario.

Auxly’s results for the nine months ending September 30, 2024, showed net revenues amounting to $87.7 million, marking an 18% increase from $74.2 million in the same period in 2023. The product sales breakdown was primarily 59% from dried flower and pre-rolls with the remainder from oils and 2.0 products. Most sales were concentrated in major markets such as British Columbia, Alberta, and Ontario, which accounted for over 76% of cannabis sales.

Financial performance improvements were evident with a gross profit of $17.1 million for Q3 2024 and a gross profit margin of 52%, an increase from 16% in the prior year. The enhancement in gross margin was largely due to streamlined production processes and increased product demand. SG&A expenses were reduced by 16% year-over-year, reflecting strategic overhead management. Auxly's strategic focus paid off, with operational improvements leading to lower SG&A and a marked increase in adjusted EBITDA and margins.

Looking ahead, Auxly remains committed to continued growth and profitability through strategic product focus, especially in the core categories of vapes, pre-rolls, and dried flower. The company's competitive strengths in production capabilities and market share are pivotal in enhancing sales. Auxly's financial strategies, including debt reduction and strengthening the balance sheet, aim to further solidify the company's position and financial resilience.

Auxly plans to capitalize on its competitive advantages to boost sales in the Canadian market and seek expansion in wholesale cannabis sales. The company remains focused on delivering high-quality cannabis products while maintaining operational efficiency. Its dedicated approach aims to set industry standards for growth and profitability, supporting Auxly’s mission to lead the cannabis market with innovative, trusted products.