CEA Industries Reports 59% Revenue Decline and $3.1 Million Net Loss for Fiscal Year 2024

CEA Industries Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with revenues dropping to approximately $2.8 million, a decrease of 59% from $6.9 million in 2023. The company also recorded a net loss of $3.1 million, compared to a net loss of $2.9 million in the previous year, marking an increase in losses of $234,000. The adjusted net loss, which accounts for non-cash expenses, rose to $3.05 million from $2.7 million, reflecting a 13% increase. The decline in revenue was attributed to reduced capital expenditures in the cannabis market, ongoing inflationary pressures, and a decrease in net bookings, which fell from $6.04 million in 2022 to $1.54 million in 2023.

In terms of operational developments, CEA Industries experienced a slight increase in backlog, which rose to $490,000 at the end of 2024, up from $435,000 in 2023. This increase was primarily driven by a large equipment contract worth approximately $1.3 million booked in the second quarter of 2024. However, the company noted that the completion of customer projects is heavily dependent on clients securing funding and obtaining necessary licenses, which can lead to delays in revenue recognition. The company’s customer base remains concentrated, with two customers accounting for 45% and 10% of total revenue for 2024.

Strategically, CEA Industries is in the process of acquiring Fat Panda, a major player in the e-cigarette and vape market in Canada, for CAD 18 million (approximately USD 12.6 million). This acquisition is expected to enhance the company's market presence and diversify its revenue streams. The deal is anticipated to close in the first half of fiscal year 2025, subject to various conditions including financing and regulatory approvals. The acquisition aligns with the company's strategy to expand its product offerings and customer base beyond the cannabis sector.

Despite the challenges faced in the cannabis market, CEA Industries is taking steps to reduce operating costs and adapt to the current economic environment. The company reported cash and cash equivalents of $9.45 million as of December 31, 2024, down from $12.51 million in 2023, indicating a need for careful cash management moving forward. The company has not paid dividends and does not anticipate doing so in the foreseeable future, focusing instead on reinvesting in operations and potential growth opportunities.

Looking ahead, CEA Industries acknowledges the uncertainties in the cannabis market and the broader economic landscape, which may impact future revenue and operational performance. The company is committed to monitoring market conditions and adjusting its strategies accordingly, while also addressing internal control weaknesses identified in its financial reporting processes. The management remains focused on improving operational efficiency and exploring new business opportunities to drive growth in the coming years.