Leafly Holdings, Inc. reported a decline in revenue and profitability for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, total revenue was $8.4 million, a decrease of 21% from $10.6 million in the prior year. For the nine months ended September 30, 2024, revenue totaled $26.1 million, down 20% from $32.5 million in 2023. The decline was attributed to reduced revenue from both retail and brand segments, with retail revenue falling to $7.4 million (down 20%) for the quarter and $22.6 million (down 18%) for the nine months.

Despite the revenue drop, Leafly managed to reduce its net loss significantly. The net loss for the three months ended September 30, 2024, was $1.1 million, compared to a loss of $2.2 million in the same period in 2023. For the nine months, the net loss was $4.8 million, down from $9.0 million in the previous year. This improvement in net loss was primarily due to cost-saving measures implemented in 2023, including workforce reductions and lower operating expenses, which decreased by 27% to $26.2 million for the nine months.

Operating expenses for the third quarter were $8.0 million, down from $10.9 million in 2023. The company reported a gross profit of $7.4 million for the third quarter, down from $9.4 million in the prior year, reflecting a gross margin decline. However, gross margins for retail and brands improved slightly, indicating better cost management.

As of September 30, 2024, Leafly's total assets were $19.7 million, down from $21.8 million at the end of 2023, while total current assets also decreased to $16.8 million. The company reported a stockholders' deficit of $14.5 million, an increase from $12.5 million at the end of 2023. Cash and cash equivalents stood at $13.8 million, down from $15.5 million at the end of the previous year.

Strategically, Leafly has engaged in restructuring efforts, including a reduction in its workforce from 131 to 119 employees, and has implemented new sales initiatives to enhance revenue generation. The company also entered into an At-The-Market (ATM) offering, raising $908,000 from the sale of 470,000 shares. However, substantial doubt exists regarding its ability to continue as a going concern, particularly with $29.4 million in convertible notes maturing in January 2025 and insufficient liquidity to repay them.

Additionally, Leafly has faced compliance issues with Nasdaq regarding its listing standards, leading to a scheduled hearing in December 2024 to address potential delisting.