TILT Holdings Reports 39% Revenue Decline and Increased Net Loss in Q3 2024

TILT Holdings Inc. reported a significant decline in financial performance for the third quarter of 2024, with revenues of $26.97 million, down 39% from $44.56 million in the same period last year. The company's net loss for the quarter was $12.65 million, compared to a loss of $8.66 million in Q3 2023. For the nine months ending September 30, 2024, TILT's revenues totaled $91.05 million, a decrease of 29% from $128.42 million in the prior year, while the net loss widened to $58.25 million from $40.43 million.

The decline in revenue was primarily attributed to decreased sales volumes in both the cannabis and accessories segments. The accessories division, which includes the Jupiter Research LLC business, experienced a 48% drop in revenue, largely due to shipping delays from a primary supplier and a shift to a commission structure for certain customers. The cannabis segment also saw a 14% decrease in revenue, driven by lower sales volumes and price compression in the Massachusetts market. Gross profit for the quarter fell to $3.80 million, representing a gross margin of 14%, down from 18% in the previous year.

Operationally, TILT has been focusing on cost reduction strategies, which resulted in a decrease in total operating expenses to $11.27 million from $12.68 million year-over-year. The company reported a significant impairment loss of $15.74 million during the nine months ended September 30, 2024, reflecting challenges in the Massachusetts market, including increased cultivation and pricing pressures. The company’s total liabilities increased to $178.19 million as of September 30, 2024, compared to $168.80 million at the end of 2023, with a notable rise in notes payable.

In terms of strategic developments, TILT has been actively managing its debt obligations, including a recent amendment to its revolving credit facility, which reduced borrowing capacity from $12.5 million to $6 million. The company is also negotiating a waiver and forbearance agreement with noteholders due to non-compliance with certain financial covenants. Looking ahead, TILT plans to focus on increasing revenue through existing and new product sales, reducing operational costs, and securing additional financing to support its operations. However, the company has expressed substantial doubt about its ability to continue as a going concern within the next 12 months, given its ongoing losses and negative working capital of $43.69 million.