Multi-state cannabis operator AYR Wellness Inc. (OTCQX:AYRWF) reported financial results Wednesday for the third quarter ended Sept. 30, 2024, showing revenue of $114.4 million, compared to $114.3 million in the same period of 2023.

"Our third quarter performance reflected ongoing macroeconomic pressure to the consumer wallet and increased competition in select markets, which affected revenue and offset the growth from the launch of adult-use sales in Ohio," stated Steven M. Cohen, interim CEO of AYR. "However, our team adapted to drive gross margin expansion and operating efficiencies, improving our Adjusted EBITDA despite the lower revenue."

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Q3 Financial Highlights

• Gross profit was $48.1 million, compared to gross profit of $43 million in the third quarter of 2023.
• Net loss from continuing operations was $50.51 million, compared to $19.27 million in the same period last year.
• Adjusted EBITDA was a gain of $28.4 million, compared to $25.7 million in the third quarter of 2023.
• Adjusted EBITDA margin was 24.9%, compared to 21.9% in the same period of the prior year.
• Total operating expenses reached $60.46 million, compared to $49.56 million in the corresponding quarter of last year.

AYR deployed $6.1 million of capital expenditures in Q3 and remains on target with the company's guidance of approximately $20 million for the full year. It ended Q3 with aggregate cash, cash equivalents and a restricted cash balance of $51 million. This compares to $50.77 million at the end of Dec. 2023.

“Notwithstanding the ongoing leadership transition, we remain focused on strengthening execution and are committed to positioning AYR for sustained growth and profitability,” Cohen added. “Particularly, in 2025, we plan to expand our presence in Ohio, develop an initial footprint in Virginia, and improve our vertical operations in Florida. Although we are disappointed by the result of the Amendment 3 referendum last week in Florida, we continue to maintain strong share in the state's medical market and see potential for revenue growth as our new indoor cultivation facility comes online next year, which will fill a crucial gap by supplying high-quality indoor flower to our stores. We are well-positioned to navigate the near-term environment as we focus on improving execution in our key markets."

Outlook

For the fourth quarter, the company expects revenue and Adjusted EBITDA to be essentially flat compared to the third quarter of 2024. AYR also continues to expect positive GAAP cash flow from operations for calendar 2024.

Price Action

AYR Wellness shares closed Tuesday's market session 19.44% higher at 86 cents a share.

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