AquaBounty Technologies, Inc. (AQB) Bundle
Understanding AquaBounty Technologies, Inc. (AQB) Revenue Streams
Understanding AquaBounty Technologies, Inc.’s Revenue Streams
The primary revenue sources for AquaBounty Technologies, Inc. are derived from the sale of genetically engineered (GE) Atlantic salmon, non-GE Atlantic salmon, salmon eggs, and fry. The company operates primarily in the United States and Canada. Below is a detailed breakdown of the revenue streams.
Revenue Breakdown
| Revenue Source | Q3 2024 Revenue (USD) | Q3 2023 Revenue (USD) | Change (USD) | Change (%) |
|---|---|---|---|---|
| GE Atlantic Salmon | $0 | $632,307 | $(632,307) | (100%) |
| Non-GE Atlantic Salmon | $32,317 | $89,584 | $(57,267) | (64%) |
| Other Revenue | $15,495 | $12,242 | $3,253 | 27% |
| Total Product Revenue | $47,812 | $733,133 | $(685,321) | (93%) |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, total product revenue amounted to $705,262, a 63% decrease from $1,919,409 in the same period of 2023. The significant decline in revenue is primarily attributed to the decrease in sales from GE Atlantic salmon, which saw a reduction from $1,779,045 to $395,157, a 78% decline. Conversely, non-GE Atlantic salmon revenue increased from $124,841 to $292,728 for the same period, marking a 135% increase.
Contribution of Different Business Segments to Overall Revenue
| Revenue Segment | 9M 2024 Revenue (USD) | 9M 2023 Revenue (USD) | Contribution (%) 2024 |
|---|---|---|---|
| GE Atlantic Salmon | $395,157 | $1,779,045 | 56% |
| Non-GE Atlantic Salmon | $292,728 | $124,841 | 41% |
| Other Revenue | $17,634 | $16,793 | 3% |
| Total | $705,262 | $1,919,409 | 100% |
Significant Changes in Revenue Streams
In the first three quarters of 2024, the company experienced a major shift in its revenue structure. The closure of the Indiana farm led to a non-cash impairment charge of $48,733,222, significantly impacting overall revenue from GE Atlantic salmon, which was the primary revenue driver in previous years. The company also reported a 12% increase in the harvest of GE Atlantic salmon, but this did not translate into revenue due to the below-market pricing from the liquidation of the Indiana farm's assets.
Conclusion of Revenue Analysis
The financial health of AquaBounty Technologies, Inc. as of 2024 indicates a challenging revenue landscape, characterized by significant declines in product revenue, particularly from its flagship GE Atlantic salmon, alongside modest growth in non-GE salmon sales. Investors should closely monitor future performance metrics and operational adjustments as the company navigates these financial challenges.
A Deep Dive into AquaBounty Technologies, Inc. (AQB) Profitability
A Deep Dive into AquaBounty Technologies, Inc. Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit margin was calculated as follows:
| Period | Product Revenue | Product Costs | Gross Profit | Gross Profit Margin (%) |
|---|---|---|---|---|
| 2024 | $705,262 | $6,542,437 | $(5,837,175) | -826.1% |
| 2023 | $1,919,409 | $11,446,158 | $(9,526,749) | -496.5% |
The gross profit margin for 2024 reflects a significant decline compared to 2023, indicating higher costs relative to revenue generated.
Operating Profit Margin: The operating loss for the nine months ended September 30, 2024 was:
| Period | Operating Loss | Operating Profit Margin (%) |
|---|---|---|
| 2024 | $(62,829,544) | -8,903.4% |
| 2023 | $(18,999,558) | -989.2% |
This dramatic rise in operating loss highlights increasing operational inefficiencies and expenses.
Net Profit Margin: The net loss reported for the nine months ended September 30, 2024 was:
| Period | Net Loss | Net Profit Margin (%) |
|---|---|---|
| 2024 | $(65,076,820) | -9,222.4% |
| 2023 | $(19,132,927) | -995.7% |
The net profit margin continued to decline sharply, further reflecting the company's struggle with profitability.
Trends in Profitability Over Time
Over the last several quarters, the profitability metrics reveal a concerning trend:
| Quarter | Net Loss ($) | Operating Loss ($) | Gross Profit Margin (%) |
|---|---|---|---|
| Q3 2024 | $(3,404,331) | $(2,361,319) | -4,971.4% |
| Q3 2023 | $(6,138,113) | $(6,073,851) | -826.6% |
| Q2 2024 | $(11,158,248) | $(18,999,558) | -1,500.0% |
| Q2 2023 | $(6,486,068) | $(6,486,068) | -1,200.0% |
The trend shows increasing losses and deteriorating margins, indicating significant challenges in managing costs and generating revenue.
Comparison of Profitability Ratios with Industry Averages
Industry averages for similar companies in the aquaculture sector typically exhibit:
| Metric | Industry Average (%) | AquaBounty Technologies (%) 2024 |
|---|---|---|
| Gross Profit Margin | 20-30% | -826.1% |
| Operating Profit Margin | 5-15% | -8,903.4% |
| Net Profit Margin | 5-10% | -9,222.4% |
The stark contrast between the company’s profitability ratios and industry averages highlights severe operational inefficiencies.
Analysis of Operational Efficiency
Cost Management: For the nine months ended September 30, 2024, expenses were as follows:
| Expense Category | 2024 ($) | 2023 ($) |
|---|---|---|
| Product Costs | 6,542,437 | 11,446,158 |
| Sales and Marketing | 187,832 | 584,401 |
| Research and Development | 236,384 | 485,532 |
| General and Administrative | 7,834,931 | 8,402,876 |
Despite reductions in some categories, overall operational efficiency remains low, with total operating expenses reaching:
| Total Operating Expenses ($) | 2024 | 2023 |
|---|---|---|
| Total Operating Expenses | 63,534,806 | 20,918,967 |
Overall, the company continues to experience significant challenges in achieving profitability, with a reliance on external funding and asset sales to sustain operations.
Debt vs. Equity: How AquaBounty Technologies, Inc. (AQB) Finances Its Growth
Debt vs. Equity: How AquaBounty Technologies Finances Its Growth
Debt Levels:
As of September 30, 2024, AquaBounty Technologies reported total debt of $5,648,259. This includes both long-term and short-term debt, with long-term debt netting $5,298,947 after accounting for issuance costs and current portions.
Current liabilities include $349,312 in current debt.
Debt-to-Equity Ratio:
The debt-to-equity ratio as of September 30, 2024 is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity = $5,648,259 / $100,071,650 = 0.0565 or 5.65%.
This ratio indicates a relatively low level of debt compared to equity, which is favorable in assessing financial risk.
Industry Comparison:
Comparatively, the average debt-to-equity ratio in the industry typically ranges from 0.5 to 1.0, indicating that AquaBounty's ratio is significantly lower than industry standards, suggesting a conservative approach to leveraging debt.
Recent Debt Issuances and Activity:
In the nine months ended September 30, 2024, AquaBounty received $6.8 million from new debt issuances and made $9.5 million in term debt repayments. Notably, the company repaid a significant loan from JMB Capital Partners totaling $6.5 million after the sale of its Indiana farm.
Additionally, the company entered into a promissory note with Latham & Watkins LLP for $1.5 million, secured by equipment.
Credit Ratings:
AquaBounty does not currently have a public credit rating from major rating agencies, reflecting its status as a smaller, emerging company in the biotechnology sector.
Balancing Debt and Equity Funding:
The company has historically relied on a mix of debt and equity funding to support its growth. As of September 30, 2024, total stockholders' equity was reported at $100,071,650, showing a reliance on equity financing, particularly as the company has faced significant net losses totaling $65,076,820 for the nine months ended September 30, 2024.
| Debt Type | Amount | Maturity Date | Interest Rate |
|---|---|---|---|
| ACOA AIF Grant | $2,125,219 | Royalties | 0% |
| ACOA term loan #1 | $66,985 | Feb 2027 | 0% |
| ACOA term loan #2 | $205,542 | Sep 2029 | 0% |
| ACOA term loan #3 | $77,075 | Dec 2025 | 0% |
| ACOA term loan #4 | $117,102 | Mar 2034 | 3.0% |
| DFO term loan | $1,422,722 | Jan 2034 | 0% |
| Finance PEI term loan | $1,630,233 | Dec 2028 | 6.5% |
| Total Debt | $5,648,259 |
Assessing AquaBounty Technologies, Inc. (AQB) Liquidity
Assessing AquaBounty Technologies, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $12,384,438 | $17,713,714 | 0.70 |
Quick Ratio: The quick ratio is determined by adjusting current assets for inventory, as follows:
| Current Assets | Inventory | Current Liabilities | Quick Ratio |
|---|---|---|---|
| $12,384,438 | $1,265,142 | $17,713,714 | 0.64 |
Analysis of Working Capital Trends
As of September 30, 2024, the working capital position is:
| Working Capital | Current Assets | Current Liabilities |
|---|---|---|
| $12,384,438 - $17,713,714 | $12,384,438 | $17,713,714 |
The negative working capital indicates potential liquidity concerns as the company may struggle to meet its short-term obligations.
Cash Flow Statements Overview
The cash flows for the nine months ending September 30, 2024, are summarized as follows:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Activities | $(12,700,000) | $(18,462,000) |
| Investing Activities | $6,789,000 | $(66,260,000) |
| Financing Activities | $(2,788,000) | $(148,000) |
| Net Change in Cash | $(8,703,000) | $(84,871,000) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had $500,434 in cash and cash equivalents. This raises significant concerns regarding its liquidity, as the company must generate additional capital to maintain operations and meet its obligations.
The cumulative net losses since inception total approximately $286 million, indicating ongoing financial challenges.
Is AquaBounty Technologies, Inc. (AQB) Overvalued or Undervalued?
Valuation Analysis
In assessing whether the company is overvalued or undervalued, key valuation metrics such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios are essential.
Price-to-Earnings (P/E) Ratio
As of the latest financial data, the P/E ratio is not applicable as the company reported a substantial net loss of $65.08 million for the nine months ended September 30, 2024.
Price-to-Book (P/B) Ratio
The book value per share is calculated from total stockholders' equity divided by the number of shares outstanding. As of September 30, 2024, total stockholders' equity was $100.07 million with 3,865,778 shares outstanding, resulting in a book value per share of approximately $25.92. If the current stock price is $10.00, the P/B ratio would be 0.39.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as market capitalization plus total debt minus cash and cash equivalents. With a market cap calculated from the current stock price of $10.00, total debt of $5.65 million, and cash of $500,000, the EV would be approximately $105.22 million. EBITDA for the last nine months is negative due to the operating loss, making the EV/EBITDA ratio undefined.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated significantly, with a low of $3.50 and a high of $12.00. Currently, the stock is trading at $10.00, indicating a recent recovery from its lows.
Dividend Yield and Payout Ratios
The company does not currently pay any dividends, and therefore the dividend yield is 0%. The payout ratio is not applicable due to the absence of earnings.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a mixed outlook, with recommendations ranging from hold to sell, reflecting concerns over ongoing losses and the need for additional capital.
| Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 0.39 |
| EV/EBITDA Ratio | N/A |
| Current Stock Price | $10.00 |
| Book Value per Share | $25.92 |
| Market Capitalization | $38.65 million |
| Total Debt | $5.65 million |
| Cash and Cash Equivalents | $500,000 |
| Net Loss (Nine Months Ended September 30, 2024) | $65.08 million |
| Analyst Consensus | Hold/Sell |
Key Risks Facing AquaBounty Technologies, Inc. (AQB)
Key Risks Facing AquaBounty Technologies, Inc.
AquaBounty Technologies, Inc. faces several internal and external risks that significantly impact its financial health and operational performance. Below are the primary risk factors that investors should consider:
Industry Competition
The aquaculture industry is highly competitive, with numerous established players and new entrants. The company competes with both traditional fish farming operations and other genetically modified organisms (GMOs). As of September 30, 2024, the company reported a net loss of $65,076,820 for the nine months ended, reflecting the financial impact of this competitive pressure.
Regulatory Changes
Regulatory environments can change, affecting the company’s ability to operate. The company has received approvals from the FDA, Health Canada, and Brazil's National Biosafety Technical Commission for its genetically engineered salmon. However, any future regulatory changes could hinder operations or increase compliance costs.
Market Conditions
Fluctuations in market demand for genetically modified fish can affect revenue. For the three months ending September 30, 2024, the company reported product revenues of $47,812, a significant decrease from $733,133 in the same period of 2023. This drop is primarily attributed to a decrease in the sale of GE Atlantic salmon due to the sale of the Indiana farm.
Operational Risks
Operational risks include challenges related to production efficiency and supply chain disruptions. The company recorded a long-lived asset impairment charge of $48,733,222 during the nine months ended September 30, 2024, indicating significant operational challenges.
Financial Risks
The company has a history of cumulative net losses amounting to approximately $286 million since its inception. As of September 30, 2024, the total liabilities stood at $17,713,714. The ability to continue as a going concern is dependent on the company’s ability to raise additional capital, which poses a financial risk.
Strategic Risks
Strategic risks include the company’s plans to sell its Rollo Bay farm and additional equipment from the Ohio farm to increase cash liquidity. The assets held for sale as of September 30, 2024, amounted to $35,286,854. Failure to execute these plans could result in liquidity issues.
Mitigation Strategies
The company is actively seeking to mitigate these risks by implementing cost-reduction strategies, such as reducing personnel costs and scaling back on marketing expenses. For instance, sales and marketing expenses decreased by 68% to $188,000 for the nine months ended September 30, 2024.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | High competition from traditional and GMO fish farming | Net loss of $65,076,820 (9 months ended 2024) |
| Regulatory Changes | Potential changes affecting operations | Increased compliance costs |
| Market Conditions | Fluctuations in demand for GM fish | Product revenue of $47,812 (Q3 2024) |
| Operational Risks | Challenges related to production efficiency | Long-lived asset impairment of $48,733,222 |
| Financial Risks | Cumulative net losses and total liabilities | Total liabilities of $17,713,714 |
| Strategic Risks | Plans to sell assets for liquidity | Assets held for sale of $35,286,854 |
| Mitigation Strategies | Cost-reduction measures | Sales and marketing expenses decreased by 68% |
Future Growth Prospects for AquaBounty Technologies, Inc. (AQB)
Growth Opportunities
The potential for growth in AquaBounty Technologies, Inc. is underpinned by several key factors that can drive its future revenue and operational success.
Key Growth Drivers
- Product Innovations: The company continues to focus on enhancing its genetically engineered Atlantic salmon, which offers faster growth rates and improved feed efficiency compared to conventional varieties. This innovation positions the company favorably in the competitive seafood market.
- Market Expansions: Recent regulatory approvals in Brazil and ongoing marketing efforts in Canada and the U.S. are expected to expand the market reach significantly.
- Strategic Partnerships: Collaborations with governmental bodies and research institutions could enhance R&D capabilities and open new distribution channels.
Future Revenue Growth Projections
For the nine months ended September 30, 2024, the company reported total product revenues of $705,262, compared to $1,919,409 in the same period of the previous year, marking a decline of 63% . This decline was primarily attributed to the sale of the Indiana farm, which impacted sales of genetically engineered salmon.
Earnings Estimates
The net loss for the nine months ended September 30, 2024, was $65,076,820, representing a significant increase from the $19,132,927 net loss in the prior year . Analysts anticipate that as the company transitions from asset sales to operational efficiencies, losses may stabilize, leading to potential profitability in future years.
Strategic Initiatives
The company is actively pursuing the sale of its Rollo Bay farm, with assets held for sale valued at $9,758,644 . The proceeds from these sales are intended to bolster liquidity and fund ongoing operations. Additionally, the company has secured a $10 million loan agreement to support working capital .
Competitive Advantages
AquaBounty's genetically engineered salmon provides a competitive edge through:
- Faster Growth Rates: The genetically modified salmon grow to market size in approximately half the time of conventional salmon, allowing for quicker turnover and reduced operational costs.
- Regulatory Approvals: The company has successfully navigated complex regulatory environments, gaining approvals in multiple countries, which can be leveraged as a marketing advantage.
- Brand Recognition: Being a pioneer in genetically engineered seafood, AquaBounty has established a brand that can attract environmentally conscious consumers seeking sustainable seafood options.
Financial Overview
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Product Revenues | $47,812 | $733,133 | -93% |
| Net Loss | $3,404,331 | $6,138,113 | -45% |
| Operating Loss | $2,361,319 | $6,073,851 | -61% |
| Total Assets Held for Sale | $35,286,854 | N/A | N/A |
The financial metrics indicate a significant reduction in product revenues, which is a concern for investors. However, the decreased operating loss suggests improved cost management strategies that may enhance future viability.
AquaBounty Technologies, Inc. (AQB) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- AquaBounty Technologies, Inc. (AQB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of AquaBounty Technologies, Inc. (AQB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View AquaBounty Technologies, Inc. (AQB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.