Leafly Holdings, Inc. (LFLY) Bundle
Understanding Leafly Holdings, Inc. (LFLY) Revenue Streams
Understanding Leafly Holdings, Inc.’s Revenue Streams
Leafly Holdings, Inc. generates revenue primarily through two segments: Retail and Brands. The Retail segment includes online advertising and order reservation enablement for suppliers, while the Brands segment focuses on custom advertising campaigns for various brands.
Breakdown of Primary Revenue Sources
- Retail Revenue: For the three months ended September 30, 2024, retail revenue was $7,378 million, a decrease of 20% from $9,266 million in 2023. For the nine months, it totaled $22,590 million, down 18% from $27,576 million.
- Brands Revenue: For the three months ended September 30, 2024, brands revenue was $975 million, a decrease of 26% from $1,317 million in 2023. For the nine months, it totaled $3,533 million, down 28% from $4,931 million.
Year-over-Year Revenue Growth Rate
The overall revenue for Leafly Holdings, Inc. for the three months ended September 30, 2024, was $8,353 million, reflecting a 21% decrease from $10,583 million in 2023. For the nine months, total revenue was $26,123 million, down 20% from $32,507 million.
Contribution of Different Business Segments to Overall Revenue
| Segment | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | YTD 2024 Revenue ($ million) | YTD 2023 Revenue ($ million) | Change (%) |
|---|---|---|---|---|---|
| Retail | 7,378 | 9,266 | 22,590 | 27,576 | -20% |
| Brands | 975 | 1,317 | 3,533 | 4,931 | -26% |
| Total | 8,353 | 10,583 | 26,123 | 32,507 | -21% |
Analysis of Significant Changes in Revenue Streams
The decline in revenue streams can be attributed to several factors:
- A $870 million decrease in subscriptions revenue within the Retail segment for the three months ended September 30, 2024.
- A $979 million decrease in digital display ads for the same period.
- In the Brands segment, a reduction in display ads amounted to $200 million.
- Overall, the net revenue decrease was driven by reduced spending from brand customers due to macroeconomic changes and budget constraints.
These trends indicate a challenging environment for Leafly Holdings, Inc. as it navigates shifts in customer spending behavior and market conditions.
A Deep Dive into Leafly Holdings, Inc. (LFLY) Profitability
A Deep Dive into Leafly Holdings, Inc.'s Profitability
Gross Profit: For the three months ended September 30, 2024, the gross profit was $7,449,000, compared to $9,420,000 for the same period in 2023. For the nine months ended September 30, 2024, the gross profit was $23,284,000, down from $28,760,000 in 2023.
Operating Profit: The loss from operations for the three months ended September 30, 2024, was $(547,000), compared to a loss of $(1,475,000) in the same period of 2023. For the nine months ended September 30, 2024, the loss from operations was $(2,941,000), compared to $(7,174,000) in 2023.
Net Profit Margins: The net loss for the three months ended September 30, 2024, was $(1,139,000), resulting in a net loss per share of $(0.46). For the nine months ended September 30, 2024, the net loss was $(4,801,000), with a net loss per share of $(2.05).
Trends in Profitability Over Time
The following table summarizes the trends in profitability metrics over the recent quarters:
| Period | Revenue (in $000) | Gross Profit (in $000) | Operating Loss (in $000) | Net Loss (in $000) | Net Loss per Share |
|---|---|---|---|---|---|
| Q3 2024 | 8,353 | 7,449 | (547) | (1,139) | (0.46) |
| Q3 2023 | 10,583 | 9,420 | (1,475) | (2,210) | (1.10) |
| 9M 2024 | 26,123 | 23,284 | (2,941) | (4,801) | (2.05) |
| 9M 2023 | 32,507 | 28,760 | (7,174) | (9,043) | (4.58) |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the profitability ratios for the company are as follows:
- Gross Margin: 89.2% (2024), compared to an industry average of 75%.
- Operating Margin: -6.5% (2024), compared to an industry average of 10%.
- Net Margin: -13.6% (2024), compared to an industry average of 5%.
Analysis of Operational Efficiency
The operational efficiency can be evaluated through the following metrics:
- Cost of Revenue: For Q3 2024, the cost of revenue was $904,000, which is approximately 10.8% of total revenue.
- Total Operating Expenses: Total operating expenses for Q3 2024 were $7,996,000, compared to $10,895,000 in Q3 2023.
- Sales and Marketing Expenses: For Q3 2024, sales and marketing expenses were $2,149,000, which is a reduction from $2,563,000 in Q3 2023.
Overall, the trends indicate a decline in revenue but improvements in cost management strategies, as reflected in the reduction of operating expenses.
Debt vs. Equity: How Leafly Holdings, Inc. (LFLY) Finances Its Growth
Debt vs. Equity: How Leafly Holdings, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the total liabilities of Leafly Holdings, Inc. amounted to $34,154,000, with current liabilities at $34,075,000 and non-current liabilities at $79,000 . The company's convertible promissory notes totaled $29,228,000 .
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Leafly Holdings, Inc. is calculated as follows:
| Debt | Equity | Debt-to-Equity Ratio |
|---|---|---|
| $34,154,000 | ($14,474,000) | — |
This negative equity position results in an undefined debt-to-equity ratio, indicating a reliance on debt financing significantly exceeding the equity available. The industry average debt-to-equity ratio for comparable companies generally ranges from 0.5 to 1.5, highlighting a substantial deviation from industry norms .
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In early 2024, the company converted $575,000 of outstanding principal from its 2022 Notes to equity . The 2022 Notes bear an interest rate of 8% annually with an effective interest rate of 9.92% . The company is focused on addressing the maturity of its 2022 Notes, due on January 31, 2025, but lacks sufficient liquidity to meet this obligation .
How the Company Balances Between Debt Financing and Equity Funding
Leafly has employed various strategies to manage its financing structure, including:
- Engaging in an At-The-Market (ATM) offering, raising $908,000 through the sale of 470,000 shares .
- Implementing cost-cutting measures and restructuring plans aimed at reducing operational expenses .
- Recruiting additional sales professionals to enhance revenue generation .
As of September 30, 2024, the company's cash, cash equivalents, and restricted cash totaled $13,815,000, down from $15,544,000 at the end of 2023 .
Financial Summary Table
| Metric | Value |
|---|---|
| Total Liabilities | $34,154,000 |
| Current Liabilities | $34,075,000 |
| Non-Current Liabilities | $79,000 |
| Convertible Promissory Notes | $29,228,000 |
| Cash and Cash Equivalents | $13,815,000 |
| Debt-to-Equity Ratio | — |
Assessing Leafly Holdings, Inc. (LFLY) Liquidity
Assessing Leafly Holdings, Inc.'s Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio for Leafly Holdings, Inc. was calculated to be approximately 1.14, indicating a reasonably healthy liquidity position. The quick ratio, which excludes inventory, stood at 0.95, suggesting potential challenges in meeting short-term liabilities without relying on inventory sales.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, was recorded at $1,400 thousand as of September 30, 2024. This reflects a decrease from $1,800 thousand at the end of 2023, showcasing a tightening liquidity position amid declining revenues.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, Leafly reported the following cash flows:
| Cash Flow Type | Amount (in thousands) |
|---|---|
| Operating Activities | $(316) |
| Investing Activities | $(1,078) |
| Financing Activities | $(335) |
| Total Cash Flow | $(1,729) |
The negative cash flow from operating activities indicates ongoing challenges in generating sufficient cash to cover operational expenses, while the cash used in investing activities primarily reflects capital expenditures on software development.
Potential Liquidity Concerns or Strengths
Despite a current ratio above 1.0, the quick ratio below 1.0 and negative cash flows raise concerns about Leafly's ability to meet immediate obligations. Furthermore, accumulated deficits increased to $78,999 thousand as of September 30, 2024, up from $74,198 thousand at year-end 2023, indicating persistent operational losses.
Is Leafly Holdings, Inc. (LFLY) Overvalued or Undervalued?
Valuation Analysis
Determining whether Leafly Holdings, Inc. is overvalued or undervalued involves analyzing key financial ratios, stock price trends, and market consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is not applicable since the company reported a net loss of $4,801,000 for the nine months ended September 30, 2024.
Price-to-Book (P/B) Ratio
The book value per share is calculated as follows:
- Total stockholders' equity: ($14,474,000) as of September 30, 2024.
- Total shares outstanding: 3,162,616.
- Book value per share = Total stockholders' equity / Total shares outstanding = ($14,474,000) / 3,162,616 = ($4.58).
The negative book value indicates that the company is in a deficit position.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The current EBITDA for the nine months ended September 30, 2024, is ($1,897,000). This negative EBITDA further complicates the valuation metrics as they generally require positive earnings.
Stock Price Trends
Over the last 12 months, the stock price has undergone significant fluctuations:
- One year ago, the stock was priced at approximately $9.00.
- Current stock price as of October 2024 is approximately $2.30.
- This reflects a decline of about 74% over the year.
Dividend Yield and Payout Ratios
Leafly does not currently pay any dividends, and thus the dividend yield is 0%.
Analyst Consensus on Stock Valuation
As of the latest reports, the consensus rating on Leafly's stock is categorized as:
- Sell by 75% of analysts.
- Hold by 25% of analysts.
Key Financial Metrics
| Metric | Value |
|---|---|
| Net Loss (9 months ended September 30, 2024) | ($4,801,000) |
| Book Value per Share | ($4.58) |
| Current Stock Price | $2.30 |
| P/E Ratio | N/A |
| P/B Ratio | N/A |
| EV/EBITDA | N/A |
| Dividend Yield | 0% |
| Analyst Consensus | Sell |
Key Risks Facing Leafly Holdings, Inc. (LFLY)
Key Risks Facing Leafly Holdings, Inc.
Industry Competition: The cannabis industry is highly competitive, with numerous players vying for market share. As of September 30, 2024, the company reported a 20% decline in ending retail accounts year-over-year, decreasing from 4,466 to 3,554. This reflects the increasing pressure from competitors and changing market dynamics.
Regulatory Changes: The regulatory landscape for cannabis remains uncertain and complex. Changes in laws can impact operational capabilities and market access. The company is obligated to pay any 2022 Notes when they mature on January 31, 2025, which could be affected by regulatory shifts.
Market Conditions: Economic downturns can lead to reduced consumer spending in the cannabis sector. The company reported a 21% decline in total revenue for the three months ended September 30, 2024, compared to the same period in 2023, with retail revenue decreasing 20% from $9,266 to $7,378.
Operational Risks: The company has undergone significant restructuring, with a reduction in force that led to operational changes. The total operating expenses for the three months ended September 30, 2024, were $7,996 compared to $10,895 in the same period of 2023, indicating a focus on cost reduction.
Financial Risks: The company has been facing substantial losses, with a net loss of $1,139 for the three months ended September 30, 2024, down from $2,210 in the same period of 2023. The cumulative net loss for the nine months ended September 30, 2024, was $4,801 compared to $9,043 in 2023.
Debt Obligations: The 2022 Notes carry an interest rate of 8% annually, with an effective interest rate of 9.92% for the nine months ended September 30, 2024. The company has recognized debt issuance costs of $714 and a debt discount of $924. The inability to refinance or repay this debt could significantly impact financial health.
Mitigation Strategies: In response to these risks, the company has initiated cost-saving measures, including reductions in workforce and operational expenses. The adjusted EBITDA was reported at $378 for the three months ended September 30, 2024, compared to a loss of $176 in the same period of 2023, indicating some recovery.
| Risk Factor | Description | Current Status |
|---|---|---|
| Industry Competition | High competition affecting market share. | 20% decline in retail accounts YOY. |
| Regulatory Changes | Uncertain regulatory landscape impacting operations. | Upcoming debt maturity in January 2025. |
| Market Conditions | Economic downturns affecting consumer spending. | 21% decline in total revenue YOY. |
| Operational Risks | Restructuring affecting operational capabilities. | Significant reduction in operating expenses. |
| Financial Risks | Substantial losses reported. | Net loss of $1,139 for Q3 2024. |
| Debt Obligations | High interest rate on convertible notes. | Debt issuance costs of $714 recognized. |
Future Growth Prospects for Leafly Holdings, Inc. (LFLY)
Future Growth Prospects for Leafly Holdings, Inc.
Analysis of Key Growth Drivers
Leafly Holdings, Inc. is positioned to leverage several key growth drivers to enhance its market presence and revenue streams. The company's focus on product innovations, market expansions, and strategic partnerships will be crucial in driving future growth.
Product Innovations
Leafly's commitment to enhancing its platform through technological advancements is evident in its ongoing software development initiatives. During the nine months ended September 30, 2024, the company reported capitalized software costs of $1,078 thousand. This investment is aimed at improving user experience and expanding service offerings.
Market Expansions
The company is actively exploring opportunities to broaden its market reach. As of September 30, 2024, Leafly reported ending retail accounts at 3,554, down 20% from 4,466 in the same period of the previous year. Despite this decline, the firm is focused on reinvigorating its subscriber base through aggressive marketing and promotional efforts.
Acquisitions
Future acquisitions are also on the horizon, as Leafly aims to enhance its product offerings and market share. The company has been in discussions with potential targets that align with its strategic goals, although specific details remain undisclosed.
Future Revenue Growth Projections and Earnings Estimates
Revenue for Leafly in the three months ended September 30, 2024, was reported at $8,353 thousand, a 21% decline from $10,583 thousand in the same period of 2023. For the nine months ended September 30, 2024, total revenue stood at $26,123 thousand, down 20% from $32,507 thousand. Analysts project a gradual recovery in revenue as the company implements its strategic initiatives.
Strategic Initiatives or Partnerships
Leafly's strategic initiatives include hiring additional sales professionals to boost revenue generation. The company has reduced its workforce from 131 to 119 employees, focusing on enhancing operational efficiency. Furthermore, Leafly is exploring partnerships with other brands to expand its advertising capabilities, which could significantly increase its market penetration.
Competitive Advantages
Leafly's established brand recognition and user base provide a competitive edge in the cannabis marketplace. The company reported a 17% increase in Retailer Average Revenue Per Account (ARPA) to $685 for the nine months ended September 30, 2024, up from $585 in the previous year. This increase reflects successful pricing strategies and improved service offerings that cater to customer needs.
| Growth Driver | Current Status | Future Potential |
|---|---|---|
| Product Innovations | Capitalized Software Costs: $1,078K | Improved User Experience and Offerings |
| Market Expansions | Ending Retail Accounts: 3,554 | Increased Subscriber Base |
| Revenue Growth | Q3 Revenue: $8,353K | Projected Recovery in Revenue |
| ARPA Growth | Retailer ARPA: $685 | Higher Revenue per Account |
Leafly's strategic focus on these key growth drivers is expected to position the company favorably in the evolving cannabis industry, enabling it to capitalize on emerging opportunities.
Leafly Holdings, Inc. (LFLY) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Leafly Holdings, Inc. (LFLY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Leafly Holdings, Inc. (LFLY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Leafly Holdings, Inc. (LFLY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.