E Hexo Corp. Q2 Financial Report: Record Revenue And Major Improvement In Adj. EBITDA

HEXO Corp. (HEXO) is a seed-to-sale Canadian licensed producer supplying the Canadian adult-use markets consumer packaged goods under its HEXO Cannabis, Up Cannabis, and Original Stash brands. It announced its Q2, 2021 financial and operating results on Thursday for the period ended January 31, 2021, as follows:

Q2 Financial Highlights 

(All results are presented in Canadian dollars and compared to the previous quarter. Go here to convert into other currencies.)

  • Gross Revenue: increased 10.6% to $45.7M, the highest in the Company’s history
  • Net Revenue: increased 11.6% to $32.9M 
    • Adult-use cannabis: +10.5% to $26.9M
    • Adult-use beverages: +11.0% to $3.4M
    • Medical: -13.2% to $0.4M
    • Int'l: +77.8% to $2,0M
    • Whlse: -72.8% to $0.1M
  • Gross Margin: unchanged @ 35%
  • Net Loss: increased 396.5% to $(20.8)M 
  • Adj. EBITDA: increased to $202M from $(419)M 

Q2 Operational Highlights

  • Maintained number one position for market share in Quebec while increasing adult-use net revenues in the rest of Canada to 49% of the Company’s sales composition, up from 44% in 1Q21.
  • Maintained the number one position in the beverage category with net revenue increasing 11% over 1Q21.

Management Commentary

HEXO CEO, and co-founder, Sebastien St-Louis said:

“We are especially excited about our recently announced agreement to acquire Zenabis. We believe this transaction will be accretive for our shareholders and will position HEXO for accelerated domestic and international growth. The acquisition will place HEXO solidly in the top three position among licensed producers for Canadian adult-use cannabis sales, based on the most recent interim quarterly financial statements.”

Stock Performance

The stock price of HEXO, a constituent in the munKNEE Pure-Play Pot Stock Index, has more than doubled in price YTD (+110.9%) and is up 11.0% so far in March as illustrated in the chart below:

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