Namaste Technologies(TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), an online platform for cannabis products, accessories, and responsible education, reported its financial results for the second quarter ended May 31, 2020. All financial figures are in Canadian dollars unless otherwise indicated.
Second quarter highlights:
- Record net revenues for the Company of $6.9 million for the second quarter ended May 31, 2020, a 73% increase over the same period last year, and a 31% sequential increase over the first quarter of 2020.
- The net segment revenue for CannMart, Namaste’s core growth engine, increased approximately 1500% to over $2.4 million compared to the comparable period in 2019, excluding excise tax.
- CannMart’s revenue increased 82% on a sequential basis from Q1 to Q2 2020.
- Over 33% of second quarter 2020 revenue was derived from cannabis and cannabis products compared to under 5% for the same period in 2019.
- 48% of second quarter 2020 net revenues were derived from Canadian clients compared to 19% from the same period in 2019, a 338% increase in quarter over quarter revenue, reflecting efforts made to focus on growing the Company’s market share within the Canadian market.
- Reported Q2 2020 net loss of $4.8 million compared to $8.6 million in the same quarter last year. The improvement reflects CannMart’s introduction of new distribution channels, restructuring efforts in 2019, and resulting business improvements in 2020.
Net revenue for the second quarter ended May 31, 2020 was $6.9 million, an improvement of 73% compared to $4.0 million for the second quarter of 2019. Gross margin as a percentage of net revenue (before inventory adjustment) for the second quarter ended May 31, 2020 was 9% compared to 18% for the previous period. As illustrated on the chart below, cannabis revenue is demonstrating strong growth and becoming a major component of total revenues.
Overall expenses decreased by $241,913 or 4% for the second quarter ended May 31, 2020 in comparison to the same period last year. The change reflects a decrease in share-based compensation and selling and marketing expenses offset by an increase in office and general costs.
Adjusted EBITDA for the second quarter ended May 31, 2020 was a loss of $4.7 million, compared to a loss of $3.9 million for the second quarter ended May 31, 2019. Net loss for the second quarter ended May 31, 2020 was $4.8 million compared to $8.6 million in the same period last year. The improvement in the net loss is primarily attributed to a decrease in restructuring and other related costs.