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• Net Revenue: Increased 17% to $42.7 million compared to Q1 of last year.

• International Sales: Grew 2.3% year over year to $3.3 million.

• Adjusted Gross Margin: Increased to $14.3 million or 33% from $11.2 million or 31% in the prior year period.

• Operating Expenses: Increased 11% to $25.1 million from $22.6 million in the prior year period.

• SG&A Costs: Totaled $17 million, a 7% increase from the prior year, but decreased as a percentage of net revenue from 44% to 40%.

• Adjusted EBITDA: $1.4 million compared to $0.1 million in the prior year period.

• Net Loss: $23 million compared to a net loss of $15.8 million in Q1 fiscal 2024.

• Cash Used by Operating Activities: $6.3 million compared to $8.1 million in the prior year period.

• Total Cash Position: $71.2 million, including both restricted and unrestricted cash.

• Capital Expenditures: Planned investment of $8 million to $10 million in sustaining capital expenditures during fiscal 2025.

• Warning! GuruFocus has detected 2 Warning Signs with OGI.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OrganiGram Holdings Inc (NASDAQ:OGI) achieved strong momentum as Canada's largest cannabis company by market share, with significant growth in pre-rolls and vapes.

• The company completed the Motif acquisition, which is expected to yield $10 million in annualized savings within 24 months, with early synergies already being realized.

• OrganiGram expanded its national market share by 500 basis points year over year, reflecting strategic positioning in high-growth segments.

• International sales grew to $3.3 million in Q1, with expectations for continued growth throughout fiscal 2025, supported by strategic investments and partnerships.

• The company is actively pursuing global expansion opportunities, with a focus on leveraging its strong balance sheet and strategic investments for international growth.

Negative Points

• OrganiGram faced competitive headwinds in the Edibles category, with market share declines due to low-cost single count gummies and price compression.

• Adjusted gross margin decreased sequentially from 37% to 33%, impacted by seasonally lower volume and competitive forces in the gummy category.

• Operating expenses increased by 11% to $25.1 million, primarily due to acquisition and transaction costs related to the Motif acquisition.

• The company reported a net loss of $23 million for the quarter, compared to a net loss of $15.8 million in Q1 fiscal 2024.

• There are concerns about potential oversupply in international markets, particularly in Germany, as more licensed producers enter the space.