Please ensure Javascript is enabled for purposes of website accessibility

Here's What You'll Want to Know About CV Sciences' Q2 Results

By Keith Speights - Aug 7, 2019 at 5:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

CBD product sales continued to soar in the second quarter, but not as much as analysts expected.

CV Sciences (CVSI 2.78%) ranked as the best-performing cannabis stock on the market in 2018. But so far this year, it's been a much different story. CV Sciences got off to a great start with shares rising 45% by late March. However, all of those gains have been given up, with the stock down 5% year to date as the company headed into its second-quarter update.

That Q2 update came after the market closed on Tuesday. Here's what you need to know about CV Sciences' Q2 results.

Hand holding CBD oil in a bottle with marijuana leaves in the background.

Image source: Getty Images.

By the numbers

CV Sciences reported Q2 revenue of $16.9 million, up 36% year over year. However, this result fell short of Wall Street analysts' expectations of Q2 revenue totaling $17.45 million.

The company announced net income in the second quarter of $1.2 million, or $0.01 per share, on a generally accepted accounting principles (GAAP) net income basis. In the prior-year period, CV Sciences' net income was $3.3 million, or $0.03 per share.

CV Sciences posted non-GAAP adjusted net income in Q2 of $3.4 million, or $0.03 per share. This reflected a slight decline from the prior-year period's adjusted net income of $3.6 million, or $0.03 per share. However, it came in a little higher than the consensus analysts' earnings estimate of $0.02 per share.

Behind the numbers

While CV Sciences' Q2 revenue didn't meet analysts' expectations, it set an all-time high for the company. The second quarter also marked the 14th consecutive quarter of sequential revenue growth. This continued growth stemmed primarily from CV Sciences' organic expansion of sales channels. The company reported that its products were carried in 4,591 stores nationwide as of June 30, 2019, up nearly 39% from the end of March.

But what about the earnings decline? The culprit was higher spending. CV Sciences' operating expenses increased nearly 86% year over year to $10.7 million. The company's non-GAAP earnings decline didn't look as bad compared to the prior-year period result, though, thanks to an adjustment related to stock-based compensation.

In addition to its financial results, CV Sciences highlighted several key developments during the second quarter, including:

  • The initiation of domestic sourcing efforts and committing to plan more than 500 acres of hemp in the U.S.
  • Plans to add a new 45,500-square-foot facility to boost its production capacity by 500%.
  • A published clinical study that demonstrated CV Sciences' PlusCBD oils can improve sleep, help reduce appetite, and enhance individuals' quality of life.

Looking ahead

CV Sciences CEO Joseph Dowling mentioned that nine new products have been launched so far this year and noted that the company has "further innovation scheduled for introduction during the second half of the year." Look for CV Sciences to expand its product offerings, particularly with national food, drug, and mass channel retailers.

Dowling also pointed to recent the expansion and strengthening of CBD markets in California, Texas, and Ohio thanks to legislative actions. The company should continue to benefit as more states pass legislation that allows easier access to hemp-based CBD products.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

CV Sciences, Inc. Stock Quote
CV Sciences, Inc.
CVSI
$0.04 (2.78%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.