HEXO (HEXO 6.87%) wasn't exactly a marijuana stock favorite Thursday after releasing its fiscal 2021 second-quarter results -- despite some good numbers and positive developments.
For the period, which ended Jan. 31, the Canadian company's net revenue zoomed 94% higher on a year-over-year basis to 32.8 million Canadian dollars ($26.4 million). That tally was 12% higher than its fiscal Q1 result. Net loss narrowed considerably from the year-ago figure, slimming to CA$20.8 million ($16.7 million) from the Q2 2020 shortfall of CA$298.2 million ($239.8 million). However, the Q2 2021 net loss was significantly deeper than Q1's net loss of CA$4.2 million ($3.4 million).
According to Zack's Investment Research, the company's top-line result slightly exceeded the average analyst estimate, but the net loss of $0.13 per share was substantially worse than the expected deficit of $0.03 per share.
Typically for a marijuana company, HEXO likes to put a spotlight on its adjusted EBITDA as a gauge of its profitability. On that basis, the company was barely in the black for the quarter, at roughly CA$202,000 ($162,442). Yet that was a marked improvement over both the preceding quarter's approximately CA$419,000 ($336,946) loss, and Q2 2020's shortfall of CA$10.9 million ($8.8 million).
The company's revenue growth was fueled by improvements in both the ever-important recreational-use marijuana category and cannabis-infused beverages, a relatively new product segment in Canada. Sales in each of those segments rose by 11% on a quarter-over-quarter basis.
Many HEXO observers will be keeping an eye on Zenabis Global, the peer it is acquiring for CA$235 million ($189 million). Adding Zenabis Global's assets to its own will vault HEXO onto the list of top three Canadian producers in terms of recreational-use cannabis sales; it will also provide the company with important cultivation properties and a license to export medical marijuana to the countries of the European Union.