Report
FREE
• Rubicon reported Q3 financial results that beat our estimates. Revenue came in at $15.6M (+16% YoY) compared to our estimate of $15.1M and adjusted EBITDA came in at $1.7M (11% margin) compared to our estimate of $1.0M.
• ROMJ also announced that Glen Ibbott has been appointed as CFO, its newly acquired Cascadia facility has received its Health Canada license, and that it has entered into a new credit agreement for $4.0M.
• We recently initiated coverage on Rubicon Organics, see here.
Yesterday, after market close, Rubicon Organics Inc. (ROMJ:TSXV, ROMJF:OTCQX) reported its Q3 financials that beat our estimates. We remind readers that we recently initiated coverage on ROMJ (read here), and today’s price makes for a compelling entry point as the Company executes and the investor sentiment for cannabis stocks remains near all-time lows. We are maintaining our BUY rating and $1.00/share target price on Rubicon Organics.
Financial Highlights
• Revenue for the quarter was $15.6M, an increase of 16% YoY and 8% QoQ, compared to our estimate of $15.1M. Product sales came in at $19.9M, representing 12% YoY growth.
• This was achieved through new genetic launches and product innovation, resulting in 6.2% national market share in premium flower and pre-rolls, 13.2% in premium vapes, 16.0% in premium edibles, and having the #1 topical SKU. See Figure 2 for YoY market share changes.
• Gross margin (before fair value adjustments) came in at 34%, consistent with our 35% forecast and above the 32% reported in Q3/24.
• Adjusted EBITDA came in at $1.7M, versus our estimate of $1.0M and the $2.0M reported last year, representing an 11% margin (vs. 6% expected). This value comes after adding back $252K in Cascadia startup costs. Management attributes the strong margins to operational scale, disciplined cost control, and focus on quality premium products.
• Production costs represented 17% of revenue, an all-time low, and salaries and wages represented 15% of revenue, the lowest since Q3/23.
• Net income totalled $2.8M vs. our estimate of $0.8M, which was largely due to a $2.8M fair value adjustment. OCF came in at $0.5M in the quarter, or $1.5M before working capital changes.
• Rubicon ended the quarter with $6.7M in cash and $9.3M in debt, prior to entering a new credit agreement earlier this week.
ROMJ: Strong Growth in Q3; Various Catalysts Ahead
What you need to know:• Rubicon reported Q3 financial results that beat our estimates. Revenue came in at $15.6M (+16% YoY) compared to our estimate of $15.1M and adjusted EBITDA came in at $1.7M (11% margin) compared to our estimate of $1.0M.
• ROMJ also announced that Glen Ibbott has been appointed as CFO, its newly acquired Cascadia facility has received its Health Canada license, and that it has entered into a new credit agreement for $4.0M.
• We recently initiated coverage on Rubicon Organics, see here.
Yesterday, after market close, Rubicon Organics Inc. (ROMJ:TSXV, ROMJF:OTCQX) reported its Q3 financials that beat our estimates. We remind readers that we recently initiated coverage on ROMJ (read here), and today’s price makes for a compelling entry point as the Company executes and the investor sentiment for cannabis stocks remains near all-time lows. We are maintaining our BUY rating and $1.00/share target price on Rubicon Organics.
Financial Highlights
• Revenue for the quarter was $15.6M, an increase of 16% YoY and 8% QoQ, compared to our estimate of $15.1M. Product sales came in at $19.9M, representing 12% YoY growth.
• This was achieved through new genetic launches and product innovation, resulting in 6.2% national market share in premium flower and pre-rolls, 13.2% in premium vapes, 16.0% in premium edibles, and having the #1 topical SKU. See Figure 2 for YoY market share changes.
• Gross margin (before fair value adjustments) came in at 34%, consistent with our 35% forecast and above the 32% reported in Q3/24.
• Adjusted EBITDA came in at $1.7M, versus our estimate of $1.0M and the $2.0M reported last year, representing an 11% margin (vs. 6% expected). This value comes after adding back $252K in Cascadia startup costs. Management attributes the strong margins to operational scale, disciplined cost control, and focus on quality premium products.
• Production costs represented 17% of revenue, an all-time low, and salaries and wages represented 15% of revenue, the lowest since Q3/23.
• Net income totalled $2.8M vs. our estimate of $0.8M, which was largely due to a $2.8M fair value adjustment. OCF came in at $0.5M in the quarter, or $1.5M before working capital changes.
• Rubicon ended the quarter with $6.7M in cash and $9.3M in debt, prior to entering a new credit agreement earlier this week.
Underlying
Rubicon Organics
Provider
Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
Other Reports on these Companies
Other Reports from Atrium Research Corporation
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.