Cresco Labs (CRLBF) reported its first-quarter earnings yesterday. The company generated revenues of $21.1 million in the first quarter, a YoY rise of 311%. Cresco Labs’ revenues had risen 411% YoY in the fourth quarter also. Despite the impressive jump, Cresco Labs’ Q1 revenues fell short of analysts’ estimates. Analysts polled by Thomson Reuters expected the company to report revenues of $22.6 million in the quarter.
While cannabis investors have been focused on top-line growth, it’s worthwhile to look at profitability metrics as well. In the first quarter, Cresco Labs reported operational gross profit before biological assets accounting of $9.4 million, or 44.6% of its revenues. The metric stood at $2.2 million and 43.6% of revenues in the first quarter of 2018.
However, other profitability metrics showed deterioration from the first quarter of 2018. For instance, Cresco Labs’ adjusted EBITDA fell from $1.0 million in Q1 2018 to $0.8 million in Q1 2019. It reported a net loss of $7.6 million in the first quarter as compared to a net income of $0.6 million in the first quarter of 2018.
Cannabis players have seen widening net losses amid their expansion spree. Greenlane Holdings (GNLN) reported a net loss of $17.6 million in the first quarter as compared to a net profit of $2.3 million in the first quarter of 2018. The company had its IPO last month only and after the initial frenzy, its stock has fallen below the IPO price. Greenlane Holdings is an ancillary play in the cannabis sector. Read Greenlane Holdings Gives You Exposure to the Cannabis Sector for more analysis.