Diversification helps Urban-gro trim losses

LAFAYETTE — Urban-gro Inc. (Nasdaq: UGRO), traditionally a firm that focused on indoor agriculture engineering services for cannabis growers, moved closer to profitability in the third quarter thanks in part to a diversification of its operations. 

The controlled-environment agriculture (CEA) firm grew its year-over-year sales by 69% to $20.9 million in the most recent period. 

Urban-Gro posted a net loss of $3.4 million, an improvement over the net loss of $8.7 million in the same period last year.

The positive momentum came as it has expanded its offerings to include design and architectural services for a variety of users.  

“Since launching our sector diversification initiative just over a year ago, Urban-Gro has successfully evolved into a multi-sector focused professional services consulting firm. Our strengthening revenue and adjusted EBITDA performance in the third quarter reflects a solid improvement on both a sequential and year-over-year basis. Given our strengthening pipeline and backlog, we continue to anticipate sequential quarterly improvement as we work to recapture positive adjusted EBITDA generation,” Urban-Gro CEO Bradley Nattrass said in a prepared statement. “This has been the result of our steps to insulate our business from cannabis market headwinds by diversifying our revenue streams into additional sectors outside of CEA while being proactive with expense optimization and resource allocation to drive efficiencies and scale in our model.”

Looking ahead to the fourth quarter, Urban-Gro is projecting “$30 million in revenues and breakeven to slightly positive adjusted EBITDA.”

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