Exchange: OTC | Sector: Communication Services | Industry: Internet Content Information
Q1 2025
Published: Nov 19, 2024
Earnings Highlights
Revenue of $1.61M up 37.6% year-over-year
EPS of $0.00 increased by 102.5% from previous year
Gross margin of 46.6%
Net income of 11.50K
"Transcripts not available in dataset." -
Leafbuyer Technologies Inc (LBUY) QQ1 2025 Earnings Analysis: Modest top-line Growth with Improving Margins Amid Balance Sheet Tightness in the Cannabis-Deals Platform Space
Executive Summary
Leafbuyer Technologies reported QQ1 2025 results with a revenue of $1.61 million, up 37.6% year over year and 7.2% quarter over quarter, signaling moderate demand for its cannabis-deals platform amid a consolidating online cannabis information ecosystem. Gross profit rose to $0.75 million, producing a gross margin of approximately 46.6%, while operating income expanded to $32.5 thousand and EBITDA reached $0.16 million, underscoring a path toward profitability on an operating basis as the business scales. Net income was a modest $11.5 thousand for the quarter, translating to a net margin of roughly 0.7% and earnings per share (basic) of $0.0001, indicating limited earnings leverage at this stage but positive trajectory on profitability metrics.
Cash flow remained solid in the quarter, with net cash provided by operating activities of about $0.21 million and free cash flow of the same magnitude, contributing to a cash balance of approximately $0.23 million at period end. The balance sheet shows a significant liquidity and leverage challenge: total liabilities of about $2.45 million versus total assets of roughly $0.81 million, resulting in a negative stockholders’ equity position around -$1.65 million. The company also reports a net debt position of about $1.10 million, highlighting ongoing reliance on external financing.
Management commentary is not available in the provided transcript data, limiting the ability to quote management perspectives directly. Given the scale of Leafbuyer’s business and the OTC listing status, the company appears to be navigating a high-visibility, highly fragmented market with limited margin of error on cost controls and financing. The quarter indicates improving gross margins and a positive, albeit small, bottom-line contribution, but the balance sheet remains the primary overhang for near-term valuation and financing considerations.
Key Performance Indicators
Revenue
1.61M
QoQ: 7.23% | YoY:37.61%
Gross Profit
749.28K
46.55% margin
QoQ: 9.54% | YoY:110.31%
Operating Income
32.49K
QoQ: -70.73% | YoY:109.00%
Net Income
11.50K
QoQ: -85.77% | YoY:102.89%
EPS
0.00
QoQ: -87.50% | YoY:102.50%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $1,609,473 for QQ1 2025, YoY +37.6%, QoQ +7.23%
- Revenue: $1,609,473 for QQ1 2025, YoY +37.6%, QoQ +7.23%
- Gross Profit: $749,281; Gross Margin 46.55%
- EBITDA: $158,307; EBITDA Margin ~9.84%
- Operating Income: $32,487; Operating Margin ~2.02%
- Net Income: $11,502; Net Margin ~0.72%
- EPS (basic): $0.0001; Weighted Avg Shs Out ~100.9 million
- Cash Flow: Operating Cash Flow $211,177; Free Cash Flow $211,177
- Cash and Equivalents: $231,381 at period end
- Balance Sheet (selected): Total Assets $807,497; Total Liabilities $2,453,658; Total Stockholders’ Equity -$1,646,161; Long-Term Debt $412,268; Short-Term Debt $923,046
- Liquidity: Current Ratio 0.161; Quick Ratio 0.161; Cash Ratio 0.113
- Net Debt: $1,103,933; Cash Flow to Debt resilience remains modest
- Valuation Context (Peers): Price to Sales 1.25; EV/Revenue ~19.7; P/E ~43.9; Negative or highly variable P/B across peers in the space
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.61M
37.61%
7.23%
Gross Profit
749.28K
110.31%
9.54%
Operating Income
32.49K
109.00%
-70.73%
Net Income
11.50K
102.89%
-85.77%
EPS
0.00
102.50%
-87.50%
Key Financial Ratios
currentRatio
0.16
grossProfitMargin
46.6%
operatingProfitMargin
2.02%
netProfitMargin
0.72%
returnOnAssets
1.42%
returnOnEquity
-0.7%
debtEquityRatio
-0.81
operatingCashFlowPerShare
$0
freeCashFlowPerShare
$0
priceToBookRatio
-1.23
priceEarningsRatio
43.86
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcripts array is empty in the provided data. As a result, there are no management quotes or call themes to quote or categorize. If transcripts become available, we would summarize management themes by: strategy and roadmap (growth channels, platform enhancements, monetization strategies), operational execution (cost discipline, customer acquisition, retention metrics), market conditions (regulatory developments, competitive dynamics, ad spend environment), and near-term guidance.
Transcripts not available in dataset.
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Transcripts not available in dataset.
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Forward Guidance
- Explicit forward guidance is not provided in the dataset for QQ1 2025. Given the company’s small scale and OTC listing, Leafbuyer may issue qualitative expectations in future filings or calls. Based on the latest results, the forward-looking view would hinge on: (a) continued revenue growth from the cannabis-deals platform and related advertising/monetization opportunities, (b) cost discipline to sustain or expand EBITDA margins, (c) balance sheet stabilization to address liquidity and leverage, and (d) potential expansion in new state markets as regulations evolve.
Assessment of achievability: With YoY revenue growth of ~38% and gross margins in the mid-40s, there is modest operating leverage available, but current liquidity constraints (C ratio ~0.16) imply that sustaining growth will require prudent financing or capital raises. IfLeafbuyer can convert topline growth into sustained EBITDA expansion and stabilize working capital, a path to cash-flow positive operations could emerge. Investors should monitor: quarterly cash burn/working capital changes, any new financing terms, capex trajectory (currently minimal), and any regulatory/commercial tailwinds in state cannabis programs that could expand ad inventory or lead-generation opportunities.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
LBUY Focus
46.55%
2.02%
-0.70%
43.86%
ALEAF
-21.10%
-78.40%
1.62%
-34.30%
CVSI
0.00%
0.00%
-5.76%
-13.69%
DGTHF
0.00%
0.00%
-37.90%
1.95%
ITHUF
49.50%
-5.27%
-8.64%
1.86%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the QQ1 2025 results, Leafbuyer sits at a crossroads: there is evidence of top-line growth and margin stabilization, but the balance sheet remains a critical overhang. The company has demonstrated the ability to generate operating cash flow and modest EBITDA with improving gross margins, yet liquidity constraints and a sizable debt load limit near-term optionality without external funding. The investment thesis hinges on qualitative catalysts such as successful expansion of its platform into additional markets, monetization improvements (advertising, lead-gen, data services), and any strategic financing arrangements that restore liquidity and reduce cost of capital. In a best-case scenario, continued revenue growth coupled with margin expansion and stabilization of capital structure could unlock incremental value, but investors should be prepared for continued funding needs or dilution if the company cannot self-fund growth. Relative to peers, Leafbuyer’s revenue scale is smaller and profitability is more nascent, and valuation should reflect the higher financial risk embedded in the balance sheet. Key factors to monitor include quarterly liquidity updates, debt repayment or refinancing terms, changes in gross margin, and any announcements around new customer acquisitions or partnerships that could lift cash flows and reduce reliance on external financing.
Key Investment Factors
Growth Potential
Moderate growth potential from expanding Leafbuyer’s cannabis-deals platform across additional markets, with incremental monetization of ad inventory and lead-generation services. The QoQ and YoY revenue gains (Q1 2025: $1.609M; YoY +37.6%) suggest demand stabilization in its niche. Competitive positioning as a specialized content/information platform could benefit from higher traffic and improved monetization if scaling advertising relationships and data offerings.
Profitability Risk
Key risks include a fragile liquidity position (CurrentRatio 0.161; QuickRatio 0.161; Cash Ratio 0.113) and negative stockholders’ equity (-$1.646M) with a net debt of ~$1.104M, which heightens refinancing risk. Sector volatility, regulatory shifts in cannabis advertising, and reliance on limited operating scale heighten sensitivity to operating leverage and financing costs. Potential dependence on third-party advertisers and fluctuating ad budgets could materially impact revenue stability.
Financial Position
The balance sheet shows total assets of $807.5k vs. liabilities of $2.45M, yielding negative equity (~-$1.65M). Long-term debt stands at $412.3k, with short-term debt $923.0k, contributing to a net debt position of $1.10M. While cash on hand ($231.4k) supports short-term liquidity, the company’s leverage and negative equity pose concerns for sustainable financing, covenants, and future capital needs. The company’s operating cash flow ($0.211M) and free cash flow ($0.211M) indicate cash generation, but scale remains a constraint relative to liabilities. A path to stronger financial resilience would involve improving gross margins, controlling SG&A, and reducing reliance on external funding.
SWOT Analysis
Strengths
Niche cannabis-deals content platform with recognizable brand presence in a fragmented market
Positive gross margin (~46.6%) and EBITDA generation in QQ1 2025
Negative stockholders’ equity and a sizable net debt burden
Weak liquidity metrics (Current/Quick/Cash ratios all around 0.16 or lower)
Low absolute revenue scale relative to peers; narrow earnings power
OTC listing with potentially limited access to capital markets and higher financing costs
Opportunities
Potential market expansion as cannabis regulation evolves and more states allow deals/advertising; opportunity to monetize traffic and user leads through higher-value ad products or partnerships
Cross-sell or expand into additional verticals within cannabis information ecosystem (e.g., coupon redemption networks, merchant partnerships)
M&A or strategic partnerships to accelerate scale and reduce per-unit costs
Threats
Regulatory risk and evolving advertising restrictions in cannabis sector
Competition from larger digital cannabis platforms and alternative media channels
Financing risk given leverage and negative equity; potential dilution risk for existing shareholders