Clever Leaves Holdings Inc. (CLVR)·Q1 2023 Earnings Summary

Executive Summary

• Q1 2023 revenue was $3.98M, down 21% YoY and 14% QoQ; gross margin improved sharply to 56.2% vs 15.3% in Q4 2022, driven by lower inventory provisions and improved non‑cannabinoid margins .
• Net loss narrowed to $4.08M (EPS −$0.09) from $16.14M (EPS −$0.58) in Q1 2022 as operating expenses fell 48% YoY; adjusted EBITDA loss improved to $(3.0)M vs $(4.7)M YoY .
• Guidance reiterated: FY23 revenue $19–$22M, adjusted gross margin 58–63%, adjusted EBITDA $(13.6)M to $(10.6)M, CapEx $0.5–$0.7M; management highlighted Colombia-only production and early flower shipments to Australia and Germany as catalysts .
• Liquidity remains the key risk: cash fell to $6.69M; management disclosed substantial doubt about going concern and potential need to raise capital/monetize assets, though cash burn is expected to decline in Q2 .
• S&P Global Wall Street consensus estimates for CLVR were unavailable; comparison to Street for Q1 2023 could not be made (consensus data not mapped; see Estimates Context).

What Went Well and What Went Wrong

What Went Well

• Margin expansion despite lower sales: gross margin rose to 56.2% (adjusted 59.2%) on lower inventory provisions and improved non‑cannabinoid margins; CFO: “lower inventory provision… and the improved margin performance of our non‑cannabinoid business… drove our gross margin improvements” .
• Strategic progress in core markets: first commercial Colombian flower shipments completed to Australia and Germany; CEO: “We have already sent our first commercial shipments… to both Australia and Germany… a key operational milestone” .
• Opex discipline: operating expenses fell to $6.4M from $12.3M YoY as restructuring benefits flowed through; CEO: “approximately 48% year‑over‑year decrease in our operating expenses” .

What Went Wrong

• Top‑line pressure: revenue declined to $3.98M (vs $5.04M in Q1 2022) due to absence of prior-year Brazil pipeline shipments and marketplace adjustments in U.S. specialty channels .
• Elevated unit costs from reduced harvest: all‑in cost per gram rose to $1.29 (vs $0.12 YoY) as harvests were rightsized and processing costs persisted, pressuring cannabinoid segment profitability .
• Liquidity/going concern risk: cash fell to $6.69M (from $12.89M at YE22), and management stated substantial doubt about ability to continue as a going concern without additional funding .

Financial Results

Note: Q1 2023 press release rounded revenue to $4.0M; 10‑Q reports $3.978M .

Segment revenue breakdown:

Geographic revenue (Q1 2023):

KPIs and liquidity:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO on margin/Opex discipline: “we drove an approximately 48% year-over-year decrease in our operating expenses… net loss was reduced by nearly 75% and adjusted EBITDA loss was reduced by 35% as we continued to progress on our path to cash flow positivity” .
• CEO on shipments and product development: “We have already sent our first commercial shipments… to both Australia and Germany… we continue to focus on growing the most premium and commercially viable strains” .
• CFO on gross margin drivers: “lower inventory provision… and the improved margin performance of our non‑cannabinoid business… drove our gross margin improvements for the quarter” .
• CEO on Brazil positioning: “Being GMP certified in Brazil is a major milestone… and it complements the GMP certifications we have already received in the EU and Colombia” .
• CFO on guidance and liquidity: “we remain comfortable with our previously stated full year 2023 financial targets… there is substantial doubt about our ability to continue as a going concern… ability to obtain additional funding” .

Q&A Highlights

• Market prioritization: Tier‑one growth in Brazil and Australia with Germany ramping via ICANNA; UK shipments expected; Israel flower later in the year .
• Brazil state‑level catalysts: São Paulo program expected to facilitate access/reimbursement; CLVR’s RDC 327-registered products and strong partners (GreenCare, Hypera) position it for tenders .
• Liquidity concerns and ordering dynamics: Management does not see capital raise concerns constraining orders; regulatory/commercial timing are main constraints; certifications (ANVISA, EU‑GMP) opening volumes .

Estimates Context

• S&P Global consensus estimates for CLVR (revenue and EPS) for Q1 2023, Q4 2022, and Q3 2022 were unavailable due to missing Capital IQ mapping; as a result, we cannot assess beats/misses versus Street for this quarter. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

• Margin inflection against lower revenue is notable; sustained adjusted gross margin near the guided 58–63% range would support the path to improved EBITDA, but volume growth in cannabinoid markets is required .
• Brazil and Australia are the near‑term revenue catalysts; ANVISA GMP and the Hypera agreement de‑risk Brazilian scale, while initial Colombian flower shipments to Australia/Germany validate the supply chain .
• Liquidity risk is central: cash at $6.69M and going‑concern language suggest near‑term capital actions (ATM usage, asset sales) are likely; monitor disclosures on Portuguese asset dispositions and financing .
• Unit costs should normalize as harvests scale; management expects all‑in cost per gram to revert toward historical levels with Colombia‑only production, aiding cannabinoid segment margins .
• Non‑cannabinoid stability matters: margin improvement in Herbal Brands aided consolidated gross margin; watch marketplace and specialty channel dynamics for continued recovery .
• Regulatory watchlist: Germany’s phased recreational plan, Brazil state programs, and Colombia’s domestic developments could expand addressable markets and pricing/mix opportunities .
• Tactical trading: headlines on asset sale progress, incremental flower shipment approvals, and Brazil tenders could be stock catalysts; liquidity events (equity raises) may weigh in the near term .