Executive Summary

Q3 2022 revenue declined 30.6% year-over-year to $28.7M and fell 28.2% sequentially, as management intentionally reduced lower-margin third-party sales while pivoting to a consumer “house of brands” model .
Gross margin improved sharply year-over-year to 17.3% (from 3.6%), though GAAP net loss widened due to a $66.8M goodwill and intangible impairment; adjusted EBITDA loss was $11.2M .
Liquidity actions yielded ~$27M toward a $30M non-dilutive target, plus a $7.5M public offering; quarter-end cash including restricted cash rose to $10.2M, supported by a new $15M ABL and asset sales (HQ building, VIBES stake) .
Guidance/tone: the prior target for positive adjusted EBITDA in Q3 2022 was withdrawn in August; leadership now aims to “inflect to profitability” in mid-to-late 2023, citing cost reductions and packaging exit as catalysts .

What Went Well and What Went Wrong

What Went Well

Liquidity progress: “we have brought in over $27 million” of non-dilutive capital (asset sales, monetizing E&O inventory, $15M ABL), plus $7.5M offering; “removed the financing overhang” and positioned for 2023 execution .
Cost actions: September RIF (~~$1.8M annual savings) and Cypress lease exit (~~$0.5M annually); broader SG&A discipline with adjusted SG&A at $15.5M in Q3 .
Strategic pivot: SKU rationalization from ~173 brands to ~25 while retaining ~95% of revenue; pipeline of ~3 dozen new products with margin targets of 25–30% aggregate, and ~40% on owned brands .

What Went Wrong

Revenue compression: Q3 net sales fell to $28.7M, down $12.6M YoY and $11.3M QoQ, reflecting reduced third-party sales and softer consumer demand; Greenlane Brands sales decreased to $3.3M .
Profitability: adjusted EBITDA loss widened to $(11.2)M vs $(6.9)M YoY; GAAP net loss of $(79.2)M driven by the $66.8M impairment, signaling valuation and asset rationalization pressures .
Execution lag: leadership emphasized that many initiatives are “lagging indicators” not yet fully visible in the P&L; MSO enterprise programs and e-commerce buildouts are progressing but remain in rollout phase .

Financial Results

Consolidated performance vs prior periods

Metric	Q1 2022	Q2 2022	Q3 2022
Revenue ($USD Millions)	$46.5	$39.9	$28.7
Gross Margin (%)	12.8%	20.3%	17.3%
Adjusted Gross Margin (%)	25.3% (ex write-offs)	24% (ex write-downs)	21% (ex write-offs)
Net Loss per Share (GAAP)	$(0.17)*	$(2.27)**	$(11.43)
Adjusted EBITDA ($USD Millions)	$(5.28)	$(5.81)	$(11.22)
Cash (includes restricted cash) ($USD Millions)	$5.94	$9.13	$10.19

Notes: *Q1 per-share figures are not indicated as reverse-split adjusted; **Q2 tables are after a 1-for-20 reverse split effective Aug 9, 2022 .

Segment/KPI details

Metric	Q1 2022	Q2 2022	Q3 2022
Greenlane Brands Sales ($USD Millions)	$6.0	$5.1	$3.3
% of Net Sales (Greenlane Brands)	12.8%	12.9%	11.4%
Salaries, Benefits & Payroll Taxes ($USD Millions)	$10.06	$8.84	$7.00
General & Administrative ($USD Millions)	$11.72	$10.59	$8.55 (incl. $2.2M gain on sale)
Inventory ($USD Millions)	$68.53	$60.76	$47.95

Estimate comparisons (S&P Global)

Metric	Q3 2022 Actual	Q3 2022 Consensus	Beat/Miss
Revenue ($USD Millions)	$28.7	Unavailable via S&P Global	N/A
EPS (GAAP) ($USD)	$(11.43)	Unavailable via S&P Global	N/A

Consensus estimates were unavailable from S&P Global at the time of query; therefore beat/miss cannot be determined.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Actual	Change
Adjusted EBITDA profitability timing	Q3 2022	Targeting positive adjusted EBITDA in Q3 2022	Targeting profitability mid-to-late 2023 (aim “midpoint of next year”; “back half of 2023”)	Lowered/Delayed
Adjusted SG&A run-rate	Q3 2022	$16–$18M adjusted SG&A by Q3 (revised higher in Aug)	Q3 Adjusted SG&A $15.55M (reported)	Achieved below revised target
Strategic mix	2022–2023	House of brands focus; reduce lower-margin third-party	Exit packaging business; shed non-accretive top-line; focus on higher-margin consumer revenue	Strategic intensification

Earnings Call Themes & Trends

Topic	Q1 2022 (Previous)	Q2 2022 (Previous)	Q3 2022 (Current)	Trend
Liquidity/Capital Plan	Target >$30M non-dilutive; HQ sale/ABL underway	Secured $15M ABL; sold VIBES ($5.3M); raised $5.4M; reaffirm $30M plan	~$27M achieved; plus $7.5M offering; cash $10.2M	Improving liquidity
Packaging divestiture	N/A	Announced intent to sell packaging; ~$5M+ annual warehouse savings	Plan reiterated; exit to streamline, reduce inventory and costs	Executing
SKU/Brand rationalization	ERP disruptions; shift from third-party to owned brands	Completed comprehensive catalog; discontinued low-margin SKUs	Brands cut from ~173 to ~25; retained ~95% revenue	Completed/Optimizing
E-commerce/Amazon	Building DTC platforms; global marketplaces strategy	Amazon transparency program; global FBA rollout	E-commerce sites revamped; ad spend efficiency targeted	Scaling
MSO enterprise programs	Early efforts; key relationships leveraged	Pursuing master agreements; long cycle	“On the precipice” of rollouts; aim to centralize accessories purchasing	Building
Margins	Aim 25–30% gross margin longer term	Q2 GM 20.3%; 24% ex write-downs	Q3 GM 17.3%; 21% ex write-offs; consumer margins 25–30% target; owned brands ~40%	Mixed (near term)
Macro/regulatory	Inflation/logistics pressures	Credit-tight industry; cautious customer selection	Political tailwinds (Biden pardons; Senate control) may aid sector	Potential tailwind

Management Commentary

“We believe we have removed the financing overhang… which will now allow management to focus on executing our business plan and driving growth in the right area.” – Nick Kovacevich, CEO .
“We are more focused on finding accretive high margin and sustainable revenues… not all revenue is created equal.” – Nick Kovacevich, CEO .
“Gross margin increased to 17%… Revenues decreased… to $28.7 million… cash balance including restricted cash of $10.2 million.” – Darsh Dahya, CAO .
“Our goal is to try to [reach profitability] by the midpoint of next year… systems ~80% complete… accelerating our case of profitability through the second half of next year.” – Craig Snyder, President .
“We have applied for [Amazon] transparency… own the buy box… revamps of Vapor.com and VapoShop.” – Nick Kovacevich, CEO .

Q&A Highlights

SG&A savings and profitability timing: September RIF and lease exits; additional ~$5M+ annual savings expected with packaging sale; aiming for mid-2023 profitability .
Margin outlook: Owned brands targeted at ~40% gross margin; aggregate consumer margins targeted at 25–30% via channel mix and logistics normalization .
Brand rationalization/inventory: Brands reduced ~173→~25 while retaining ~95% of revenue; inventory reduction plan to free working capital through 2023 .
E-commerce strategy: Amazon transparency to control pricing/buy box; DTC sites revamped, ad ROAS focus; global marketplace expansion .
MSO enterprise programs: Centralized accessory purchasing solutions to improve attachment rates and revenue per square foot; rollouts imminent .

Estimates Context

S&P Global consensus revenue and EPS for Q3 2022 were unavailable at the time of query; as a result, beat/miss analysis versus Wall Street estimates cannot be determined from S&P Global. Management did not provide numerical quarterly guidance beyond margin targets and profitability timing .

Key Takeaways for Investors

Near-term revenue will likely compress as Greenlane exits lower-margin third-party and packaging businesses, but this is deliberate to improve margin mix and reduce working capital intensity .
Liquidity risk is reduced: ~$27M achieved from non-dilutive actions plus $7.5M offering; $15M ABL and asset sales support operations while inventory is normalized through 2023 .
Execution focus shifts to consumer house-of-brands, e-commerce, and MSO enterprise programs—areas with structurally higher margins and scalability; watch for product launches and Amazon/DTC traction .
Margin trajectory is improving year-over-year, but GAAP results include large impairment; track adjusted gross margin and adjusted SG&A for underlying progress .
Profitability timeline reset: prior Q3 2022 adjusted EBITDA target withdrawn; management now targets mid-to-late 2023—monitor cost takeout and packaging divestiture milestones .
Stock catalysts: confirmation of packaging sale proceeds, MSO enterprise agreements, Amazon transparency execution, and sustained adjusted SG&A below prior targets could drive sentiment .

Sources: Q3 earnings press release and 8-K (Nov 15, 2022) ; preliminary Q3 8-K (Oct 25, 2022) ; Q3 earnings call transcript (Nov 15, 2022) ; Q2 press release and call (Aug 16, 2022) ; Q1 press release and call (May 17, 2022) .

Greenlane Holdings, Inc. (GNLN)·Q3 2022 Earnings Summary