Executive Summary

Q4 FY2023 revenue was $12.1M (+5% YoY; flat QoQ), while net loss widened to $(44.5)M on heavy non-cash impairments; EPS (to common) was $(2.23) versus $0.06 in Q3 FY2023 and $(6.51) in Q4 FY2022 .
Gross profit was a $(2.6)M loss (vs. +$1.9M in Q3), and Adjusted EBITDA was $(13.0)M (vs. $(12.8)M in Q4 FY2022; $(5.1)M in Q3), reflecting operational strain and asset write-downs .
Liquidity is tight: cash was $2.0M with a $(17.5)M working capital deficit at March 31, 2023; management added liquidity via a $4M high-cost secured note, expanded AR factoring (to $7.5M), and extended Sprout’s $13M secured note maturity .
Management highlighted operational cost actions (production planning changes) targeting ~$2.6M savings for the remainder of calendar 2023; Sprout maintained strong category performance and distribution breadth .
Wall Street consensus estimates via S&P Global were unavailable for NEPT this quarter; investors should anchor on reported results and liquidity trajectory (S&P Global consensus data unavailable).

What Went Well and What Went Wrong

What Went Well
- Sprout brand momentum: maintained a top-3 Amazon position; distribution across all 50 U.S. states and Canada and 90% of organic baby food footprint; category outperformance with +12% sales growth .
- Supply chain/operations: YTD Sprout fill rate improved to 90% (from 73% YoY), and management expects ~$2.6M cost savings for the remainder of calendar 2023 from restructured production planning .
- Biodroga performance: FY2023 revenue of $14.9M with gross margin up to 28% (from 25%), aided by MaxSimil-led growth .
What Went Wrong
- Profitability pressure: Q4 gross profit was a $(2.6)M loss (vs. $(5.7)M prior-year, but down from Q3’s $1.9M profit); Adjusted EBITDA deteriorated to $(13.0)M (vs. $(5.1)M in Q3) .
- Significant non-cash charges: Q4 incurred ~$27.5M of impairment on long‑lived assets (key driver of the $(44.5)M net loss) .
- Liquidity strain: cash of $2.0M, current liabilities of $41.0M, and working capital deficit of $(17.5)M underscore reliance on high-cost financing (16.5% notes, expanded factoring) .

Financial Results

Metric	Q4 FY2022	Q3 FY2023	Q4 FY2023
Revenue ($USD Millions)	$11.5	$12.21	$12.1
Net Income (Loss) ($USD Millions)	$(36.662)	$(0.497)	$(44.513)
EPS (Basic & Diluted, attributable to common) ($)	$(6.51)	$0.06	$(2.23)
Gross Profit (Loss) ($USD Millions)	$(5.7)	$1.88	$(2.6)
Adjusted EBITDA (non‑GAAP) ($USD Millions)	$(12.762)	$(5.1)	$(12.963)

Liquidity and balance sheet (selected):

Metric	Mar 31, 2022	Dec 31, 2022	Mar 31, 2023
Cash & Cash Equivalents ($USD Millions)	$8.726	$3.404	$1.993
Total Current Assets ($USD Millions)	$37.388	$28.222	$23.550
Total Current Liabilities ($USD Millions)	$30.317	$29.855	$41.034
Working Capital ($USD Millions)	$7.071	—	$(17.484)
Loans & Borrowings – Current ($USD Millions)	$—	$—	$7.538
Loans & Borrowings – Non‑Current ($USD Millions)	$11.648	$15.937	$15.413

KPIs and brand/segment indicators:

KPI	Prior Periods	Current Period
Sprout distribution	~28,000 U.S. + 1,350 Canada doors in Q3 FY2023 ; 27,337 doors in Q2 FY2023	Available in all 50 U.S. states and Canada; 90% footprint coverage
Sprout category performance	Outperformed category; +19% YoY revenue in Q2 FY2023	+12% sales growth vs total shelf-stable baby food category
Sprout fill rate	85% in Q3 FY2023	90% YTD (vs 73% prior-year)
Amazon rank	—	Top-3 brand position in FY2023
Biodroga revenue & margin	—	FY2023 revenue $14.9M; GM 28% (vs 25% prior year)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Production planning cost savings	Remainder of calendar 2023	—	~$2.6M expected savings	New
AR factoring facility (Sprout)	Current	$5.0M facility (Jan 24, 2023)	Up to $7.5M in place	Raised
Secured note financing	Q4 FY2023	—	$4.0M senior secured notes at 16.5% (initially PIK), due Jan 12, 2024	New
Sprout secured promissory note	Current	$13M note outstanding	Maturity extended	Maintained/Extended
Dividends	—	—	None announced	—

Earnings Call Themes & Trends

Note: No Q4 FY2023 earnings call transcript was available in our corpus; themes below rely on press releases.

Topic	Previous Mentions (Q2 FY2023 and Q3 FY2023)	Current Period (Q4 FY2023)	Trend
Supply chain & fill rate	Q3: fill rate 85%	YTD fill rate 90%; $2.6M savings expected from restructured production planning	Improving execution; targeted cost-out
Liquidity & financing	Q2: expanded Sprout secured notes to max $37.5M ; Q3: AR factoring facility up to $5M	$4M secured notes (16.5%); AR factoring expanded to $7.5M; extended $13M Sprout note maturity	Added high-cost liquidity; runway extended
Portfolio focus	Q2: cannabis asset sale completed Nov 9, 2022	Emphasis on CPG brands (Sprout, Biodroga)	Focused CPG strategy maintained
Cost structure	Q3: SG&A down $9.7M YoY	Additional savings targeted via production planning	Continued cost discipline
Brand & category	Q2/Q3: Sprout distribution expansion, outperformance	Sprout top-3 Amazon; +12% category outperformance	Sustained brand strength

Management Commentary

CEO Michael Cammarata: “Neptune Wellness Solutions has made significant strides in fiscal 2023... With Sprout's expansion into the Organic Baby Food market across all 50 U.S. states and Canada... we acknowledge there's more work to be done... we remain dedicated to further optimizing our operations and improving our financial position... We recognize there are risks ahead, but we are confident that the platform we are building is the right move for our future.”
CFO Raymond P. Silcock: “Neptune is focused on further reducing corporate costs, managing expenses and improving its liquidity position into fiscal 2024. We are focused on further optimizing the supply chain for Sprout, and we have restructured production planning with $2.6 million in cost savings for the remainder of fiscal 2023 expected.”

Q&A Highlights

No Q4 FY2023 earnings call transcript was available in our dataset; Q&A themes and any clarifications cannot be corroborated for this quarter (we searched for July–August 2023 NEPT transcripts and found none).

Estimates Context

Wall Street consensus (S&P Global Capital IQ) for NEPT’s Q4 FY2023 revenue and EPS was unavailable due to missing SPGI mapping for the ticker at the time of query; as a result, beat/miss vs. estimates cannot be assessed from S&P Global for this quarter (S&P Global consensus data unavailable).
Implication: In the absence of consensus anchors, investors should focus on sequential/YoY trends, cash/liquidity developments, and non-cash charges’ impact on GAAP losses.

Key Takeaways for Investors

Revenue base stable (~$12M), but Q4 swung back to gross loss and deeper GAAP loss due to ~$27.5M in impairments; Adjusted EBITDA deterioration versus Q3 underscores near-term profitability risk .
Liquidity is the central risk: $2.0M cash, $(17.5)M working capital deficit, and reliance on 16.5% secured notes and factoring; watch cash burn, covenant headroom, and refinancing/dilution risk .
Offsetting positives: Sprout’s distribution depth, category outperformance, and rising fill rates suggest brand health and potential revenue durability; Biodroga’s margin uplift provides incremental cushion .
Execution priorities: realize the ~$2.6M production planning savings, sustain supply chain performance, and convert factoring/receivables to cash without excessive leakage from fees .
Monitoring list: cash trajectory, Adjusted EBITDA progression, non-cash charges normalizing, and any additional financing actions (equity or debt) through FY2024 .
With no reliable Street estimates, price action is likely to key on liquidity headlines and operational milestones rather than consensus beats/misses (S&P Global consensus data unavailable).

Sources: NEPT Q4 FY2023 8‑K and press release; Q3 and Q2 FY2023 earnings releases; financing and AR factoring 8‑Ks .

Neptune Wellness Solutions Inc. (NEPT)·Q4 2023 Earnings Summary