Helix Technologies Inc (OTCQB:HLIX), which has a suite of technology services and platforms that enable cannabis business owners manage risk, posted third-quarter results after the bell on Friday, that saw its software revenue jump, driven by an increasingly expanded client base.
For the period ended September 30, 2020, the Denver, Colorado-based technology company reported software revenue of $2.8 million, up 18% from 2019. The company noted that software revenue also expanded 6% on a sequential basis “defying market headwinds.”
The company has also grown year-to-date revenue to $8.8 million, up 13% from 2019, while improving gross margin to 68%, compared to the same period in 2019.
“We continue to deliver profitable operations and expand our combined software footprint, which is the largest in the industry, period. Our third consecutive quarter of positive adjusted EBITDA, and improvement in nearly every operational and financial metric, all done without additional capital, demonstrates that our team continues to set the industry standard,” Helix Technologies CEO Zachary L Venegas said in a statement.
“Helix has increased our net client count - delivering one of our strongest quarters ever in client retention and competitor takeaways - while growing third party revenue. I am extremely pleased with the team's hard work and our competitive position heading into 2021,” he added.
Venegas noted that the third quarter was “truly a pivotal quarter” for Helix and in the light of recent events, it was poised to “further expand” on its market position into “existing as well as newly legalized markets.”
During Election Day, voters in New Jersey, Arizona, Montana and South Dakota approved legal adult cannabis sales, pushing US recreational market to 15 total states. The four states now join 11 states that have already decriminalized cannabis since Colorado and Washington broke the seal in 2012. In addition, voters in Mississippi approved medical cannabis use.
The company said it generated software adjusted EBITDA1 of $1 million in the third quarter, an 868% jump from the same quarter in 2019. Overall adjusted EBITDA for the quarter was $950,000, the third straight quarter of positive adjusted EBITDA, despite one-time costs, said the company.
Helix said it completed the divestiture of the security guarding business, creating a “streamlined, pure-play technology value proposition.”
“We continued to strengthen our balance sheet with $1.7 million in cash and a $1 million decrease in liabilities,” added the company.
Helix said it recently launched the first all-electronic medical marijuana patient reciprocity program in New Mexico.
In October, Helix announced a deal to merge with healthcare software company Medical Outcomes Research Analytics LLC (MOR Analytics) to create a new information and technology provider for the healthcare and cannabis sectors. The deal to combine Helix's operating software business and proprietary data assets with MOR's experience in data architecture, technology, and analytics will create the largest integrated US cannabis commercial analytics platform, according to the firm.
Helix products reach over 2,000 customer locations in 36 states and 9 countries and it has processed over $28 billion in cannabis sales.
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