LAFAYETTE, CO - urban-gro, Inc. (NASDAQ:UGRO), a professional services and Design-Build firm serving the Controlled Environment Agriculture (CEA) and commercial sectors, has announced the signing of multiple contracts in the cannabis industry. These agreements, with over fifteen clients, are expected to generate approximately $12 million in revenue. The company anticipates recognizing the majority of this revenue by the end of the first quarter of 2025.
The contracts encompass a range of services, including equipment procurement and engineering, architecture, and design for various projects such as cultivation, extraction, and retail dispensaries across the United States. Bradley Nattrass, Chairman and CEO of urban-gro, expressed optimism about the company's growth in the cannabis sector, attributing the momentum to the potential positive outcome of Florida's Amendment 3 ballot initiative and the issuance of licenses in new markets.
Despite recent challenges in the cannabis industry, Nattrass highlighted the strategic decision to retain the entire cannabis business unit team, positioning the company to capitalize on emerging opportunities. He also voiced support for the Smart and Safe Florida campaign and encouraged Florida residents to vote in favor of the amendment on November 5th.
urban-gro is known for providing architectural, engineering, and construction management solutions not only to the CEA market but also to industrial, healthcare, and other commercial sectors. With a footprint across North America and Europe, the firm emphasizes innovation, collaboration, and creativity to deliver customer-centric experiences.
This announcement is based on a press release statement and comes amid a landscape of regulatory changes and market dynamics in the cannabis industry. The company's forward-looking statements are subject to various risks and uncertainties, including the ability to deliver services on time, revenue forecasting accuracy, and potential regulatory or legislative delays. Investors and stakeholders are reminded that these statements are based on current expectations and that actual results could differ materially from those projected.
In other recent news, urban-gro, a professional services and Design-Build firm, has been making significant strides in its operations. The company's revenue has been bolstered by several notable projects, including the architectural design for the new Union City Fire Station in Georgia and the construction of a new establishment for Brazilian restaurant chain Fogo de Chão in Texas. Both projects are expected to contribute significantly to the company's revenue by the first quarter of 2025.
urban-gro has also been awarded contracts to renovate the Davidson Student Center at Columbus State University and build a new P.F. Chang's restaurant location in Colorado. The company has also secured contracts in the cannabis sector valued at approximately $12 million for various cultivation and retail dispensary projects, with most revenue expected by the end of the third quarter of 2024.
In terms of financial performance, urban-gro exceeded its first quarter 2024 revenue guidance by $15.5 million and maintains its full-year revenue guidance of over $84 million. As part of its corporate governance, the company has expanded its stock incentive plan by an additional 1.2 million shares and appointed Sadler, Gibb & Associates LLC as its new independent registered public accounting firm. These are the latest developments in urban-gro's business operations.
InvestingPro Insights
urban-gro's recent contract signings in the cannabis industry, valued at approximately $12 million, come at a crucial time for the company. According to InvestingPro data, urban-gro's revenue for the last twelve months as of Q1 2024 stood at $70.32 million, with a revenue growth of 12.08% over the same period. This new influx of contracts could significantly boost the company's top line, potentially accelerating its growth trajectory.
However, investors should approach this news with cautious optimism. InvestingPro Tips highlight that urban-gro is "quickly burning through cash" and "suffers from weak gross profit margins." The company's gross profit margin for the last twelve months as of Q1 2024 was 15.03%, which may explain the pressure on profitability. Additionally, the company is not profitable over the last twelve months, with a negative operating income of $13.69 million for the same period.
The stock's performance has been volatile, with InvestingPro data showing a 28.8% decline in the six-month price total return as of the latest data. This volatility aligns with an InvestingPro Tip indicating that "stock price movements are quite volatile." Despite these challenges, the recent contracts could potentially improve urban-gro's financial position and market sentiment.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights, with 7 more tips available for urban-gro. These tips could provide valuable context for understanding the company's prospects in light of the recent contract announcements.
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