• Net Income: Increased 147% year-over-year to $354,000 compared to a net loss of $748,000 in the prior year period.
• Revenue: $3.5 million for Q3 2024, down 19.6% from $4.3 million in Q3 2023.
• Loan Interest Income: Grew 48% year-over-year to $1.3 million for Q3 2024.
• Operating Expenses: Decreased by 13% year-over-year to $3.3 million for Q3 2024.
• Adjusted EBITDA: $764,000 for Q3 2024, compared to $1.05 million in Q3 2023.
• Cash and Cash Equivalents: $5.9 million as of September 30, 2024, up from $4.9 million at December 31, 2023.
• Full Year Revenue Guidance: Expected to be in the range of $15 million to $15.5 million for 2024.

• Warning! GuruFocus has detected 1 Warning Sign with PGNY.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Net income increased by 147% year-over-year to $354,000, compared to a net loss of $748,000 in the previous year.
• Loan interest income grew significantly by 48% in the third quarter and 143.5% for the nine months year-over-year.
• Operating expenses decreased by 13% in the third quarter and 66% for the nine months year-over-year.
• The company originated a new $1.07 million secured credit facility for a Missouri-based cannabis operator, showcasing strategic growth.
• Partnership with BIPOCann to support minority-owned businesses in the cannabis sector, enhancing social equity initiatives.

Negative Points

• Revenue for the third quarter decreased by 19.6% year-over-year to $3.5 million.
• Revenue from deposit activity and onboarding fell by 26% in the third quarter compared to the prior year.
• Investment income decreased by approximately 60% in the third quarter year-over-year.
• The company reported a net working capital deficit of $2.5 million as of September 30, 2024.
• Challenging market conditions for cannabis-related businesses negatively impacted fee, loan, and investment income.

Q & A Highlights

Q: Can you provide an overview of the financial performance for the third quarter of 2024? A: Sundie Seefried, CEO, reported that SHF Holdings Inc saw a significant increase in net income, which rose 147% year-over-year to $354,000, compared to a net loss of $748,000 in the previous year. Loan interest income also increased by 48% year-over-year. However, revenue declined due to challenging market conditions in the cannabis sector.

Q: What were the main challenges faced by SHF Holdings in the cannabis market during the quarter? A: Sundie Seefried, CEO, noted that the cannabis sector experienced headwinds such as pricing pressures, excess supply, and increased competition due to new state legalizations. These factors led to flat or slightly decreased sales, impacting SHF Holdings' revenue.

Q: How is SHF Holdings addressing the challenges in the cannabis market? A: Sundie Seefried, CEO, mentioned that SHF Holdings is focusing on competitive pricing strategies, such as adjusting fees and offering internal programs to offset costs. The company is also expanding its credit portfolio and exploring new markets to support early licensees.

Q: What strategic initiatives is SHF Holdings pursuing to support minority-owned businesses in the cannabis industry? A: Sundie Seefried, CEO, highlighted a partnership with BIPOCann, a consulting firm aiding social equity and minority entrepreneurs. This partnership provides membership benefits and discounts on financial services application fees to support minority-owned businesses.

Q: What are the expectations for the cannabis market and SHF Holdings' positioning in the future? A: Sundie Seefried, CEO, expressed optimism about the cannabis market's growth, with expectations of reaching $33.6 billion by 2024. SHF Holdings aims to capitalize on this growth by expanding its customer base, enhancing service offerings, and adapting to regulatory changes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.