Leafly Holdings Reports 13% Revenue Decline and Net Loss Improvement in Q1 2025

Leafly Holdings, Inc. reported a decline in financial performance for the first quarter of 2025, with total revenue of $7.88 million, down 13% from $9.05 million in the same period of 2024. The company experienced a net loss of $1.78 million, an improvement from the $2.39 million loss reported a year earlier. This reduction in losses was attributed to cost-cutting measures implemented in 2024, which resulted in lower operating expenses of $8.32 million, down 15% from $9.82 million in the prior year.

The company’s operational metrics reflected a decrease in customer engagement, with ending retail accounts falling by 12% year-over-year to 3,362. This decline was primarily due to budget constraints faced by customers and the removal of non-paying accounts from the platform. Despite the drop in customer counts, the average revenue per account (ARPA) increased slightly to $684, up from $677 in the previous year, indicating a shift towards higher-value accounts.

In terms of strategic developments, Leafly is navigating significant challenges following its delisting from the Nasdaq in January 2025, which has led to its common stock trading on the OTC Pink Open Market. The company is considering a reverse stock split to reduce the number of record holders and potentially suspend its ongoing reporting obligations. Additionally, Leafly has filed amendments to its registration statements to remove unsold securities, a move aimed at reducing operational costs associated with being a public company.

As of March 31, 2025, Leafly's total assets were reported at $14.01 million, a decrease from $19.64 million at the end of 2024. The company’s liabilities also decreased to $30.69 million from $34.75 million, primarily due to the partial repayment of convertible promissory notes. However, the company faces substantial doubt regarding its ability to continue as a going concern, as it does not currently have the liquidity to repay $25.75 million in convertible notes due in July 2025. Management is actively exploring options for capital infusion or refinancing to address these obligations.

Looking ahead, Leafly's management remains cautious, emphasizing the need for strategic decisions to stabilize the business. The company is focused on reducing operating expenses while ensuring the viability of its operations. However, the ongoing challenges in the cannabis market, including regulatory complexities and economic conditions, may impact future performance and growth prospects.