Urban-gro Reports 70% Revenue Decline and $4.84 Million Net Loss in Q3 2025

Urban-gro, Inc. reported significant declines in its financial performance for the third quarter of 2025, as detailed in its latest 10-Q filing. The company generated total revenues of $2.38 million for the three months ended September 30, 2025, a decrease of approximately 70% compared to $7.98 million in the same period of 2024. For the nine months ended September 30, 2025, revenues were $16.92 million, down 53% from $35.83 million in the prior year. The decline was attributed primarily to reduced revenues from both equipment systems and construction design-build services, which fell by $2.85 million and $2.7 million, respectively.

The company's cost of revenues also decreased, totaling $2.56 million for the third quarter of 2025, down from $7.28 million a year earlier. However, Urban-gro reported a gross loss of $171,751 for the quarter, contrasting with a gross profit of $694,753 in the previous year. Operating expenses were reduced to $2.06 million, a 47% decrease from $3.9 million in the prior year, largely due to lower general and administrative costs. Despite these reductions, Urban-gro recorded a net loss of $4.84 million for the quarter, compared to a loss of $3.76 million in the same period of 2024.

In terms of operational developments, Urban-gro has undergone significant organizational changes, including the discontinuation of certain service operations. On August 27, 2025, the company sold its architectural and construction administration services business to 2WR Holdco, LLC for $2 million, which has allowed Urban-gro to focus on its core Controlled Environment Agriculture (CEA) business. The company has also been actively managing its liquidity, reporting negative working capital of $39.7 million as of September 30, 2025, an increase from $26.5 million at the end of 2024.

Looking ahead, Urban-gro's management has indicated a commitment to improving its financial position and operational efficiency. The company is exploring options to raise capital, including potential equity offerings and additional debt financing. Furthermore, Urban-gro is in the process of implementing a remediation plan to address material weaknesses in its internal controls, which were identified in previous evaluations. The company aims to regain compliance with Nasdaq listing requirements and improve its overall financial health in the coming months.