Urban-gro, Inc. reported a significant decline in financial performance for the first quarter of 2025, with total revenues of $9.5 million, down approximately 38% from $15.4 million in the same period of 2024. The decrease was primarily driven by a substantial drop in construction design-build revenue, which fell by $6.6 million, reflecting a reduction in contracts. While equipment systems revenue increased by $2.2 million, services revenue decreased by $1.5 million due to ongoing adverse market conditions in the Controlled Environment Agriculture (CEA) sector. The company's gross profit also declined to $610,022, representing about 6% of revenues, compared to $2.99 million, or 19% of revenues, in the prior year.
In terms of operational efficiency, Urban-gro managed to reduce its cost of revenues to $8.9 million, a decrease of 28% from $12.4 million in the previous year. Operating expenses also saw a reduction of approximately 14%, totaling $4.7 million, attributed to lower general and administrative costs and decreased depreciation and amortization expenses. Despite these reductions, the company reported a net loss of $4.03 million for the quarter, compared to a loss of $2.56 million in the same quarter of 2024.
The company’s balance sheet as of March 31, 2025, showed total assets of $16.1 million, down from $19.5 million at the end of 2024. Current liabilities increased slightly to $43.5 million, leading to a negative working capital of $30.1 million, compared to $26.5 million at the end of the previous fiscal year. Urban-gro's cash position also weakened, with cash at $0.7 million, down from $0.8 million at the end of 2024. The company reported net cash provided by operating activities of $2.2 million, primarily due to adjustments for non-cash expenses and changes in operating assets and liabilities.
Strategically, Urban-gro has been focusing on liquidity improvement measures, including reducing headcount and operating expenses. The company is also exploring options for raising additional capital through equity or debt financing. In a significant operational move, Urban-gro completed the sale of its subsidiary, 2WR of Georgia, for $2 million, which is part of its strategy to streamline operations and focus on core business areas. The company is also in discussions regarding a potential merger with Flash Sports & Media, which could reshape its business structure and market positioning.
Looking ahead, Urban-gro's management expressed cautious optimism about regaining compliance with Nasdaq listing requirements and improving financial performance. However, the company continues to face challenges, including market volatility and the need to stabilize its revenue streams. The management's outlook emphasizes a commitment to operational efficiency and strategic growth initiatives to navigate the current economic landscape.
About urban-gro, Inc.
Urban-Gro, Inc. provides integrated design-build services, engineering, and equipment solutions for controlled environment agriculture (CEA) and commercial sectors. Its core offerings include facility design, environmental systems integration, and value-added equipment reselling. Serving clients in cannabis, produce, healthcare, and food industries, the company emphasizes sustainability, innovation, and single-point accountability to optimize operational efficiency and regulatory compliance in indoor cultivation and retail facilities.
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