N/A:TLLTF
TILT Holdings Inc.
A high-risk growth stock in the tech services space facing significant profitability challenges despite recent revenue contraction.
Key Metrics
Investment Thesis
Bull Case
If the market downturn was temporary, the company could rebound with its established client base once demand recovers; potential strategic acquisitions or pivots could reset the valuation multiple if turnaround metrics are met soon.
Bear Case
The company is losing money at an accelerating rate while shrinking revenues and holding negative shareholder equity of $37.2M, making a return on capital highly unlikely without major restructuring; investors should avoid this stock given the high probability of further dilution or insolvency.
About TILT Holdings Inc.
TILT Holdings Inc. operates within the technology services sector, delivering specialized digital solutions to global markets through its proprietary software platforms and data analytics capabilities.
Analysis
Management Discussion
The company reported a significant contraction in revenue from $174.2M in 2022 down to $115.6M in 2024, while net losses worsened to nearly $100M. Cash flow from operations turned negative at -$189K, and the company is burning cash with a retained earnings deficit exceeding $1.1B.
Industry Overview
The technology services industry is currently undergoing a correction with many players struggling to maintain growth in a cost-conscious macro environment characterized by slowing enterprise IT spending.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $174.2M | $166.0M | $115.6M |
| Cost of Revenue | $136.0M | $141.6M | $95.6M |
| Gross Profit | $38.2M | $24.4M | $20.1M |
| Operating Expenses | $129.0M | $67.5M | $89.5M |
| Operating Income | $-90.9M | $-43.2M | $-69.4M |
| G&A | $20.7M | $17.7M | $12.6M |
| Marketing | $2.5M | $1.2M | $593.0K |
| Stock-Based Comp | $3.3M | $-1.7M | $83.0K |
| D&A | $23.9M | $21.6M | $19.3M |
| Depreciation | $8.2M | $7.7M | $5.5M |
| Amortization | $14.7M | $13.0M | $13.0M |
| Other OpEx | $105.9M | $48.7M | $76.3M |
| Non-Operating Income | $-13.6M | $-24.0M | $-25.5M |
| Interest Expense | $14.2M | $21.0M | — |
| Interest Income | $67.0K | — | — |
| Pre-Tax Income | $-104.5M | $-67.2M | $-94.9M |
| Income Tax | $3.0M | $-3.3M | $4.7M |
| Continuing Ops | $-107.5M | $-63.8M | $-99.7M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-107.5M | $-63.8M | $-99.7M |
| Minority Interest | $-9.0K | $-1.4M | $0 |
| Net to Common | $-107.5M | $-62.4M | $-99.7M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $85.9M | $56.3M | $40.8M |
| Inventory | $52.9M | $32.9M | $22.5M |
| Prepaid Expenses | $2.0M | $2.1M | $2.1M |
| Other Current Assets | $31.0M | $21.3M | $16.2M |
| Long-Term Assets | $208.1M | $174.9M | $110.5M |
| PP&E (Net) | $67.9M | $51.2M | $30.7M |
| Intangibles | $102.7M | $84.8M | $44.5M |
| Goodwill | $20.8M | $17.7M | $17.7M |
| Operating Leases | $740.0K | $12.3M | $11.9M |
| LT Investments | $6.4M | $1.0K | — |
| Other LT Assets | $3.1M | $8.9M | $5.5M |
| Total Assets | $294.0M | $231.2M | $151.3M |
| Current Liabilities | $130.2M | $76.1M | $87.5M |
| Accounts Payable | $49.3M | $46.3M | $50.3M |
| Current Leases | $135.0K | $72.0K | $120.0K |
| Deferred Revenue | $5.8M | $6.1M | $3.1M |
| Taxes Payable | $979.0K | $2.6M | $2.8M |
| Other Current Liab | $74.1M | $21.0M | $31.1M |
| Long-Term Liabilities | $42.2M | $92.7M | $101.1M |
| LT Operating Leases | $701.0K | $12.7M | $12.7M |
| Other LT Liab | $41.5M | $80.0M | $88.4M |
| Total Liabilities | $172.5M | $168.8M | $188.5M |
| Shareholders' Equity | $121.5M | $62.4M | $-37.2M |
| Retained Earnings | $-963.7M | $-1.03B | $-1.13B |
| AOCI | $988.0K | $973.0K | $964.0K |
| Total L&E | $294.0M | $231.2M | $151.3M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-107.5M | $-63.8M | $-99.7M |
| Non-Cash Adjustments | $113.7M | $89.0M | $113.2M |
| Working Capital Changes | $2.4M | $-19.9M | $-13.7M |
| Cash from Operations | $8.6M | $5.4M | $-189.0K |
| Capital Expenditures | $15.1M | $713.0K | $892.0K |
| Cash from Investing | $-16.8M | $13.2M | $-742.0K |
| Cash from Financing | $4.8M | $-18.7M | $1.9M |
| FX Effect | $-10.0K | $-14.0K | $-11.0K |
| Net Change in Cash | $-3.5M | $-168.0K | $971.0K |
| Beginning Cash | $7.0M | $3.5M | $3.3M |
| Ending Cash | $3.5M | $3.3M | $4.3M |
Frequently Asked Questions
How does TILT Holdings Inc. make money?
Core revenue streams likely include subscription-based SaaS licensing, professional service fees for implementation, and potentially hardware or cloud infrastructure sales given the capital expenditure profile.
What are the main risks for TLLTF?
Severe and worsening net losses indicating fundamental business model sustainability issues; heavy reliance on debt financing evidenced by revolver activity and negative equity position; inability to grow revenue over the past three consecutive years suggests market share erosion or demand decline.
What is TLLTF's competitive advantage?
Specialized proprietary technology stacks that create high switching costs for enterprise clients; a scalable digital delivery model with low marginal costs once developed; deep domain expertise in niche verticals allowing premium pricing power.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.