Agrify reported a net loss per share of USD 0.28 in Q2 2021, below analyst estimates (loss of USD 0.21 per share) but better than the net loss per share of USD 0.60 recorded in Q2 2020. However, the top-line grew by nearly 203% year-over-year (YoY) to reach USD 11.8 million in Q2 2021.

The growth in top-line performance was driven by the company’s “Facility build-outs” segment (91% of revenue, construction of vertical farming facilities) which saw revenue grow nearly 25x YoY during Q2 2021. This increase was mainly due to the company’s successful expansion in partnerships with existing customers and the launch of its Total Turn-Key (TTK) solution customer partnerships during the period.

During 2Q, the company signed its first TTK solution partnership with Bud & Mary’s Cultivation Inc. to install up to 1,200 of Agrify’s Vertical Farming Units (AFVUs), estimating to generate more than USD 28 million in revenue annually (more than twice the company’s FY2020 revenue). The company has also signed its second Agrify TTK Solution partnership with True House Cannabis LLC and expects a total revenue opportunity of around USD 45.3 million over the next 10 years. In addition, the company has recorded an increase in total new bookings during the period amounting to USD 30.7 million, the highest quarterly total bookings recorded to date.

On the other hand, Agrify saw its gross profit margin (GPM) see a steep drop to 4.5% in Q2 2021 compared to 26.0% in Q2 2020. The company attributes the decline to an increase in employee-related expenses (28.9% of revenue) and a change in its revenue mix. The high-growth facility build-outs segment delivers a lower GPM (4.9% in Q2 2021) compared to sales of AVFUs (29.2% GPM and almost 90% of revenue during Q2 2020). As a result, operating losses for the quarter amounted to USD 5.4 million, up 122.6% YoY, with higher selling and administrative expenses (up nearly 91% YoY) further contributing to the decline.

Given the expansion in partnerships, the company expects to surpass its revenue target for FY2021; however, leaves its revenue guidance unchanged for FY2021, in the USD 48-50 million range.