urban-gro, Inc. (Nasdaq: UGRO), provided an update on the success of its design-build division and reiterated its guidance for the third quarter of 2022.
After the acquisition of Emerald Construction Management in the second quarter, urban-gro launched its full turnkey design-build solution where the Company provides a single point of responsibility, and manages architecture, engineering, cultivation design, construction, as well as equipment procurement and integration. Already in Q2, urban-gro announced that their acquisition led to over USD 10M in contracts following the acquisition.
These incremental design-build contracts represent more than USD 50 million of signed projects in the third quarter and are from a diverse set of clients including cannabis CEA clients, as well as leading global consumer packaged goods enterprises. Design-build contracts are typically recognized over a timeline of 6 to 24 months and are separate from any associated professional services or equipment system orders.
Bradley Nattrass, Chairman, and Chief Executive Officer commented on their press release, “Client interest and engagement in our turnkey design-build capabilities have continued to progress as expected, and these new contracts demonstrate tangible value for urban-gro and our clients. While we are reiterating our third quarter guidance, the momentum we have established entering the fourth quarter gives me great confidence that the investments we are making in the business are positioning urban-gro for sustainable and consistent global growth over the long-term.”
Ahead of the third quarter results expected in November, it will be interesting to see if these signed contracts lead to actual transactions as during the previous quarter, Urban-Gro had over USD 20M in backlogs registered which contributed to the poor quarter the company had missing both on Earnings per Share & Revenue estimates.
The news has led its share price to jump 11.27% during trading hours yesterday and increase by 1% in trading after hours.
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