RYTHM, Inc. Q4 FY2021 earnings call

• In 2021, Agrify drove explosive year-over-year growth, with annual revenue growing from $12.1 million in 2020 to $59.9 million in 2021. Q4 2021 revenue was $25.3 million, a 481% increase year-over-year.
• Generated over $377 million in new bookings in 2021, a 919% increase from 2020, and has a qualified pipeline of over $570 million.
• The TTK program forges long-term partnerships with customers, addressing industry pain points, and expects to start high-margin recurring SaaS and production fees in Q3 2022.
• The extraction division expanded by acquiring 4 leading brands to become a leader in cannabis extraction, with expectations of accretive revenue in 2022.

In the fourth quarter of 2021, revenue was $25.3 million, a 481% year-over-year increase compared to $4.4 million in Q4 2020. For the full year 2021, revenue totaled $59.9 million, up 395% year-over-year from $12.1 million in 2020. The Total Turn-Key Solutions (TTK) program has secured 6 customers and has 3,729 Vertical Farming Units (VFUs) under contract, with expectations to generate $76 million of high-margin recurring revenue annually once all VFUs are commissioned. The extraction division, having acquired 4 top brands, expects to be accretive in 2022 with $62 million to $65 million in annual revenue and a profit margin of 30% or greater.

• Q1 2022 revenue is expected to be $25.5 million, a ~264% increase from Q1 2021.
• Full year 2022 revenue is expected to be $140 million to $142 million, a ~134% increase from 2021.
• Second half of 2022 is anticipated to have a revenue mix with more high-margin extraction, SaaS, and production success fees.

• Shipments of VFUs in Illinois delayed due to social equity legal lawsuits.
• Massachusetts regulator's slow approval process could impact Bud & Mary's completion and revenue timing.
• Fluctuations in cannabis market demand and regulatory changes could affect business performance.

Q: Aaron Grey asked about the 1Q revenue guide and seasonality.

A: There is slight seasonality in the extraction side, but large VFU bookings in Illinois were delayed by legal issues, with business expected to pick up in Q2.

Q: Eric Des Lauriers inquired about Bud & Mary's and recurring revenue.

A: Recurring revenue in Q3 is not from Bud & Mary's but from legacy customers, and Bud & Mary's is on schedule for Q4 completion with production in Q1 2023.

Q: Scott Fortune asked about VFUs and pipeline.

A: There are 3,729 VFUs under contract, with ~400 from legacy customers and others from Bud & Mary's and other programs.

Q: Anthony Vendetti asked about Bud N' Mary's Phase 2 and TTK recurring revenue.

A: There's an LOI with Frozen 4 for Phase 2 expansion including extraction, and TTK recurring revenues are expected to start in Q3 2022.

Q: Gerald Pascarelli asked about gross margin and capital allocation.

A: Q4 gross margin was high due to extraction equipment sales and old VFU sales, and capital allocation is focused on TTK projects with no immediate M&A in extraction.