urban-gro, Inc. Signs $6 Million LED Lighting Equipment Contract

Rhea-AI Summary

urban-gro (Nasdaq:UGRO) has secured a significant $6 million LED lighting equipment contract with a leading northern-based North American Cannabis Operator. The company, which specializes in Controlled Environment Agriculture (CEA) and commercial sector solutions, expects to recognize the revenue from this deal in the first half of 2025.

The lighting upgrade project aims to enhance efficiency and crop yields, contributing to more consistent, reliable, and high-quality harvests. Chairman and CEO Bradley Nattrass highlighted the company's strong client relationships and high rate of repeat business in the CEA sector.

Positive

• $6M new contract secured for LED lighting equipment
• Revenue recognition expected in H1 2025
• Repeat business from existing client indicating strong customer retention

Negative

• None.

Insights

Financial Analyst

urban-gro Signs $6M Equipment Deal: A Material Revenue Catalyst for a Struggling Micro-Cap

urban-gro's newly announced $6 million LED lighting contract represents a potentially transformative development for this micro-cap company. With a market capitalization of just $9.1 million, this single contract is equivalent to approximately 65.8% of the company's entire market value, making it extraordinarily material to UGRO's financial outlook.

The contract's timing is particularly significant, with revenue recognition expected in H1 2025. This provides important near-term financial visibility for a company whose stock has likely experienced significant pressure, as evidenced by its sub-dollar share price.

This deal reveals several important insights about urban-gro's business position. First, it demonstrates the company has maintained valuable client relationships despite what appears to be challenging financial circumstances. The repeat business nature of this contract suggests urban-gro retains competitive advantages in the CEA space that transcend its current market valuation.

From an industry perspective, the focus on lighting upgrades aligns with the cannabis sector's evolution toward operational efficiency. As cannabis operators face margin compression in maturing markets, investments in yield-enhancing and energy-efficient technologies have become critical competitive differentiators.

However, investors should note several important considerations. Equipment sales typically carry lower margins than design and professional services, which may limit the bottom-line impact despite the impressive top-line figure. Additionally, urban-gro's heavy exposure to the cannabis industry creates concentration risk, as regulatory or market disruptions could impact client spending patterns.

The contract's size relative to urban-gro's market cap suggests either the market has severely undervalued the company's ongoing business or that this win represents a potential inflection point following a period of significant challenges. Upcoming quarterly results will be important to determine whether this contract signals the beginning of a sustainable recovery or merely provides temporary financial relief.

LAFAYETTE, COLORADO / ACCESS Newswire / February 25, 2025 / urban-gro, Inc. (Nasdaq:UGRO) ("urban-gro" or the "Company"), an integrated professional services and Design-Build firm offering solutions to the Controlled Environment Agriculture ("CEA") and commercial sectors, today announced the signing of an LED lighting equipment contract with a leading northern-based North American Cannabis Operator. Valued at approximately $6 million, the Company expects to recognize the deal's revenue in the first half of 2025.

"We are grateful to continue working with this progressive client," said Bradley Nattrass, Chairman and CEO of urban-gro. "This lighting upgrade will help boost efficiency and crop yields, further delivering more consistent, reliable, and high-quality harvests. The high rate of repeat business we experience is a real testament to the trust that our team has built with our CEA clients over the years."

About urban-gro, Inc.

urban-gro, Inc.® (Nasdaq: UGRO) is an integrated professional services and Design-Build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture ("CEA"), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and creativity drive our team to provide exceptional customer experiences. With offices across North America and in Europe, we deliver Your Vision - Built. Learn more by visiting www.urban-gro.com.

Safe Harbor Statement

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this release, terms such as "believes," "will," "expects," "anticipates," "may," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The forward-looking statements in this press release include, without limitation, the expected magnitude and timing of revenue and profit to be recognized from the equipment sale described herein. These and other forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including, among others, our ability to accurately forecast revenues and costs, our ability to predict and respond to new laws and governmental regulatory actions, including delays granting licenses to clients or potential clients and delays in passage of legislation expected to benefit our clients or potential clients, risks related to adverse weather conditions, supply chain issues, rising interest rates, economic downturn or other factors that could cause delays or the cancellation of projects in our backlog or our ability to secure future projects, our ability to maintain favorable relationships with suppliers, risks associated with reliance on key customers and suppliers, our ability to attract and retain key personnel, and risks related to our information technology systems and infrastructure. A more detailed description of these and certain other factors that could affect actual results is included in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.

Investor Contacts:
Jeff Sonnek - ICR, Inc.
(720) 730-8160
investors@urban-gro.com

Media Contact:
Barbara Graham - urban-gro, Inc.
(720) 903-1139
media@urban-gro.com

SOURCE: urban-gro, Inc.

View the original press release on ACCESS Newswire

FAQ

What is the value of urban-gro's (UGRO) new LED lighting contract in 2025?

urban-gro secured a $6 million LED lighting equipment contract with a northern-based North American Cannabis Operator.

When will urban-gro (UGRO) recognize revenue from the $6M LED lighting contract?

The company expects to recognize the revenue in the first half of 2025.

What are the expected benefits of urban-gro's (UGRO) LED lighting upgrade project?

The lighting upgrade will enhance efficiency, boost crop yields, and deliver more consistent, reliable, and high-quality harvests.

Which sector is the new urban-gro (UGRO) LED lighting contract for?

The contract is with a leading northern-based North American Cannabis Operator in the Controlled Environment Agriculture (CEA) sector.