Silver Spike Investment Income, Profit Soars in Q3

Silver Spike Investment Income, Profit Soars in Q3

The firm inked no new investments during the period.

Cannabis financier Silver Spike Investment (NASDAQ: SSIC) reported financials earnings for the quarter ending Sept. 30, showing revenue that beat analysts’ expectations for the period.

The company announced total investment income of $2.9 million, more than double the $1.2 million reported for the same period a year ago, and a net investment income of $1.6 million, or $0.26 per share, nearly three times the amount from third quarter 2022.

The figures reflect the firm’s positioning in a market that continues to suffer regulatory and economic headwinds. Still, total income was in line with analysts’ average estimate of $2.84 million.

“We remain in a challenging environment for cannabis operators and investors, but we are encouraged by initial signs of improved market dynamics for several state markets and an increase in debt financing interest from operators,” CEO Scott Gordon said in a statement. “We continue to see attractive investment opportunities with favorable risk/reward characteristics, and we will seek to add investments to the portfolio in a disciplined manner.”

Silver Spike’s investment portfolio, which comprises secured loans and notes across an array of different cannabis companies., was assessed a fair value of $57.4 million.

However, the firm’s net asset value per share saw a decrease, moving from $14.49 to $14.06, largely attributed to dividend payouts. In line with its shareholder-friendly approach, the company declared a dividend of $0.70 per share, combining a regular quarterly dividend with a special dividend, payable in late December.

This dividend announcement is particularly notable given the broader context of the nascent industry, which has faced all sorts of existential challenges ranging from regulatory hurdles to market saturation in certain states.

Despite no new investments this quarter, Silver Spike maintained a decent liquidity position with $29.8 million in cash equivalents.

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