Loading...
01/10 00:34
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed bag: strong growth in medical cannabis and plant propagation segments, but declining consumer cannabis revenue and increased SG&A expenses. The Q&A highlights structural advantages in international markets but reveals uncertainties in regulatory environments and cash flow challenges. Despite positive adjusted net income and margin improvements, negative free cash flow and unclear guidance on regulatory impacts temper optimism. Without market cap details, a neutral stance is prudent, reflecting balanced positive and negative factors.
Net Revenue $90 million, an 11% increase year-over-year. This growth was driven by record global medical cannabis revenue (15% increase) and record international revenue (22% increase).
Consolidated Adjusted Gross Margin 61%, a 700 basis points improvement year-over-year. This was due to higher cannabis margins from increased international revenue.
Adjusted EBITDA $15 million, a 52% increase year-over-year. This growth exceeded top-line growth by a factor of 5, driven by substantial increases in gross profit.
Medical Cannabis Net Revenue $70.5 million, a 15% increase year-over-year. This was due to 22% growth in international markets and strong contributions from Canadian medical cannabis.
Medical Cannabis Adjusted Gross Margin 69%, up from 68% year-over-year. This increase was driven by higher revenue in international markets, which have higher margins.
Consumer Cannabis Net Revenue $6.9 million, down from $10.4 million year-over-year. This decline was due to a strategic decision to prioritize higher-margin medical cannabis sales.
Consumer Cannabis Adjusted Gross Margin 27%, up from 15% year-over-year. This increase was due to sales of higher-margin products and cost improvements.
Plant Propagation Net Revenue $11.6 million, a 34% increase year-over-year. This growth was driven by higher orchid sales.
Plant Propagation Adjusted Gross Margin 10%, down from 19% year-over-year. This decline was due to inventory write-offs caused by a nonrecurring quality issue and surplus crops not sold in the first quarter.
Adjusted SG&A $35.5 million, a 12% increase year-over-year. This was due to higher freight and logistics costs and investments in commercial teams in Europe and Australia.
Adjusted Net Income $7.1 million, up from $3 million year-over-year. This improvement was due to an increase in adjusted gross profit, partially offset by higher adjusted SG&A.
Free Cash Flow Negative $42.3 million, compared to negative $26.4 million year-over-year. This reflects expected cash outflows typical for the second quarter of the fiscal year.
Proprietary cultivars: Launched two proprietary cultivars in Poland, noted as the highest potency medical cannabis products in the country.
Vape products: Successfully launched proprietary cultivar-specific inhalable cannabis extracts in the U.K., performing well in the market.
Global medical cannabis: Net revenue rose 15% to $70.5 million, with international revenue growing 22%.
Germany: Increased revenue during the quarter, gaining share based on strong reputation among wholesalers, distributors, and pharmacists. Imports have grown significantly, and regulatory changes are being monitored.
Poland: Market size doubled from 2023 to 2025, with robust revenue growth driven by new product launches and regulatory expertise.
Australia: Second largest market outside Canada, representing a $1 billion opportunity with rapid expansion over the past two years.
U.K.: Expanding distribution and clinic relationships, leveraging lighter competition in premium segments.
Other European markets: Positive developments in Spain, France, Switzerland, Austria, Turkey, and Ukraine, with increasing regulatory alignment and market integration.
Operational efficiencies: Doubling production at the German manufacturing site to align with Canadian sites, targeting yield and operational efficiencies.
Vertical integration: Lower production costs achieved through focus on yield, potency improvement, and operational efficiencies.
Global leadership: Positioned as a leader in global medical cannabis with a focus on profitable growth and regulatory expertise.
Regulatory alignment: Advantage in international markets due to compliance with stringent EU GMP standards and regulatory engagement.
Regulatory Changes in Germany: Potential modifications to the telehealth framework and home delivery regulations in Germany could pose challenges, particularly for patients in rural areas, impacting accessibility and potentially reducing market share.
Supply Chain and Production Costs: Higher freight and logistics costs, especially from increasing sales to Europe, and investments in commercial teams in Europe and Australia have increased operational expenses.
Consumer Cannabis Revenue Decline: Net revenue from consumer cannabis decreased from $10.4 million to $6.9 million, reflecting a strategic shift but also a potential risk of losing market presence in this segment.
Plant Propagation Quality Issues: Nonrecurring quality issues and surplus crops not sold led to inventory write-offs, reducing margins in the plant propagation segment.
Free Cash Flow Deficit: Free cash flow was negative $42.3 million, reflecting expected cash outflows but still a financial challenge to address.
Regulatory Barriers in Emerging Markets: Lengthy registration processes and stringent regulatory standards in markets like Poland and Spain could slow market entry and expansion.
Revenue Growth: Consolidated net revenue is expected to increase year-over-year, driven primarily by 8% to 12% growth in the global medical cannabis segment.
Plant Propagation Revenue: Plant propagation revenue is expected to perform in line with traditional seasonal trends, with 25% to 35% of revenues normally earned in the second half of the calendar year.
Adjusted Gross Margins: Consolidated adjusted gross margins are expected to remain strong, driven primarily by industry-leading margins in the cannabis business. Plant propagation adjusted gross margins are expected to mostly perform in line with historical trends.
Adjusted EBITDA Growth: Continued strength in adjusted gross margins and higher global medical cannabis revenue should lead to year-over-year annual adjusted EBITDA growth.
Free Cash Flow: Free cash flow is expected to be positive in Q3 2026 due to continued strong performance and improved operating cash yield.
The selected topic was not discussed during the call.
The earnings call presents a mixed bag: strong growth in medical cannabis and plant propagation segments, but declining consumer cannabis revenue and increased SG&A expenses. The Q&A highlights structural advantages in international markets but reveals uncertainties in regulatory environments and cash flow challenges. Despite positive adjusted net income and margin improvements, negative free cash flow and unclear guidance on regulatory impacts temper optimism. Without market cap details, a neutral stance is prudent, reflecting balanced positive and negative factors.
The earnings call reveals a strong financial performance with record medical cannabis revenue and improved margins. Despite lower consumer cannabis revenue, strategic focus on high-margin medical cannabis and international growth are promising. Positive cash flow and no cannabis business debt highlight financial health. The Q&A section reveals challenges in Europe but also demonstrates management's proactive strategies. While SG&A expenses are higher, they are partly one-time. Overall, the optimistic guidance for future EBITDA and market expansion suggests a positive sentiment, likely resulting in a stock price increase in the short term.
The earnings call highlighted strong financial performance with a 34% revenue growth and a significant increase in adjusted EBITDA. Despite a temporary decline in Poland, management provided optimistic guidance, particularly with international market expansion plans. The Q&A revealed confidence in overcoming competitive challenges and maintaining supply levels. Although management was vague on some specifics, the overall sentiment remained positive, especially with strong margins and no debt. Given these factors, a positive stock price movement is anticipated over the next two weeks.
Aurora Cannabis has shown strong financial performance with a 37% increase in net revenue, positive free cash flow, and no cannabis business debt. The company is expanding internationally, particularly in favorable regulatory environments like Europe and Australia, and maintains high margins. While there are supply chain and competitive pressures, Aurora's strategic focus on operational excellence and profitability is reassuring. The Q&A session revealed confidence in managing supply challenges and sustaining margins, contributing to a positive outlook. Despite some uncertainties in competition and data, the overall sentiment is positive, suggesting a likely stock price increase.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
