Core Viewpoint - Aurora Cannabis Inc. reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, and showing a significant increase from $0.04 per share a year ago, representing an earnings surprise of +200.00% [1][2] Financial Performance - The company posted revenues of $65.62 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.88%, and an increase from $59.47 million in the same quarter last year [2] - Over the last four quarters, Aurora Cannabis has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - Aurora Cannabis shares have increased by approximately 6.8% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of the recent earnings numbers [3][4] Earnings Estimates and Revisions - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $69 million, while for the current fiscal year, the estimate is -$0.31 on revenues of $271.75 million [7] - Prior to the earnings release, the trend for estimate revisions was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Medical - Products industry, to which Aurora Cannabis belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8]

Financial Data and Key Metrics Changes - Net revenue increased by 11% to $90 million, with record global medical cannabis revenue rising 15% and international revenue up 22% [5][16] - Consolidated adjusted gross margin improved by 700 basis points to 61%, with medical cannabis adjusted gross margin reaching 69% [5][17] - Adjusted EBITDA rose more than 52% to $15 million, significantly outpacing top-line growth [5][16] Business Line Data and Key Metrics Changes - Medical cannabis net revenue grew by 15% to $70.5 million, accounting for 78% of total net revenue [17] - Consumer cannabis net revenue decreased to $6.9 million from $10.4 million, reflecting a strategic focus on higher-margin medical cannabis [17] - Bevo's plant propagation net revenue increased by 34% to $11.6 million, driven by higher orchid sales [18] Market Data and Key Metrics Changes - Australia is the largest medical cannabis market outside Canada, with a market opportunity of AUD 1 billion [9] - In Germany, imports of medical cannabis have increased from 8 metric tons in 2018 to 72 metric tons in 2024, with expectations to double in 2025 [10] - Poland's medical cannabis market size has more than doubled from over 2 tons in 2023 to approximately 5 tons in 2025 [11] Company Strategy and Development Direction - The company focuses on global medical cannabis, emphasizing operational execution and a strong cash position without cannabis-related debt [4] - Aurora aims to strengthen its leadership in Canada, Europe, and Australia through consistent revenue generation and positive adjusted EBITDA growth [24] - The company is investing in science and technology to support patient access and physician engagement, building a foundation for long-term success [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate potential regulatory changes in Germany and Poland, citing a strong track record [10][12] - The company anticipates continued strength in adjusted gross margins and higher global medical cannabis revenue growth, leading to annual adjusted EBITDA growth [21] - Management highlighted the importance of maintaining a high-quality supply of medical cannabis to meet patient and practitioner needs [35] Other Important Information - The company ended the quarter with $142 million in cash and cash equivalents and no cannabis business debt [16][19] - Free cash flow was negative $42.3 million, reflecting expected cash outflows typical for the second quarter [20] Q&A Session Summary Question: What is a realistic goal for medical gross margins? - Management indicated that production costs are decreasing, and efficiencies in execution are contributing to higher margins [26][30] Question: What is the status of cannabis import permits in Germany? - Management confirmed that the company maintained strong relationships with regulators and was not disrupted by import limits [56][58] Question: How will proposed changes to reimbursement for medical cannabis veterans in Canada impact the business? - Management expressed disappointment over the lack of consultation and indicated that the changes could disrupt patient care [41][46] Question: What is the timeline for potential regulatory changes in Germany and Australia? - Management noted that changes in Germany could take until spring for clarity, while Australia has a more open-ended timeline [95][102]

Financial Performance - Net revenue reached $90.4 million, an 11% year-over-year increase[8] - Global medical cannabis net revenue grew by 15% year-over-year, reaching $70.5 million[8, 13] - Adjusted gross margin was 61%, a 700 bps year-over-year increase[8] - Adjusted EBITDA increased by 52% year-over-year to $15.4 million[8, 13] - Free cash flow was $(42) million, a $(16) million year-over-year decrease[8] Market Leadership and Expansion - The company holds the 1 market share in the Canadian medical cannabis market[25, 29] - International net revenue increased by 22% year-over-year, reaching $42.7 million[13] - The company maintains leadership positions in key global markets including Germany, Australia, Poland, and the UK[7, 29, 30] Strategic Focus and Assets - The company focuses on high-growth, high-margin global medical cannabis opportunities[7] - The company has a strong cash balance of $141.9 million and no cannabis business debt[13] - The company has leading cannabis manufacturing facilities with GMP certification[37] - Plant propagation net revenue increased by 34% year-over-year, reaching $11.6 million[13]

AURORA CANNABIS INC. Interim Condensed Consolidated Financial Statements (Unaudited) For the three and six months ended September 30, 2025 and 2024 (in Canadian Dollars) AURORA CANNABIS INC. Interim Condensed Consolidated Statements of Financial Position (Unaudited) | ($ thousands) | Note | September 30, 2025 | March 31, 2025 | | --- | --- | --- | --- | | | | $ | $ | | Assets | | | | | Current assets | | | | | Cash and cash equivalents | | 95,689 | 137,921 | | Restricted cash | 10, 2(c) | 46,257 | 47,407 | ...

Core Insights - Aurora Cannabis Inc. reported a record net revenue of $90.4 million for Q2 2026, marking an 11% increase year-over-year, driven primarily by a 15% growth in the global medical cannabis segment and a 34% increase in plant propagation revenue [6][9][10] - The company achieved an adjusted EBITDA of $15.4 million, reflecting a 52% increase compared to the same period last year, indicating strong operational performance [19][9] - Aurora maintains a strong balance sheet with $141.9 million in cash and operates a debt-free cannabis business, positioning itself well for future growth [4][9] Financial Performance - Total net revenue for Q2 2026 was $90.4 million, up from $81.1 million in Q2 2025, with medical cannabis contributing $70.5 million, which is 78% of total revenue [6][8] - Adjusted gross profit before fair value adjustments was $51.8 million, a 22% increase from $42.6 million in the prior year [7] - The adjusted gross margin before fair value adjustments improved to 61% in Q2 2026 from 54% in the prior year [7] Medical Cannabis Segment - Medical cannabis net revenue reached $70.5 million, a 15% increase year-over-year, accounting for 94% of adjusted gross profit before fair value adjustments [8][9] - International medical cannabis revenue grew by 22% to $42.7 million, highlighting Aurora's leadership in key markets [9][10] - The adjusted gross margin for medical cannabis was 69%, slightly up from 68% in the previous year, driven by cost reductions and improved production efficiency [11] Consumer Cannabis Segment - Consumer cannabis net revenue decreased by 34% to $6.9 million, attributed to a strategic focus on high-margin medical cannabis over consumer products [12][9] - The adjusted gross margin for consumer cannabis improved to 27% from 15% in the prior year, reflecting cost efficiencies [13] Plant Propagation Segment - Plant propagation revenue was $11.6 million, a 34% increase from $8.6 million in the prior year, driven by organic growth and expanded product offerings [14] - However, the adjusted gross margin for plant propagation decreased to 10% from 19% due to inventory write-offs and surplus crops [15] Operational Efficiency - Adjusted SG&A expenses rose to $35.5 million, up from $31.7 million in the prior year, primarily due to increased freight and logistics costs [16] - The company reported a net loss from continuing operations of $53.2 million, a significant decline from a net income of $1.4 million in the prior year, influenced by increased operating expenses and other costs [17] Future Outlook - For Q3 2026, Aurora expects consolidated net revenue to increase year-over-year, driven by 8% to 12% growth in the global medical cannabis segment [21] - The company anticipates maintaining strong adjusted gross margins and positive free cash flow due to improved operational performance [22][23]

Core Insights - The Canadian cannabis market is evolving with global demand increasing and U.S. legalization being a significant topic of interest [1][13] - Major producers are focusing on profitability, cost reduction, and high-margin opportunities like medical exports and branded products [1][13] Company Summaries Tilray Brands, Inc. (TLRY) - Tilray is expanding its U.S. presence through hemp-derived THC beverages and wellness products, focusing on consumer engagement and product innovation [3][5] - For fiscal 2025, Tilray's total net revenue increased by approximately 4% year over year to over $820 million, with gross profit in its cannabis division rising to nearly $100 million and gross margin expanding from 33% to 40% [5][12] - Despite facing a net loss due to impairment charges, management is confident in its restructuring plan and international expansion strategy [5][12] Cronos Group Inc. (CRON) - Cronos is focused on innovation and cannabinoid research, preparing for potential federal legalization in the U.S. while serving international medical and wellness markets [7][9] - In 2024, Cronos's annual net revenue rose by over 30%, with quarterly results in early 2025 showing continued progress and net income turning positive for the first time in years [9][12] - The company maintains a strong balance sheet with substantial cash reserves and minimal debt, positioning itself for sustained growth [9][12] Aurora Cannabis Inc. (ACB) - Aurora serves both medical and recreational markets across more than 25 countries, focusing on medical exports and high-quality production [10][12] - The company reported over 35% year-over-year revenue growth in 2025, with medical cannabis sales rising over 50% [12] - Aurora's strategic pivot towards the higher-margin medical market has improved profitability and stabilized cash flow, positioning it well for future growth [12][13] Industry Outlook - The Canadian cannabis sector is navigating a critical transformation period, with companies like Tilray, Cronos, and Aurora leading the charge [13][14] - Investors are encouraged to monitor technical patterns and apply strict risk management to capitalize on potential growth opportunities in November 2025 [14]

Core Insights - Cannabis stocks may experience a rally due to potential new federal regulations for hemp-derived products and a more permissive stance from President Trump on marijuana [1][4][19] Company Performance - Verano Holdings reported revenues of $203 million, a slight increase from the previous quarter but a 6% decrease year-over-year, with a net loss of $44 million attributed to impairment charges and legal contingencies [2] - Tilray Brands' stock surged 22% in October following better-than-expected fiscal first-quarter results, indicating potential for recovery in the sector [3] Market Trends - The cannabis market is projected to reach a $160 billion global market by 2032, with a 40% growth in U.S. cannabis production value last year [6] - Daily or near-daily marijuana use in the U.S. has surpassed daily drinking, reflecting increasing popularity [5] Regulatory Developments - Trump's support for Medicare coverage of CBD and potential reclassification of marijuana could attract more companies to the U.S. cannabis market [4][19] - Congress is considering updates to the 2018 Farm Bill to establish federal standards for hemp-derived products, which could enhance market legitimacy and consumer safety [13][15] Investor Sentiment - Investor optimism has surged following Trump's video promoting CBD, with significant stock price increases for companies like Tilray and Aurora Cannabis [9][11] - The cannabis industry is hopeful that federal regulations could legitimize the market and attract institutional investors [17][18] Challenges and Concerns - Despite optimism, some Republican lawmakers are pushing for stricter regulations on hemp-derived products due to safety concerns, which could impact market dynamics [24][28] - The cannabis market remains largely unregulated, leading to potential safety issues and consumer exposure to mislabeled products [15][27]

Industry Overview - The cannabis industry is evolving with potential U.S. federal reform and international market expansion, leading to increased global demand for both medical and recreational cannabis [1] - Analysts project the U.S. cannabis market could exceed $50 billion by 2030, driven by growing legalization efforts and shifting consumer attitudes [1] - Navigating this sector requires careful attention to fundamentals, technical analysis, and disciplined risk management [1] Company Highlights IM Cannabis Corp. (IMCC) - IM Cannabis is an international medical cannabis company headquartered in Israel, focusing on the medical market through pharmacy networks and online distribution [3][5] - The company reported a notable increase in annual revenue in 2024, reflecting rising medical demand in Israel and Germany, with modest revenue growth and a small net profit in Q1 2025 [5][11] - IM Cannabis represents a stable, lower-risk option for investors seeking medical cannabis exposure with a strong international foundation [5] Cronos Group Inc. (CRON) - Cronos Group is a Canadian cannabinoid company with a global strategy, focusing on both recreational and medical markets [6][8] - The company reported solid year-over-year revenue growth, supported by strong Canadian adult-use sales and expanding global demand, with improved gross profit margins [8] - Cronos maintains one of the strongest balance sheets in the cannabis industry, providing flexibility for future acquisitions or U.S. market entry [8][11] Aurora Cannabis Inc. (ACB) - Aurora Cannabis is one of Canada's largest cannabis producers, serving both recreational and medical markets with a wide international footprint [9][10] - The company reported significant revenue growth year-over-year, driven by rising medical sales and improved distribution efficiency, with a return to consistent profitability [10][11] - Aurora remains one of the few large-scale producers generating sustainable profits in the global cannabis space, appealing to investors looking for scale and stability [10][11]

Core Points - Aurora Cannabis Inc. has scheduled a conference call to discuss its second quarter 2026 financial results on November 5, 2025, at 8:00 a.m. Eastern Time [1][2] - The company will release its financial results before the market opens on the same day [1] - Miguel Martin, Executive Chairman and CEO, and Simona King, CFO, will host the conference call [2] Company Overview - Aurora Cannabis is a leading global medical cannabis company based in Edmonton, Alberta, serving both medical and consumer markets across Canada, Europe, Australia, and New Zealand [3] - The company's brand portfolio includes various adult-use brands such as Drift, San Rafael '71, Daily Special, Tasty's, Being, and Greybeard, as well as medical cannabis brands like MedReleaf, CanniMed, Aurora, and Whistler Medical Marijuana Co [3] - Aurora holds a controlling interest in Bevo Farms Ltd., a major supplier of propagated agricultural plants in North America [3] - The company emphasizes science and innovation, focusing on high-quality cannabis products to lead in medical, wellness, and adult recreational markets [3][4]

Core Insights - Aurora Cannabis (ACB) shares have increased by 21% year to date, outperforming the industry average of 5% [1][3] Company Performance - For the first quarter of fiscal 2026, Aurora's total revenues rose by 17% year over year and 8% sequentially to C$98 million, driven primarily by the medical cannabis segment [4][7] - Medical cannabis sales increased by 37% year over year to nearly C$65 million, supported by higher revenues from insurance-covered and self-paying patients in Canada, as well as growth in international markets such as Australia, Germany, Poland, and the UK [5][6] - The adjusted gross margin for the medical cannabis segment improved to 69%, up from 67% in the previous year, contributing to a 209% year-over-year increase in adjusted EBITDA to approximately C$11 million and generating free cash flow of over C$9 million, a 42% increase year over year [6][7] Market Outlook - Aurora anticipates continued growth in international medical cannabis sales in the fiscal second quarter, aided by new product launches and market expansion efforts [7][8] - The global medical cannabis market is projected to exceed $130 billion by the end of 2032, highlighting Aurora's strategic focus on this high-margin segment [8] Competitive Landscape - Despite strong performance in the medical cannabis sector, Aurora's recreational segment is underperforming due to intense competition and price pressures in Canada's adult-use market [9][10] - The company is shifting its strategy to prioritize the production of GMP-certified medical cannabis products, which offer higher margins and align with its long-term goals [10] - Aurora faces significant competition from peers like Curaleaf Holdings and Tilray Brands, both of which are also pursuing international expansion and cost optimization strategies [11][12] Valuation Estimates - Loss per share estimates for 2025 and 2026 have remained unchanged over the last 30 days, indicating stability in expectations [13] Investment Considerations - While there are positive trends in Aurora's medical cannabis division, challenges remain due to ongoing weakness in the recreational segment and a competitive market environment [15][16] - The company's cash flow is improving but remains modest compared to its investment needs, and its limited presence in the U.S. market restricts its ability to capitalize on potential federal reforms [16]