Aurora Cannabis Announces Fiscal 2025 Second Quarter Results
NASDAQ | TSX: ACB
Record Adjusted EBITDA1 of $10.1 Million, a YoY increase of 210%
Quarterly Net Revenue1 up 29% YoY to $81.1 Million, with 41% growth in Global Medical Cannabis
Re-Affirms Target of Positive Free Cash Flow1 in the Quarter Ending December 31, 2024
Maintains Strong Balance Sheet with ~$152 Million of Cash and a Debt-Free Cannabis Business2
EDMONTON, AB, Nov. 6, 2024 /PRNewswire/ - Aurora Cannabis Inc. (the "Company" or "Aurora") (NASDAQ:ACB) (TSX:ACB), a leading Canada-based global medical cannabis company, today announced its financial and operational results for the second quarter fiscal 2025.
"Our strong quarterly results demonstrate Aurora's leadership in global medical cannabis and ability to capitalize on opportunities within rapidly growing markets such as Australia, Germany, Poland, and the UK. International revenue increased 93% to $35 million, exceeding Canadian Medical revenue for the first time, and contributing 57% to total global medical cannabis revenue. The Bevo plant propagation segment also grew a robust 21% during its seasonally lowest quarter, proving the efficacy of our diversified operating model," said Chairman and Chief Executive Officer Miguel Martin.
"With two quarters remaining in the fiscal year, we are proud to have delivered record adjusted EBITDA1 and believe fiscal 2025 is anchored by our commitment to strategic growth, operational excellence, and the continued strength of our balance sheet," Mr. Martin concluded.
1 This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. See "Non-GAAP Measures" below for reconciliations of non-GAAP financial measures to GAAP financial measures.
2 Aurora's only remaining debt is non-recourse debt of $57.5 million relating to Bevo Farms Ltd as detailed in the FY2025 Q2 Financial Statements.
Second Quarter 2025 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q2 2025, Q1 2025, and Q2 2024 results and are in Canadian dollars)
Consolidated Revenue and Adjusted Gross Profit:Total net revenue1 was $81.1 million, as compared to $63.1 million in the prior year period. The 29% increase from the prior period was mainly due to 41% growth in our global medical cannabis business and 21% growth in our plant propagation business, slightly offset by lower quarterly revenue in our consumer cannabis business.
Consolidated adjusted gross margin before fair value adjustments1 was 54% in Q2 2025 and 51% in the prior year quarter. Adjusted gross profit before FV adjustments1 was $42.6 million in Q2 2025 vs $32.0 million in the prior year quarter, an increase of 33%.
Medical Cannabis:Medical cannabis net revenue1 was $61.3 million, a 41% increase from the prior year quarter, delivering 76% of Aurora's Q2 2025 consolidated net revenue1 and 98% of adjusted gross profit before fair value adjustments1.
The increase in net revenue1 of $17.8 million was primarily due to higher sales to Australia, Germany, Poland, and the UK, and stabilized sales in Canada.
Adjusted gross margin before fair value adjustments1 on medical cannabis net revenue reached 68% for the three months ended September 30, 2024, compared to 63% in the prior year quarter. The adjusted gross margins before fair value adjustments improved through sustainable cost reductions, higher selling prices in Australia, and improved efficiency in production operations, including sourcing for Europe from Canada.
Consumer Cannabis:Aurora's consumer cannabis net revenue1 was $10.4 million, a 13% decrease compared to $12 million in the prior year quarter. The decrease was due to our decision to prioritize the supply of our GMP manufactured products to our high margin international business rather than the consumer business, which offers lower margins.
Adjusted gross margin before fair value adjustments1 on consumer cannabis net revenue1 was 14%, decreasing from 27% compared to the prior year quarter. The decrease from the prior year comparative quarter is largely due to higher fixed overhead costs allocated to the consumer channel as a result of lower volumes manufactured for products sold by the channel. The Company strategically decided to allocate less internally produced cannabis for the consumer channel in favor of increasing its overall cannabis allocation for both its domestic and international medical channels.
Plant Propagation:Plant propagation net revenue1 was wholly comprised of the Bevo business, and contributed $8.6 million of net revenue1, a 21% increase compared to $7.2 million in the prior year quarter. The increase was a result of organic growth and increased product offerings, both arising from increased capacity.
Adjusted gross margin before fair value adjustments1 on plant propagation revenue was 19% for Q2 2025 and 22% for the prior year quarter. The fluctuations in the plant propagation adjusted gross margin before fair value adjustments is due to the seasonal timing of lower margin product revenue and ramp up of the orchid business.
Selling, General and Administrative ("SG&A"):Adjusted SG&A1 was $31.7 million in Q2 2025, which excludes $4.0 million of business transformation costs. The increase compared to the three months ended September 30, 2023 relates to higher freight and logistics costs, notably from sales to Europe with the increase in sourcing from Canada and incremental costs following the acquisition of MedReleaf Australia.
Net Income (Loss):Net income from continuing operations for the three months ended September 30, 2024 was $1.7 million compared to net income of $0.4 million for the prior year period. The increase in net income of $1.2 million compared to the three months ended September 30, 2023 primarily relates to a decrease in other income of $8.4 million and decrease of operating expenses of $0.7 million, offset by an increase in gross profit of $7.8 million.
Adjusted EBITDA: Adjusted EBITDA1 increased 210% to $10.1 million for the three months ended September 30, 2024 compared to $3.3 million for the prior year quarter.
Fiscal Q3 2025 Expectations:In Q3 2025, we expect to see continued strong net revenue1 and adjusted gross margins1 across our global medical cannabis business, supported by net revenue1 growth in Europe and Australia.
For plant propagation, we expect to see seasonally reduced net revenues1 and adjusted gross profit1 that will be in line with historical seasonal trends as 25%, 35% of revenues are normally earned in the second half of a calendar year.
Positive adjusted EBITDA1 is expected to continue, while free cash flow1 is projected to be positive due to strong net revenue1 and continued spend discipline, resulting in strong adjusted gross margins.
Key Quarterly Financial Results
($ thousands, except Operational Results)
Three months ended
September 30, 2024
June 30, 2024
$ Change
% Change
September 30, 2023(3)
$ Change
% Change
Financial Results
Net revenue (1a)
$81,122
$83,435
($2,313)
(3 %)
$63,119
$18,003
29 %
Medical cannabis net revenue (1a)
$61,316
$47,201
$14,115
30 %
$43,517
$17,799
41 %
Consumer cannabis net revenue (1a)
$10,422
$11,533
($1,111)
(10 %)
$11,959
($1,537)
(13 %)
Plant propagation revenue
$8,634
$23,081
($14,447)
(63 %)
$7,154
$1,480
21 %
Adjusted gross margin before FV adjustments on total net revenue (1b)
54 %
43 %
N/A
11 %
51 %
N/A
3 %
Adjusted gross margin before FV adjustments on cannabis net revenue (1b)
57 %
53 %
N/A
4 %
55 %
N/A
2 %
Adjusted gross margin before FV adjustments on medical cannabis net revenue (1b)
68 %
69 %
N/A
(1 %)
63 %
N/A
5 %
Adjusted gross margin before FV adjustments on consumer cannabis net revenue (1b)
14 %
24 %
N/A
(10 %)
27 %
N/A
(13 %)
Adjusted gross margin before FV adjustments on plant propagation net revenue (1b)
19 %
18 %
N/A
1 %
22 %
N/A
(3 %)
Adjusted SG&A expense(1d)
$31,722
$31,396
$326
1 %
$27,733
$3,989
14 %
Adjusted EBITDA (1c)
$10,122
$4,887
