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]

Core Insights - A new bank named Erebor has received preliminary government approval, backed by Palmer Luckey and other founders [1] Company Overview - Erebor is a newly established bank that has gained initial regulatory approval, indicating a step towards operational readiness [1] Founders and Backing - The bank is supported by notable figures, including Palmer Luckey, which may enhance its credibility and attract potential investors [1]

Core Insights - The Canadian cannabis market is crucial for the global marijuana industry, with U.S. legalization efforts expected to drive growth and cross-border opportunities [1][15] - Leading Canadian cannabis stocks are gaining investor attention due to improving financials and international expansion, particularly Cronos Group, Aurora Cannabis, and OrganiGram [2][15] Industry Overview - The U.S. cannabis industry is projected to exceed $56 billion by 2030, driven by expanding state programs and rising consumer acceptance [1] - Discussions around federal reclassification and potential legalization are creating optimism in both Canadian and American markets [1] Company Summaries Cronos Group - Cronos Group operates several global brands and has an indirect presence in the U.S. through a partnership with PharmaCann, which operates over twenty dispensaries [3][6] - The company exited the U.S. CBD market in 2023 to focus on higher-margin international products, improving operational efficiency and long-term growth potential [3][6] - Financially, Cronos reported steady revenue growth in 2024, reduced operating losses, and a strong balance sheet supported by Altria Group [6][8] Aurora Cannabis - Aurora Cannabis is a leader in the global cannabis sector with large-scale cultivation facilities and a focus on medical and recreational products [8][10] - The company has positioned itself for U.S. market entry upon federal legalization and has a strong international presence in Europe, Australia, and South America [8][10] - Aurora achieved revenue growth in 2025, positive gross margins, and a small net income after years of losses, reflecting a notable financial recovery [10] OrganiGram Holdings - OrganiGram is recognized for its agility and rapid growth, enhancing its international presence through partnerships and the recent acquisition of Motif Labs [11][13] - The company achieved record quarterly revenues and positive adjusted EBITDA in 2025, driven by strong sales of premium products and improved production efficiency [13] - OrganiGram's focus on higher-margin segments and global export potential continues to attract investor interest, with positive trends in its financial performance [13][14]

Core Insights - The cannabis industry is showing strong profitability, with both multi-state operators (MSOs) and ancillary companies thriving in the market [1][2] - Despite the overall success in the cannabis sector, public marijuana stocks have not performed similarly, often influenced by political updates and reform issues [2][3] - A long-term investment strategy focusing on companies adapting to market volatility is recommended for potential profitability [2][3] Company Summaries - **Aurora Cannabis Inc.**: Engages in the production, distribution, and sale of cannabis products in Canada and internationally. Recently invested in a German manufacturing facility to enhance growth capacity and product quality [4][6][7] - **Cronos Group Inc.**: Operates in the cultivation, production, and marketing of cannabis products in Canada and internationally. Recently launched a new product line, SOURZ by Spinach®, which offers a variety of liquid diamond-infused gummies [8][9][11] - **SNDL Inc.**: Focuses on the production and sale of cannabis products for the adult-use market in Canada. Reported a record net revenue for its Cannabis Retail segment and significant growth in operating income [8][13][14]