One of the worst performing names in the market continues to be Tilray (NASDAQ: TLRY ). The Canadian cannabis and beverage firm has seen its shares plunge more than 92% over the past five years as revenue growth hasI am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have be ...

Tilray Brands, Inc. (NASDAQ: TLRY ) has just reported its Q3 2025 earnings showcasing declining revenues and ballooning losses, leading the stock to drop 21% and reach a new all-time low. While the company's earnings appear to be disappointing onAs a former managing editor at a financial media publication focused on mid and small caps, I am using my experience to present investment opportunities in undervalued companies. My experience, combined with my academic background in financial markets and institutio ...

Financial Data and Key Metrics Changes - In Q3 2025, the company generated net revenue of $186 million, or $193 million on a constant currency basis, reflecting a 2% increase compared to the previous year [20][64] - Gross profit increased by 5% to $52 million, with gross margin rising by 200 basis points to 28% compared to the prior year [23][68] - The company reported a net loss of $793.5 million, primarily due to a $700 million non-cash impairment related to macroeconomic conditions [69][70] Business Line Data and Key Metrics Changes - The beverage segment generated $55.9 million in net revenue, with a gross margin increase to 36% compared to 34% in the prior year [50][68] - Cannabis net revenue was $54.3 million, with a gross margin of 41%, the highest in almost two years, driven by strategic decisions to focus on higher-margin products [30][80] - Wellness segment revenue grew by 8% on a constant currency basis to $14.1 million, with gross margin increasing to 32% [47][81] Market Data and Key Metrics Changes - The company operates the largest legal cannabis business in Canada by revenue and leads the medical cannabis business in Europe [25] - In Germany, medical cannabis sales grew significantly, with flower sales increasing by 79% post-legalization [35] - The company holds nearly 60% market share in the U.S. hemp high-protein food sector and 80% in Canada [25] Company Strategy and Development Direction - The company is focused on building a sustainable global business platform, emphasizing profitable sales growth and improving profit margins [19][28] - Strategic initiatives include SKU rationalization, geographic consolidation, and enhancing operational efficiencies [51][75] - The company aims to capture opportunities in international markets, particularly in Europe, leveraging its established infrastructure [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the beverage and cannabis markets despite current challenges [25][74] - The company is optimistic about the potential for growth in the hemp-derived THC beverage segment, targeting multimillion-dollar revenue [98] - Management highlighted the importance of focusing on profitability over sheer sales growth, indicating a strategic shift in operations [20][22] Other Important Information - The company has made seven acquisitions since 2020 in the beverage sector and is focused on integrating these brands [17][18] - The company plans to accept cryptocurrency as a payment method in its online operations [27] - Cash and marketable securities totaled $248.4 million, up from $225.9 million in the prior year [82] Q&A Session Summary Question: Allocation of cannabis product and share loss in Canada - Management acknowledged the importance of profitability and indicated that while share loss in Canada may occur, the focus remains on overall business growth and margin improvement [89][92] Question: Hemp-derived beverages and marketing initiatives - Management confirmed that hemp-derived beverages are currently sold in 1,000 stores across ten states, with multiple marketing programs in place to drive consumer education and sales [94][98] Question: Cannabis gross margins and building blocks for margin expansion - Management indicated that the majority of the margin expansion was due to a favorable product mix and strategic decisions to focus on higher-margin products [106][110] Question: Beverage sales and craft beer brand performance - Management acknowledged that while some craft beer brands are experiencing declines, the focus is on SKU rationalization and regional marketing strategies to improve performance [112][116] Question: International market changes and telemedicine impact - Management noted that changes in telemedicine regulations in Poland have affected prescription volumes, but they remain optimistic about the market's recovery [128]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and improve content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - Tilray Brands, Inc. reported revenue of $185.78 million for the quarter ended February 2025, a decrease of 1.4% year-over-year, and an EPS of -$0.10 compared to $0.00 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $209.78 million, resulting in a surprise of -11.44%, while the EPS surprise was -150.00% against a consensus estimate of -$0.04 [1] Revenue Breakdown - Cannabis business revenue was $54.27 million, below the estimated $66.21 million, reflecting a year-over-year decline of 14.4% [4] - Wellness business revenue reached $14.09 million, slightly below the average estimate of $14.35 million, marking a year-over-year increase of 5% [4] - Beverage business revenue was reported at $55.92 million, compared to the estimated $63.20 million, showing a year-over-year growth of 2.3% [4] - Distribution business revenue amounted to $61.49 million, slightly below the average estimate of $61.92 million, with a year-over-year increase of 8.3% [4] Stock Performance - Over the past month, shares of Tilray Brands have returned -11%, compared to a -12.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Tilray Brands, Inc. reported a quarterly loss of $0.10 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.04, marking an earnings surprise of -150% [1] - The company posted revenues of $185.78 million for the quarter ended February 2025, missing the Zacks Consensus Estimate by 11.44% and down from $188.34 million year-over-year [2] - Over the last four quarters, Tilray Brands has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Movement and Outlook - Tilray Brands shares have declined approximately 56.4% since the beginning of the year, compared to a decline of -13.9% for the S&P 500 [3] - The future performance of Tilray Brands' stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $278.94 million, and for the current fiscal year, it is -$0.19 on revenues of $904.53 million [7] Industry Context - The Consumer Products - Staples industry, to which Tilray Brands belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Tilray Brands' stock performance [5]

Revenue Performance - Generated net revenue of $186 million in Q3, with $193 million in constant currency; impacted by strategic initiatives and SKU rationalization by $13 million [2] - Cannabis net revenue was $54.3 million, down from $63.4 million in the prior year quarter; gross margin increased to 41% [15] - Beverage alcohol net revenue increased to $55.9 million, with gross margin rising to 36% [15] - Distribution net revenue increased 8% to $61.5 million, with gross margin at 9% [15] - Wellness net revenue increased 5% to $14.1 million, with gross margin at 32% [15] - Total net revenue for the three months ended February 28, 2025, was $185,780,000, a decrease of 1% compared to $188,340,000 for the same period in 2024 [34] - The cannabis business generated $54,274,000 in revenue for the three months ended February 28, 2025, down 14% from $63,432,000 in the prior year [34] - The beverage business accounted for 30% of total net revenue for the three months ended February 28, 2025, generating $55,921,000 [34] - Total net revenue for Q3 2025 reached $192,949, a 2% increase from $188,340 in Q3 2024 [35] - Cannabis business revenue decreased to $54,274 in Q3 2025, down 14% from $63,432 in Q3 2024 [36] - Distribution business revenue increased to $65,054, up 15% from $56,794 in Q3 2024 [35] - Beverage business revenue for Q3 2025 was $55,921, a slight increase from $54,688 in Q3 2024 [38] Profitability and Loss - Gross profit increased by 5% to $52 million, with gross margin rising 200 bps to 28% compared to the prior year quarter [15] - Net loss of $(793.5) million due to approximately $700 million of non-cash impairment and other charges; adjusted net loss was $(2.9) million [15] - Operating loss for the three months ended February 28, 2025, was $(759,931,000), an increase of 826% compared to $(82,098,000) in the same period last year [32] - Net loss attributable to stockholders of Tilray for the three months ended February 28, 2025, was $(789,436,000), a 752% increase from $(92,701,000) in the prior year [32] - The company reported a comprehensive loss of $(798,923,000) for the three months ended February 28, 2025, which is a 628% increase compared to $(109,679,000) in the prior year [32] - The net loss for the three months ended February 28, 2025, was $(793,534,000), a significant increase of 656% compared to $(104,983,000) in the same period of 2024 [41] Financial Position - Reduced total debt by $71 million, with $248 million available in cash and marketable securities, resulting in net debt to trailing twelve months EBITDA of less than 1.0x [8] - Total current assets as of February 28, 2025, were $686.29 million, compared to $677.71 million as of May 31, 2024, reflecting a slight increase [29] - Cash and cash equivalents decreased to $199.96 million from $228.34 million over the same period [29] - Total liabilities decreased to $701.04 million from $778.49 million, indicating improved financial health [30] - The company’s accumulated deficit increased to $3.57 billion as of February 28, 2025, from $2.66 billion as of May 31, 2024 [30] - Cash and cash equivalents at the end of the period were $199,956,000, reflecting a 37% increase from $146,253,000 at the end of the previous year [33] - Working capital as of February 28, 2025, was $424,115, an increase from $302,111 in February 2024 [39] Operational Efficiency - Implementing AI and advanced horticulture automation technology to enhance operational efficiency and reduce costs [9] - Adjusted EBITDA is calculated by excluding various non-operating expenses, providing a clearer view of operational performance [22] - The company reported an adjusted net loss attributable to stockholders, which excludes non-operating income and other adjustments [23] Strategic Initiatives - Revised fiscal year 2025 guidance for net revenue to $850 million to $900 million, with potential adjustments for strategic initiatives totaling approximately $50 million [11] - The company is focusing on market expansion and new product development as part of its strategic initiatives [31] Cash Flow and Investments - Free cash flow is derived from net cash flow from operating activities minus capital investments, providing insight into liquidity [26] - Net cash used in operating activities for the nine months ended February 28, 2025, was $(81,792,000), a 33% increase from $(61,612,000) in the same period last year [33] - Total investments in capital and intangible assets rose by 40% year-over-year from $(25,753) thousand to $(18,373) thousand [44] - Year-over-year cash flow from operating activities showed a significant decline of 33% from $(81,792) thousand to $(61,612) thousand [44] - Free cash flow improved to $(19,973) thousand, a decrease of $4,115 thousand or 17% from $(24,088) thousand [44] - Adjusted free cash flow showed a substantial decline to $(18,165) thousand from $641 thousand, a change of $(18,806) thousand or 2934% [44]

Core Insights - Tilray Brands reported a net revenue of $186 million for the third quarter, with a constant currency revenue of $193 million, impacted by strategic initiatives and SKU rationalization which reduced revenue by $13 million [2][16] - The company confirmed that recent tariffs on international trade will not affect its sales, as its products are manufactured and distributed domestically in the U.S. and Canada, and its wellness business is exempt from the tariffs [3][4] - Tilray's cannabis segment achieved a gross margin increase of 800 basis points, maintaining its leadership in Canada by sales performance and showing strong sales growth in Germany [2][4] Financial Performance - Gross profit increased by 5% to $52 million, with a gross margin of 28%, up from 26% in the prior year [16] - The net loss for the quarter was $(793.5) million, primarily due to non-cash impairments and other charges, while adjusted net loss was $(2.9) million compared to an adjusted net income of $0.9 million in the prior year [16][34] - Adjusted EBITDA for the quarter was $9 million, down from $10.2 million in the previous year, affected by SKU rationalization and prioritization of international cannabis markets [16] Strategic Initiatives - Tilray's Project 420 aims to achieve $33 million in cost savings, with $20.6 million already completed, focusing on improving efficiency and profitability through SKU rationalization [5][6] - The company expanded its U.S. distribution of hemp-derived THC drinks across 10 states, generating $1.4 million in revenue from these sales [6][8] - Tilray's cannabis segment is redirecting inventories to international markets to capitalize on higher margins, with a focus on preserving gross margins and maintaining higher average selling prices [7][8] Balance Sheet and Debt Management - The company reduced total debt by $71 million, including a $58 million reduction in convertible notes, resulting in a net debt to trailing twelve months EBITDA of less than 1.0x [8][16] - As of April 8, 2025, Tilray had $248 million available in cash and marketable securities, providing flexibility for strategic opportunities [8][16] Future Outlook - Tilray revised its fiscal year 2025 guidance for net revenue to a range of $850 million to $900 million, with potential adjustments for constant currency and strategic initiatives totaling approximately $50 million [12][16] - The company is focused on leveraging advanced technologies, including AI and cryptocurrency, to enhance efficiency and drive growth across its operations [9][10]

Core Viewpoint - Atwater Brewing has launched Atwater Light, a low-calorie, low-carb beer aimed at beer enthusiasts in Michigan, reflecting the spirit of Detroit and the brewery's commitment to quality and community [1][4]. Product Details - Atwater Light contains 95 calories, 2.6 grams of carbs per 12 oz serving, and has an alcohol by volume (ABV) of 4.2% [2]. - The beer is crafted with German Noble hops and Vienna malt, providing a traditional flavor and refreshing drinking experience [2]. Brand and Community Connection - The packaging of Atwater Light features a map of Detroit, symbolizing hometown pride and the brewery's roots in the city [4]. - Carrie Shafir, Senior Brand Director at Tilray Beverages, emphasized the brewery's dedication to the hardworking people of Detroit and the importance of community in their brewing heritage [4]. Availability - Atwater Light is available at local retailers and all three Atwater Tap Rooms, with plans for additional formats such as draft and 16-oz cans [1][10]. Company Background - Atwater Brewery, founded in 1997, has a philosophy that hard work deserves quality beer, and offers a diverse portfolio of award-winning craft beers [5]. - The brewery aims to make beer approachable for all drinkers, with a variety of options catering to different tastes [5]. Parent Company Information - Tilray Brands, Inc. is a global lifestyle and consumer packaged goods company with operations across multiple regions, including cannabis and craft beverages [7]. - Tilray's mission is to inspire joy and create memorable experiences through its diverse range of brands and products [7].

Core Viewpoint - Atwater Brewing, a craft brewery in Detroit and part of Tilray Brands, has launched Atwater Light, a low-calorie and low-carb beer aimed at beer enthusiasts in Michigan [1][2]. Product Details - Atwater Light contains 95 calories, 2.6 grams of carbs per 12 oz serving, and has an alcohol by volume (ABV) of 4.2% [2]. - The beer is crafted with German Noble hops and Vienna malt, providing a traditional flavor and refreshing experience [2]. - It is available in multiple formats including 12-pack of 12-ounce cans, draft, and soon in 16-ounce cans [4]. Brand and Community Engagement - The design of Atwater Light's packaging features a map of Detroit, reflecting hometown pride and the brewery's connection to the local community [3]. - Carrie Shafir, Senior Brand Director at Tilray Beverages, emphasized the brewery's commitment to honoring Detroit's spirit and providing quality beer for the hardworking people of the city [3]. Company Background - Atwater Brewery was founded in 1997 and has a philosophy that emphasizes quality beer for hard work, with a diverse portfolio of award-winning craft beers [5]. - The brewery aims to make beer approachable for all drinkers, offering a variety of options for different tastes and occasions [5]. Parent Company Overview - Tilray Brands, Inc. is a global lifestyle and consumer packaged goods company with operations across multiple continents, focusing on cannabis, beverages, wellness, and entertainment [7]. - Tilray's mission is to be a leading premium lifestyle company with a diverse range of brands and innovative products [7].