Core Insights - Tilray Brands reported its fourth-quarter results for fiscal 2025, with earnings exceeding estimates but sales falling short, both declining compared to the previous year [1][10] - Adjusted EPS was 2 cents, down 50% year over year, while revenues decreased by 2% to $224.5 million, primarily due to weak performance in cannabis and beverages [2] - The company expects adjusted EBITDA for fiscal 2026 to be between $62 million and $72 million, indicating a growth of 13-31% over the prior year [3] Financial Performance - Fiscal 2025 revenues reached $821 million, a 4% increase year over year, largely driven by non-cannabis business diversification [4] - Non-cannabis segments accounted for approximately 70% of total sales, with beverages contributing 29%, distribution 33%, and wellness 8% [5] - Beverage sales rose 19% year over year to $240.6 million, despite SKU rationalization efforts [6] Market Position and Strategy - Tilray has established a strong presence in the hemp market, holding nearly 60% branded market share in the U.S. and 80% in Canada [7] - The company is focusing on enhancing its global supply chain and cultivation footprint to meet growing demand, with expectations of benefiting from Project 420 in the second half of fiscal 2026 [8] - The cannabis segment saw a 9% decline in revenues to $249 million, with international cannabis sales growing 19%, although still a small portion of total cannabis sales [11] Competitive Landscape - Tilray faces intense competition from peers like Aurora Cannabis, Canopy Growth, and Curaleaf Holdings, all pursuing international expansion and cost optimization [12] - The company's stock has dropped 56% year to date, contrasting with a 6% growth in the industry, reflecting ongoing financial challenges and uncertainty around U.S. marijuana legalization [13] Investment Considerations - While Tilray's diversification into craft beverages and THC drinks shows strategic foresight, the decline in its core cannabis business and competitive pressures remain significant near-term challenges [15]

Core Insights - Investor interest in cannabis stocks has decreased since the legalization boom of 2021, but Tilray Brands is positioning itself uniquely in the market [1] Financial Performance - Tilray ended fiscal 2025 with record revenue of $821 million, driven by its cannabis, beverage, and wellness divisions [2] - The company reported a headline GAAP loss of $2.1 billion for the year, primarily due to a non-cash goodwill write-down, but posted a modest adjusted profit and improved cannabis gross margins by 700 basis points [5] Business Strategy - Tilray is combining its cannabis, beverage, and wellness businesses, leveraging its U.S. distribution network from craft beer acquisitions to roll out hemp-derived THC drinks, which are available in 13 states at approximately 1,300 locations [3][4] - Unlike competitors, Tilray is the only scaled player integrating cannabis cultivation, beverage production, and wellness under one roof [4] Market Position and Opportunities - The company has a multi-pronged strategy that provides resilience against market fluctuations; if cannabis sales lag, it can rely on its beer portfolio and hemp drinks [6] - Future catalysts for Tilray include U.S. federal cannabis reform, state-level changes in THC beverage regulations, and potential further acquisitions in the craft beer sector, which could provide a first-mover advantage [7] Unique Selling Proposition - Tilray's approach to connecting cannabis, beverages, and wellness could differentiate it in the market, making it a company to watch for long-term investors [8]

Core Viewpoint - Tilray Brands, a leading cannabis company in North America, has seen its stock value decline significantly, losing 90% since 2022, despite recent rallies in its shares [1][2] Group 1: Business Overview - Tilray Brands has a valuation exceeding $600 million, but its stock has plummeted in recent years [1] - The company has diversified its operations, with its core cannabis business now accounting for only 30% of total revenue, while beverage and distribution businesses contribute 29% and 33% respectively [5][6] - For the fiscal year ending May 31, Tilray reported a 4% increase in revenue, reaching $821.3 million [6] Group 2: Growth Potential - The company is projecting adjusted EBITDA for the current fiscal year (ending May 31, 2026) to be between $62 million and $72 million, representing a growth of 13% to 31% from the previous year [7] - Tilray's strategy includes acquiring craft beer brands to expand its revenue streams, which has allowed it to grow despite the lack of U.S. cannabis legalization [4][8] Group 3: Challenges and Risks - Despite growth, Tilray has heavily relied on acquisitions, with its beverage segment experiencing a 14% decline in revenue year-over-year [8] - The company has not met its ambitious revenue targets, finishing the last fiscal year with less than $1 billion in annual revenue, despite earlier projections of reaching $4 billion by 2024 [9][10] - Tilray reported a net loss of nearly $1.3 billion last quarter, with significant impairment charges, indicating challenges in achieving profitability [11] Group 4: Investment Considerations - The stock trades below its book value, with a price-to-book ratio of about 0.4, which may attract long-term investors [7] - However, the overall trend for Tilray's stock has been declining, and without compelling growth opportunities beyond acquisitions, it may be prudent for investors to approach with caution [12][13]

Group 1 - The Cannabis Report is a monthly publication focused on the cannabis industry, providing insights and analysis [1] - The analyst has experience in technical stock analysis, option strategies, small cap strategies, and emerging markets within the cannabis sector [1] Group 2 - The analyst holds a beneficial long position in TLRY shares, indicating a personal investment interest in the company [2] - The article reflects the analyst's own opinions and is not influenced by compensation from any company mentioned [2]

Core Viewpoint - Tilray Brands Inc. (TLRY) experienced a significant drop of nearly 20% following the release of its adjusted EBITDA guidance for 2026, which is projected to reach between $62 million and $72 million [1] Group 1: Financial Performance - The adjusted EBITDA forecast is based on strong growth in the company's international cannabis business and strategic adjustments in its beverage segment [1] - The international cannabis division achieved record revenue, maintaining a leading position across multiple product categories in Canada [1] Group 2: Strategic Initiatives - The strategic transformation of the beverage segment is expected to result in significant cost savings [1]

Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information and not relied on as a formal investment recommendation. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommenda ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Tilray Brands, Inc. is a global consumer products company with four segments: Cannabis, Beverage, Distribution, and Wellness, focused on strategic acquisitions and global brand building - Tilray operates through four reportable segments: Beverage, Cannabis, Distribution, and Wellness, aiming to be a leading global lifestyle consumer products company[19](index=19&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) Net Revenue by Reportable Segment (Fiscal Years 2023-2025) | Segment | FY 2025 Net Revenue (in thousands USD) | FY 2024 Net Revenue (in thousands USD) | FY 2023 Net Revenue (in thousands USD) | | :--- | :--- | :--- | :--- | | Beverage business | $240,595 | $202,094 | $95,093 | | Cannabis business | $249,001 | $272,798 | $220,430 | | Distribution business | $271,228 | $258,740 | $258,770 | | Wellness business | $60,485 | $55,310 | $52,831 | | **Total net revenue** | **$821,309** | **$788,942** | **$627,124** | - The company's core strategy involves building global brands, developing innovative products, growing its beverage and hemp-food businesses, expanding international medical cannabis availability, and optimizing global operations for cost reduction[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - In fiscal year 2025, Tilray continued its expansion in the beverage sector by acquiring four craft beer brands and breweries from Molson Coors, designated as "Craft Acquisition II"[27](index=27&type=chunk)[29](index=29&type=chunk) [Our Company](index=6&type=section&id=Our%20Company) Tilray Brands, Inc. is a global consumer products company leading in Canadian cannabis and U.S. craft brewing, supplying medical cannabis internationally - Tilray is a leading global lifestyle consumer products company with operations in Canada, the U.S., Europe, Australia, and Latin America[19](index=19&type=chunk) - The company is the **4th largest craft brewer** in the U.S. and leads the Canadian cannabis market in revenue[20](index=20&type=chunk) [Our Strategy and Outlook](index=6&type=section&id=Our%20Strategy%20and%20Outlook) Tilray's strategy focuses on driving revenue and profitability through global brand building, product innovation, U.S. beverage expansion, and cost management - The company's strategy is to leverage its brands, infrastructure, and expertise to drive revenue, achieve profitability, and build long-term shareholder value[26](index=26&type=chunk) - A key strategic pillar is the growth and leverage of its U.S. beverage and hemp-based food businesses, which serve as a platform for potential entry into the U.S. cannabis market upon federal legalization[27](index=27&type=chunk) [Reportable Segments](index=8&type=section&id=Reportable%20Segments) Tilray's four segments—Beverage, Cannabis, Distribution, and Wellness—contributed to **$821.3 million** in FY2025 net revenue, with Distribution being the largest at **33%** Net Revenue by Segment (FY 2025) | Segment | Net Revenue (in thousands USD) | % of Total Revenue | | :--- | :--- | :--- | | Beverage business | $240,595 | 29% | | Cannabis business | $249,001 | 30% | | Distribution business | $271,228 | 33% | | Wellness business | $60,485 | 8% | | **Total** | **$821,309** | **100%** | Cannabis Revenue by Channel (FY 2025) | Channel | Revenue (in thousands USD) | % of Total Cannabis Revenue | | :--- | :--- | :--- | | Canadian medical | $24,998 | 10% | | Canadian adult-use | $224,048 | 91% | | Wholesale | $18,207 | 7% | | International | $63,356 | 25% | | Less excise taxes | ($81,608) | (33)% | | **Total** | **$249,001** | **100%** | [Beverage Segment](index=9&type=section&id=Beverage%20Segment) Tilray's Beverage segment, the **4th largest craft brewery** in the U.S., operates 7 facilities and 16 brewpubs, distributing diverse brands across all 50 states - Tilray is the **4th largest craft brewery** in the United States, with a portfolio including brands like SweetWater, Montauk, Shock Top, and Breckenridge Distillery[20](index=20&type=chunk)[33](index=33&type=chunk) - The segment operates **7 production facilities** and **16 brewpubs** across the U.S., producing a variety of craft brews, ciders, seltzers, and spirits[37](index=37&type=chunk) - Beverage brands are distributed in all **50 states** to nearly **50,000 off-premises retail locations** and over **30,000 on-premises restaurants and bars**[38](index=38&type=chunk) [Cannabis Segment](index=12&type=section&id=Cannabis%20Segment) Tilray's Cannabis segment supplies medical cannabis to **over 20 countries** and manages a diverse adult-use portfolio in Canada, facing intense competition and evolving regulations - Tilray supplies medical cannabis products to patients in **over 20 countries** across five continents, utilizing EU-GMP certified production facilities in Portugal and Germany[47](index=47&type=chunk)[59](index=59&type=chunk) - The company maintains a diverse portfolio of adult-use cannabis brands in Canada, segmented by consumer preference and price point, including Good Supply, Redecan, and Broken Coast[51](index=51&type=chunk)[54](index=54&type=chunk) - Distribution in Canada is managed through provincial/territorial agencies for adult-use products and a direct-to-patient online platform for medical cannabis[61](index=61&type=chunk)[63](index=63&type=chunk) - The company faces intense competition from approximately **1,000 licensed producers** in Canada and the persistent illicit market[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) [Distribution Segment](index=17&type=section&id=Distribution%20Segment) The Distribution segment, primarily CC Pharma, is a leading German pharmaceutical importer and distributor, also supporting Tilray's medical cannabis distribution - The segment is centered around CC Pharma, a leading drug importer in Germany that specializes in re-importing and distributing European pharmaceuticals[81](index=81&type=chunk) - CC Pharma distributes approximately **1,200 product lines** to public pharmacies, hospital pharmacies, and pharmaceutical wholesalers, and also supports Tilray's medical cannabis business in Germany[81](index=81&type=chunk)[84](index=84&type=chunk) [Wellness Segment](index=19&type=section&id=Wellness%20Segment) The Wellness segment, led by Manitoba Harvest, distributes hemp-based food products to **over 21,000 retail locations** in North America, subject to evolving U.S. regulations - The Wellness segment primarily consists of the Manitoba Harvest brand, which produces and distributes hemp-based food products sold in **over 21,000 retail locations** in the U.S. and Canada[87](index=87&type=chunk)[89](index=89&type=chunk) - The segment operates under U.S. regulations defined by the 2018 Farm Bill, which legalized hemp but preserved FDA authority over products containing hemp derivatives like CBD and THC[90](index=90&type=chunk)[91](index=91&type=chunk) [Environmental and Social](index=19&type=section&id=Environmental%20and%20Social) Tilray is committed to environmental sustainability through GHG emission monitoring and waste management, alongside social initiatives like community donations and health awareness campaigns - The company is committed to monitoring its greenhouse gas (GHG) emissions, promoting supply chain sustainability, and implementing waste management programs[94](index=94&type=chunk)[102](index=102&type=chunk) - Social initiatives include community hospital donations, support for veterans, and partnerships with organizations like the Waterkeeper Alliance, Soil Health Institute, and One Tree Planted[98](index=98&type=chunk)[99](index=99&type=chunk) [Employees and Human Capital Resources](index=21&type=section&id=Employees%20and%20Human%20Capital%20Resources) As of May 31, 2025, Tilray employed approximately **2,842 people** globally, with a human capital strategy focused on talent, health, safety, compensation, and engagement - As of May 31, 2025, Tilray employed approximately **2,842 people** worldwide[105](index=105&type=chunk) - The company's human capital management focuses on talent acquisition, health and safety, compensation and benefits, and employee engagement[106](index=106&type=chunk)[108](index=108&type=chunk) [AI and Cryptocurrency Business Strategy](index=21&type=section&id=AI%20and%20Cryptocurrency%20Business%20Strategy) Tilray is implementing AI in greenhouse operations to enhance efficiency and plans to accept cryptocurrency for online payments, exploring further strategic initiatives - The company is implementing AI in its global greenhouse operations to manage conditions in real-time, aiming to increase output and reduce costs[106](index=106&type=chunk) - Tilray plans to accept cryptocurrency as a payment method for its online operations and is exploring other strategic initiatives related to cryptocurrency[106](index=106&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) Tilray faces significant risks including evolving cannabis regulations, intense market competition, acquisition integration challenges, potential asset impairments, financial losses, and cryptocurrency market volatility - The cannabis business is highly dependent on regulatory approvals, licenses, and ongoing compliance, with risks related to evolving government regulations in the U.S. and other international markets[110](index=110&type=chunk)[115](index=115&type=chunk) - The company faces intense competition from the illicit cannabis market and other licensed producers, which could negatively impact business success[122](index=122&type=chunk)[125](index=125&type=chunk) - Significant financial risks include a history of net losses, potential for additional goodwill and intangible asset impairments, and the challenge of achieving or maintaining profitability[149](index=149&type=chunk)[151](index=151&type=chunk) - Ownership of the company's securities is subject to risks such as failure to meet Nasdaq's continued listing requirements, severe stock price volatility, and potential dilution from convertible securities and warrants[204](index=204&type=chunk)[207](index=207&type=chunk)[213](index=213&type=chunk) - The new cryptocurrency strategy introduces high risks due to market volatility and an evolving, uncertain regulatory landscape[220](index=220&type=chunk)[221](index=221&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[238](index=238&type=chunk) [Cybersecurity](index=44&type=section&id=Item%201C.%20Cybersecurity) Tilray manages cybersecurity through an enterprise-wide program overseen by the Board and CIO, with no material incidents reported to date - Cybersecurity risk is managed through an enterprise-wide framework that includes regular risk assessments, advanced access controls, employee training, and incident response protocols[239](index=239&type=chunk)[240](index=240&type=chunk) - Oversight is provided by the Board of Directors, with the Chief Information Officer (CIO) responsible for managing the cybersecurity program[242](index=242&type=chunk) - As of the report date, the company believes no cybersecurity threats have materially affected or are reasonably likely to materially affect its business, strategy, or financial condition[241](index=241&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) Tilray operates diverse owned and leased properties globally, including cannabis cultivation, craft breweries, hemp processing, and distribution facilities across its segments Principal Facilities by Location and Segment | Location | Segment | Primary Use | Ownership | | :--- | :--- | :--- | :--- | | Leamington, ON, Canada | Cannabis | Cultivation and Processing | Owned | | Gatineau, QC, Canada | Cannabis | Cultivation and Processing | Owned | | Atlanta, GA, USA | Beverage | Craft Brewery | Owned | | Littleton, CO, USA | Beverage | Brewery/Pub facility | Owned | | Portland, OR, USA | Beverage | Craft Brewery | Owned | | Cantanhede, Portugal | Cannabis | Cultivation and Processing | Owned | | Densborn, Germany | Distribution | Distribution Operations | Owned | [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including ongoing U.S. securities class actions, settled Canadian class actions, and contractual disputes - The information for this item is incorporated by reference from Note 28 of the Consolidated Financial Statements[248](index=248&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[249](index=249&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Tilray's common stock trades on Nasdaq and TSX under "TLRY", with no cash dividends paid, and recent issuances for convertible senior notes - The company's common stock is traded on the Nasdaq Global Select Market and the TSX under the symbol "TLRY"[251](index=251&type=chunk) - Tilray has not paid cash dividends and does not plan to in the foreseeable future, intending to use funds for operations and growth[252](index=252&type=chunk) - During fiscal 2025, the company issued an aggregate of **80,517,859 shares** of common stock in exchange for approximately **$55.6 million** in aggregate principal of its 5.20% Convertible Senior Notes due 2027[255](index=255&type=chunk)[256](index=256&type=chunk) Stock Performance Comparison (May 31, 2020 - May 31, 2025) | Period Ending | Tilray Brands, Inc. | Nasdaq Composite | Horizons Marijuana Life Sciences Index | | :--- | :--- | :--- | :--- | | May 31, 2020 | $100.00 | $100.00 | $100.00 | | May 31, 2021 | $172.39 | $144.88 | $154.83 | | May 31, 2022 | $45.58 | $127.31 | $60.29 | | May 31, 2023 | $16.95 | $136.31 | $30.33 | | May 31, 2024 | $18.27 | $176.35 | $31.88 | | May 31, 2025 | $4.37 | $201.41 | $21.95 | [Reserved](index=49&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2025, Tilray's net revenue grew **4% to $821.3 million**, but a **$2.1 billion** impairment charge led to a **$2.28 billion** operating loss, while the company focuses on strategic acquisitions and cost-saving initiatives Consolidated Results of Operations (Fiscal Years 2023-2025) | Metric (in thousands USD) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net revenue | $821,309 | $788,942 | $627,124 | | Gross profit | $240,570 | $223,351 | $146,960 | | Operating loss | ($2,282,705) | ($174,745) | ($1,369,685) | | Net loss | ($2,181,356) | ($222,404) | ($1,443,000) | | Adjusted EBITDA | $55,035 | $60,465 | $58,679 | - The significant increase in operating loss in FY2025 was primarily driven by a **$2.1 billion** non-cash impairment charge on intangible assets and goodwill[292](index=292&type=chunk)[320](index=320&type=chunk)[335](index=335&type=chunk) - The company is implementing "Project 420," a comprehensive plan for its beverage segment focused on SKU rationalization, geographic focus, distributor consolidation, and synergy optimization to improve profitability[287](index=287&type=chunk)[291](index=291&type=chunk) - The company is managing liquidity through an at-the-market (ATM) equity program, which generated net proceeds of **$161.2 million** in FY2025, to fund strategic acquisitions and capital expenditures[376](index=376&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Tilray is exposed to credit, liquidity, currency, and interest rate risks, with management considering liquidity risk low and not hedging currency exposure - The company's primary market risks are credit, liquidity, currency rate, and interest rate risk[388](index=388&type=chunk) - Credit risk stems from unsecured accounts receivable, with all cash held at major financial institutions[389](index=389&type=chunk) - Currency rate risk arises from significant operations in Canada and Europe, with financial assets and liabilities denominated in Canadian dollars and Euros[393](index=393&type=chunk) [Financial Statements and Supplementary Data](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Tilray's audited consolidated financial statements for FY2023-2025, including balance sheets, income statements, equity changes, and cash flows, with an independent auditor's report Key Balance Sheet Data (as of May 31) | Account (in thousands USD) | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $221,666 | $228,340 | | Total current assets | $688,626 | $677,710 | | Goodwill | $752,350 | $2,008,884 | | Intangible assets | $21,423 | $915,469 | | **Total assets** | **$2,074,327** | **$4,221,665** | | **Liabilities & Equity** | | | | Total current liabilities | $280,303 | $299,170 | | Total liabilities | $584,752 | $778,487 | | **Total stockholders' equity** | **$1,489,575** | **$3,443,178** | Key Income Statement Data (for the year ended May 31) | Account (in thousands USD) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net revenue | $821,309 | $788,942 | $627,124 | | Gross profit | $240,570 | $223,351 | $146,960 | | Impairment of intangible assets and goodwill | $2,096,139 | $0 | $934,000 | | Operating loss | ($2,282,705) | ($174,745) | ($1,369,685) | | Net loss | ($2,181,356) | ($222,404) | ($1,443,000) | | Net loss per share - basic & diluted | ($2.46) | ($0.33) | ($2.35) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=133&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[655](index=655&type=chunk) [Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that Tilray's disclosure controls and internal control over financial reporting were effective as of May 31, 2025, excluding recent acquisitions from the initial assessment - Management concluded that disclosure controls and procedures were effective as of May 31, 2025[657](index=657&type=chunk) - Management concluded that internal control over financial reporting was effective as of May 31, 2025[661](index=661&type=chunk) - The evaluation of internal controls excluded the recently acquired "Craft Acquisition II" from Molson Coors, which represented **0.9% of total assets** and **3% of net revenue** for the fiscal year[663](index=663&type=chunk) [Other Information](index=134&type=section&id=Item%209B.%20Other%20Information) Key events include a credit facility refinancing, a Nasdaq non-compliance notice regarding bid price, and Board-approved retention payments for key executives - On March 25, 2025, the company received a notice from Nasdaq for failing to meet the minimum **$1.00 bid price** requirement and has **180 days** to regain compliance[666](index=666&type=chunk) - On July 24, 2025, the Board approved retention payments for key executives, including **$950,000** for CEO Irwin Simon, contingent on continued employment through August 31, 2026[667](index=667&type=chunk)[668](index=668&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=134&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports no issues under this item - None[669](index=669&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=135&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[671](index=671&type=chunk)[672](index=672&type=chunk)[675](index=675&type=chunk) [Executive Compensation](index=135&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation and equity compensation plans is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[671](index=671&type=chunk)[673](index=673&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=135&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by beneficial owners and management, and equity compensation plans, is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[671](index=671&type=chunk)[674](index=674&type=chunk)[675](index=675&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=135&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[671](index=671&type=chunk)[674](index=674&type=chunk)[675](index=675&type=chunk) [Principal Accounting Fees and Services](index=135&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[671](index=671&type=chunk)[674](index=674&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=136&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including an Exhibit Index of corporate governance documents, material contracts, and certifications - Financial Statement Schedules have been omitted because the required information is not applicable or is included in the financial statements or notes[676](index=676&type=chunk) - The Exhibit Index lists all documents filed as part of the report, including the Certificate of Incorporation, Bylaws, Indentures for convertible notes, employment agreements, and various certifications[677](index=677&type=chunk)[679](index=679&type=chunk)[681](index=681&type=chunk) [Form 10-K Summary](index=141&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary under this item - None[686](index=686&type=chunk)

Core Viewpoint - Tilray Brands, Inc. reported quarterly earnings of $0.02 per share, surpassing the Zacks Consensus Estimate of a loss of $0.03 per share, marking an earnings surprise of +166.67% [1] - The company posted revenues of $224.54 million for the quarter ended May 2025, which was 6.46% below the Zacks Consensus Estimate and a decrease from $229.88 million year-over-year [2] Financial Performance - The earnings report indicates a significant improvement from a loss of $0.04 per share a year ago [1] - Over the last four quarters, Tilray Brands has exceeded consensus EPS estimates twice, but has not beaten revenue estimates during the same period [2] Stock Performance - Tilray Brands shares have declined approximately 48.2% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current Zacks Rank for Tilray Brands is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $209.71 million, and for the current fiscal year, it is -$0.17 on revenues of $885.29 million [7] - The outlook for the Medical - Products industry, to which Tilray Brands belongs, is currently in the bottom 30% of Zacks industries, which may negatively impact stock performance [8]

Financial Data and Key Metrics Changes - Tilray achieved record annual revenue of $821 million, a 4% increase year over year on a constant currency basis, and $834 million, a 6% increase year over year [7][36] - The company reported a gross profit of $241 million, an 8% increase year over year, and the highest gross margin at 29%, up from 28% in the prior year [8][42] - A net loss for fiscal year 2025 increased to $2.2 billion, or $2.46 per share, compared to a loss of approximately $220 million in the prior year [43][44] Business Line Data and Key Metrics Changes - International cannabis revenue reached $22.4 million in Q4, up 71% year over year, with a full year growth of approximately 20% [7][13] - The Canadian cannabis revenue totaled $186 million, with a market share of 9.3% in the adult recreational segment [18][19] - Beverage revenue increased by 19% year over year, but was impacted by SKU rationalization, resulting in a revenue reduction of $20 million [25][40] Market Data and Key Metrics Changes - The international cannabis business saw significant growth, particularly in Germany, where revenue grew 134% year over year in Q4 [14][17] - The Canadian market is stabilizing, with more retail stores opening and consumers shifting from the illicit market [66][67] - The wellness segment reported net revenue of over $60 million, representing a 9% growth year over year [31][32] Company Strategy and Development Direction - The company is focused on solidifying its global leadership in cannabis and expanding its beverage and wellness business through innovation and strategic acquisitions [6][11] - Tilray aims to strengthen its balance sheet through further strategic debt restructuring in fiscal year 2026 [8][48] - The company is well-positioned to expand its market share across Europe, supported by vertically integrated operations and EU GMP cultivation facilities [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, despite the non-cash impairment charges, emphasizing confidence in the intrinsic value of assets and long-term strategy [10][45] - The company anticipates continued growth in international markets and is focused on addressing regulatory challenges to capitalize on opportunities [73][76] - Management highlighted the potential for regulatory reforms in Canada that could enhance market conditions and reduce excise taxes [67][68] Other Important Information - The company has reduced its debt by approximately $100 million and improved its net debt to EBITDA ratio to 0.3 times from 1.7 last year [8][48] - The beverage segment is undergoing a transition with the integration of craft brands and a focus on operational optimization [24][27] Q&A Session Summary Question: What is the current status of import rights and delays? - Management indicated that issues with legal permits in Portugal are being resolved, and they expect to see a pickup in shipments within the first and second quarters [61][62] Question: How is the Canadian market evolving? - Management noted that the Canadian market is stabilizing with more retail stores opening and consumers increasingly purchasing from legal sources rather than the illicit market [65][66] Question: What are the growth expectations for international markets next year? - Management highlighted that there are significant opportunities in Europe and other international markets, with plans for substantial growth built into their strategy [75][76]

Financial Data and Key Metrics Changes - Tilray achieved record annual revenue of $821 million, a 4% increase year over year on a constant currency basis, and $834 million, a 6% increase year over year [7][34] - The company reported a gross profit of $241 million, an 8% increase year over year, and the highest gross margin at 29%, up from 28% in the prior year [8][40] - A net loss for fiscal year 2025 increased to $2.2 billion, or $2.46 per share, compared to a loss of approximately $220 million in the prior year [41][50] Business Line Data and Key Metrics Changes - International cannabis revenue reached $22.4 million in Q4, up 71% year over year, with a full year growth of approximately 20% [7][14] - The beverage segment reported net revenue of $65.6 million in Q4, a 19% year-over-year increase, although impacted by SKU rationalization initiatives [24][38] - Wellness revenue grew by 9% to over $60 million, driven by the expansion of the Manitoba Harvest brand and new product innovations [29][30] Market Data and Key Metrics Changes - In Canada, Tilray maintained a 9.3% market share in the adult recreational segment, with a total cannabis revenue of $186 million for the fiscal year [18][12] - The international cannabis business showed significant growth, particularly in Germany, where revenue grew by 134% year over year in Q4 [15][12] - The U.S. beverage division generated approximately $240 million in sales, with a focus on expanding market share in the non-alcoholic beverage sector [13][28] Company Strategy and Development Direction - The company is focused on solidifying its global leadership in cannabis and expanding its beverage and wellness business through innovation and strategic acquisitions [6][12] - Tilray aims to strengthen its balance sheet through strategic debt restructuring and has reduced its net debt to EBITDA ratio to 0.3 times from 1.7 last year [9][41] - The company is optimistic about future growth opportunities in international markets, particularly in Europe and emerging markets [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy despite recent non-cash impairment charges, emphasizing the intrinsic value of tangible assets and brand equity [11][43] - The Canadian cannabis market is stabilizing, with expectations of regulatory reforms that could enhance market conditions [17][65] - Management anticipates continued growth in international cannabis markets, particularly in Germany, Poland, and the UK, with significant plans for expansion [70][72] Other Important Information - The company implemented strategic initiatives that impacted revenue by approximately $35 million due to decisions aimed at enhancing margins and profitability [7][35] - The beverage business faced challenges due to softer consumer demand and unexpected distribution headwinds, but corrective actions are being taken to improve performance [24][26] - Tilray's wellness segment is expected to expand further in fiscal year 2026, focusing on better-for-you functional foods and beverages [31][30] Q&A Session Summary Question: What is the current status of importing rights and delays? - Management indicated that legal issues in Portugal are being resolved, and they expect to start shipping products soon, with an estimated $8 million in sales impacted by trapped shipments [60][61] Question: Can you elaborate on the Canadian market's equilibrium and price pressures? - Management noted that the Canadian market is stabilizing with more retail stores opening, leading to increased consumer preference for legal cannabis over illicit products, and potential regulatory changes could further enhance market conditions [63][65] Question: How should growth in international markets be viewed for next year? - Management expressed optimism about international growth, particularly in Germany and other European markets, with significant plans for expansion and a focus on medical cannabis [70][72]