Tilray(TLRY) - 2026 Q1 - Quarterly Results

Q1 Fiscal Year 2026 Performance Overview Tilray Brands reported strong first quarter fiscal 2026 results, achieving record net revenue and net income, driven by operational efficiencies and a focus on profitability Headline Summary Tilray Brands reported strong first quarter fiscal 2026 results, achieving record net revenue and net income, driven by operational efficiencies and a focus on profitability Q1 FY2026 Performance Overview | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net Revenue | $210 million | $200 million | +$10 million | +5% | | Net Income | $1.5 million | $(34.7) million | +$36.2 million | +104% | | Adjusted EBITDA | $10 million | $9.3 million | +$0.7 million | +9% | | Net Cash Used in Operations| $(1.3) million | $(35.3) million | +$34 million | -96% (Improvement) | | Cash Balance | $265 million | - | - | - | | Net Debt | $4 million | - | Reduced | - | - Canadian Adult-Use Cannabis Gross Revenue increased 12%, maintaining the 1 position in revenue and expanding market share[1] - International Cannabis Revenue grew 10% year-over-year[1] - Reiterated Fiscal Year 2026 Adjusted EBITDA Outlook of $62 Million – $72 Million[1] CEO Commentary CEO Irwin D. Simon highlighted the effectiveness of Tilray's strategic vision and disciplined execution, emphasizing record Q1 net revenue, net income, and a fortified balance sheet as proof points of sustainable growth and operational excellence - Record Q1 net revenue of $210 million, delivering net income, and fortifying the balance sheet are proof points of commitment to sustainable growth, operational excellence, and unlocking shareholder value[2] - Confidence in Tilray's ability to seize transformative opportunities, especially with the U.S. exploring cannabis rescheduling and the evolving European cannabis landscape[2] - Tilray's global platform, proven expertise in medical and adult-use cannabis, and trusted partnerships position it as a leader in the global cannabis, beverage, and wellness sectors[2] Financial Highlights Tilray Brands demonstrated significant financial improvements in Q1 FY2026, particularly in profitability, with a shift from net loss to net income and a substantial increase in adjusted EBITDA, alongside improved cash flow from operations Key Consolidated Financial Metrics Tilray Brands demonstrated significant financial improvements in Q1 FY2026, particularly in profitability, with a shift from net loss to net income and a substantial increase in adjusted EBITDA, alongside improved cash flow from operations Consolidated Financial Performance (Q1 FY2026 vs. Q1 FY2025) (in millions of US dollars) | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net Revenue | $209.5 million | $200.0 million | +$9.5 million | +5% | | Gross Profit | $57.5 million | $59.7 million | $(2.2) million | (4)% | | Gross Margin | 27% | 30% | (3) ppts | - | | Net Income (Loss) | $1.5 million | $(34.7) million | +$36.2 million | +104% | | Adjusted Net Income (Loss) | $3.9 million | $(6.1) million | +$10.0 million | +165% | | Adjusted EBITDA | $10.2 million | $9.3 million | +$0.9 million | +9% | | Cash Used in Operations | $(1.3) million | $(35.3) million | +$34.0 million | -96% (Improvement) | Balance Sheet Update Tilray Brands successfully reduced its total outstanding debt in Q1 FY2026, leading to a significantly improved net debt to adjusted EBITDA ratio and maintaining a strong cash balance for strategic flexibility - Total outstanding debt reduced by $7.7 million in the first quarter[5] - Net debt to trailing twelve months adjusted EBITDA ratio reduced to 0.07x[5] - Cash balance of $264.8 million provides flexibility for strategic opportunities[5] About Tilray Brands Tilray Brands is a global lifestyle and consumer packaged goods company operating across Canada, the U.S., Europe, Australia, and Latin America, leading in the cannabis, beverage, wellness, and entertainment sectors Company Overview Tilray Brands is a global lifestyle and consumer packaged goods company operating across Canada, the U.S., Europe, Australia, and Latin America, leading in the cannabis, beverage, wellness, and entertainment sectors - Tilray Brands is a leading global lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America[7] - The company is a transformative force at the nexus of cannabis, beverage, wellness, and entertainment[7] - Tilray's platform supports over 40 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages[7] Use of Non-GAAP Financial Measures Tilray Brands utilizes several non-GAAP financial measures, such as Adjusted gross margin, Adjusted EBITDA, and Adjusted net income, to provide investors with additional insights into operational trends and period-over-period comparisons Non-GAAP Definitions and Rationale Tilray Brands utilizes several non-GAAP financial measures, such as Adjusted gross margin, Adjusted EBITDA, and Adjusted net income, to provide investors with additional insights into operational trends and period-over-period comparisons - Non-GAAP measures provide useful additional information to investors about current trends and are useful for period-over-period comparisons, but should not be considered in isolation or as a substitute for GAAP measures[13] - Key non-GAAP measures include Adjusted gross margin, Adjusted gross profit, Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, adjusted free cash flow, constant currency presentations of revenue, cash and marketable securities, net debt, and net debt to adjusted EBITDA[13] - The company is unable to reconcile certain forward-looking non-GAAP measures to GAAP without unreasonable efforts due to the unpredictability of certain impacting items[14] Consolidated Financial Statements This section presents Tilray's consolidated financial statements, including the statements of financial position, net income (loss), and cash flows, providing a comprehensive overview of the company's financial health and performance Consolidated Statements of Financial Position Tilray's balance sheet as of August 31, 2025, shows an increase in total assets and stockholders' equity compared to May 31, 2025, primarily driven by higher cash and cash equivalents, while total liabilities decreased Key Balance Sheet Items (in thousands of US dollars) | Metric | August 31, 2025 | May 31, 2025 | Change | | :-------------------------- | :-------------- | :----------- | :----- | | Cash and cash equivalents | $264,828 | $221,666 | +$43,162 | | Total current assets | $701,140 | $688,626 | +$12,514 | | Total assets | $2,082,646 | $2,074,327 | +$8,319 | | Total current liabilities | $267,632 | $280,303 | $(12,671) | | Total liabilities | $561,988 | $584,752 | $(22,764) | | Total stockholders' equity | $1,520,658 | $1,489,575 | +$31,083 | Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) For Q1 FY2026, Tilray reported a significant turnaround from a net loss to a net income, driven by increased net revenue and a substantial reduction in total operating expenses, particularly amortization and changes in fair value of contingent consideration Condensed Consolidated Statements of Net Income (Loss) (in thousands of U.S. dollars) | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :---------------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net revenue | $209,501 | $200,044 | +$9,457 | +5% | | Cost of goods sold | $152,032 | $140,338 | +$11,694 | +8% | | Gross profit | $57,469 | $59,706 | $(2,237) | (4)% | | Total operating expenses | $55,377 | $96,276 | $(40,899) | (42)% | | Operating income (loss) | $2,092 | $(36,570) | +$38,662 | (106)% | | Net income (loss) | $1,513 | $(34,652) | +$36,165 | (104)% | | Net loss per share - basic & diluted| $(0.00) | $(0.04) | +$0.04 | (100)% | - Amortization expense decreased significantly by $17.9 million (82%) year-over-year[28] - Change in fair value of contingent consideration resulted in a $15.0 million income in Q1 FY2026, compared to zero in the prior year[28] Condensed Consolidated Statements of Cash Flows Tilray significantly improved its cash flow from operations, reducing cash used by 96% year-over-year, with investing activities shifting from a net use to a net provision of cash, primarily due to marketable securities disposal Condensed Consolidated Statements of Cash Flows (in thousands of US dollars) | Activity | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :-------------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net cash used in operating activities | $(1,341) | $(35,307) | +$33,966 | (96)% (Improvement) | | Net cash provided by (used in) investing activities | $24,467 | $(49,395) | +$73,862 | (150)% | | Net cash provided by financing activities | $19,848 | $60,590 | $(40,742) | (67)% | | Net increase (decrease) in cash and cash equivalents | $43,162 | $(23,154) | +$66,316 | (286)% | | Cash and cash equivalents, end of period | $264,828 | $205,186 | +$59,642 | +29% | - The significant improvement in investing activities was largely due to $34.7 million in proceeds from the disposal of marketable securities in Q1 FY2026, compared to a $42.7 million purchase in Q1 FY2025[30] Segmental Revenue Performance This section details Tilray's net revenue breakdown by operating segment and cannabis market channel, highlighting key growth drivers and market share dynamics Net Revenue by Operating Segment Tilray's total net revenue increased by 5% year-over-year, with growth primarily driven by the Distribution and Cannabis segments, while the Beverage segment remained relatively stable Net Revenue by Operating Segment (in thousands of U.S. dollars) | Segment | Q1 FY2026 (Aug 31, 2025) | % of Total Revenue (2025) | Q1 FY2025 (Aug 31, 2024) | % of Total Revenue (2024) | Change (YoY) | % Change (YoY) | | :---------------- | :----------------------- | :------------------------ | :----------------------- | :------------------------ | :----------- | :------------- | | Beverage business | $55,739 | 27% | $55,972 | 28% | $(233) | (0.4)% | | Cannabis business | $64,511 | 31% | $61,249 | 31% | +$3,262 | +5% | | Distribution business | $74,007 | 35% | $68,071 | 34% | +$5,936 | +9% | | Wellness business | $15,244 | 7% | $14,752 | 7% | +$492 | +3% | | Total net revenue | $209,501 | 100% | $200,044 | 100% | +$9,457 | +5% | - In constant currency, total net revenue was $204.8 million, indicating a slight negative foreign exchange impact on reported revenue[32] Net Cannabis Revenue by Market Channel Canadian adult-use cannabis revenue was the primary driver of growth within the cannabis segment, increasing by 12% year-over-year and significantly expanding its share of total cannabis revenue Net Cannabis Revenue by Market Channel (in thousands of U.S. dollars) | Channel | Q1 FY2026 (Aug 31, 2025) | % of Total Cannabis Revenue (2025) | Q1 FY2025 (Aug 31, 2024) | % of Total Cannabis Revenue (2024) | Change (YoY) | % Change (YoY) | | :-------------------------- | :----------------------- | :--------------------------------- | :----------------------- | :--------------------------------- | :----------- | :------------- | | Canadian medical cannabis | $6,146 | 10% | $6,261 | 10% | $(115) | (2)% | | Canadian adult-use cannabis | $64,067 | 99% | $57,235 | 94% | +$6,832 | +12% | | Wholesale cannabis | $4,155 | 6% | $5,507 | 9% | $(1,352) | (25)% | | International cannabis | $13,367 | 21% | $12,191 | 20% | +$1,176 | +10% | | Less excise taxes | $(23,224) | (36)% | $(19,945) | (33)% | $(3,279) | +16% | | Total | $64,511 | 100% | $61,249 | 100% | +$3,262 | +5% | - In constant currency, Canadian adult-use cannabis revenue was $64.4 million, showing consistent growth[34] Reconciliations and Key Operating Metrics This section provides reconciliations for non-GAAP financial measures such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow, offering deeper insights into Tilray's operational performance Gross Margin and Adjusted Gross Margin Consolidated gross margin decreased slightly year-over-year, primarily due to declines in Beverage, Cannabis, and Distribution segments, with Adjusted gross margin showing similar trends Gross Margin and Adjusted Gross Margin by Segment | Segment | Gross Margin Q1 FY2026 | Gross Margin Q1 FY2025 | Adjusted Gross Margin Q1 FY2026 | Adjusted Gross Margin Q1 FY2025 | | :---------------- | :--------------------- | :--------------------- | :------------------------------ | :------------------------------ | | Beverage | 38% | 41% | 38% | 41% | | Cannabis | 36% | 40% | 36% | 40% | | Distribution | 11% | 12% | 11% | 12% | | Wellness | 32% | 32% | 32% | 32% | | Total | 27% | 30% | 27% | 30% | - Purchase price accounting step-up adjustment was $175 thousand in Q1 FY2025, impacting adjusted gross profit[37] Adjusted EBITDA Reconciliation Tilray's Adjusted EBITDA increased by 9% year-over-year, reaching $10.2 million, primarily due to the significant improvement in net income and reduced amortization and restructuring costs Adjusted EBITDA (in thousands of U.S. dollars) | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net income (loss) | $1,513 | $(34,652) | +$36,165 | (104)% | | Amortization | $15,561 | $31,814 | $(16,253) | (51)% | | Change in fair value of contingent consideration | $(15,000) | $0 | $(15,000) | NM | | Restructuring costs | $869 | $4,247 | $(3,378) | (80)% | | Adjusted EBITDA | $10,181 | $9,334 | +$847 | +9% | Adjusted Net Income (Loss) Per Share Reconciliation Tilray achieved a positive Adjusted Net Income of $3.9 million in Q1 FY2026, a significant improvement from a loss in the prior year, resulting in a positive Adjusted Net Income per share Adjusted Net Income (Loss) Per Share (in thousands of U.S. dollars) | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :---------------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net loss attributable to stockholders of Tilray Brands, Inc. | $(322) | $(39,165) | +$38,843 | (99)% | | Amortization | $15,561 | $31,814 | $(16,253) | (51)% | | Change in fair value of contingent consideration | $(15,000) | $0 | $(15,000) | NM | | Adjusted net income (loss) | $3,935 | $(6,082) | +$10,017 | (165)% | | Adjusted net income (loss) per share - basic and diluted | $0.00 | $(0.01) | +$0.01 | (100)% | Adjusted Free Cash Flow Reconciliation Tilray significantly improved its adjusted free cash flow, reducing the cash outflow by 88% year-over-year, primarily driven by the substantial improvement in net cash used in operating activities Adjusted Free Cash Flow (in thousands of U.S. dollars) | Metric | Q1 FY2026 (Aug 31, 2025) | Q1 FY2025 (Aug 31, 2024) | Change (YoY) | % Change (YoY) | | :-------------------------------- | :----------------------- | :----------------------- | :----------- | :------------- | | Net cash used in operating activities | $(1,341) | $(35,307) | +$33,966 | (96)% (Improvement) | | Investments in capital and intangible assets, net | $(9,230) | $(6,708) | $(2,522) | +38% | | Free cash flow | $(10,571) | $(42,015) | +$31,444 | (75)% (Improvement) | | Add: growth CAPEX | $3,009 | $2,540 | +$469 | +18% | | Add: cash paid for litigation settlements | $2,804 | $0 | +$2,804 | NM | | Adjusted free cash flow | $(4,758) | $(39,475) | +$34,717 | (88)% (Improvement) | Cautionary Statement Concerning Forward-Looking Statements This section outlines the nature of forward-looking statements, which involve intentions, beliefs, and expectations about future events, and highlights that actual results may differ materially due to various risks and uncertainties Forward-Looking Statements Overview This section outlines the nature of forward-looking statements, which involve intentions, beliefs, and expectations about future events, and highlights that actual results may differ materially due to various risks and uncertainties - Forward-looking statements are identified by words like 'forecast,' 'future,' 'should,' 'could,' 'believe,' 'anticipate,' 'expect,' 'intend,' 'may,' 'project,' 'will,' 'would' and similar expressions[9] - These statements include expectations regarding becoming a leading lifestyle CPG company, achieving long-term profitability, operational scale, market share, revenue growth, margin improvements, fiscal year 2026 financial guidance (including Adjusted EBITDA), opportunities in the U.S. cannabis market, and leveraging AI strategies[10] - Many factors could cause actual results to differ materially from forward-looking statements, and the company does not undertake to publicly update them unless required by law[11][12] Corporate Information This section provides details on the Q1 FY2026 financial results webcast and contact information for investor relations and media inquiries Live Audio Webcast Tilray Brands hosted a live audio webcast to discuss its Q1 FY2026 financial results, with a replay available on the company's investor relations website - Webcast held on October 09, 2025, at 8:30 a.m. Eastern Time[6] - Available on the Events & Presentations section of Tilray's Investor Relations website, with a replay archived on the Company's website[6] Contacts Contact information for investor relations and media inquiries is provided - Investor Relations: investors@tilray.com, Pro-TLRY@prosek.com[24] - Media: news@tilray.com[24]