Tilray(US:TLRY)2026-01-08 22:03Market Position and Revenue - Tilray led the Canadian cannabis market with the highest revenue, holding a market share of 9.3%, down from 9.4% in the previous quarter[110]. - Net revenue for the three months ended November 30, 2025, was $217.5 million, representing a 3% increase compared to $210.9 million in the same period of 2024[138]. - Total net revenue for the six months ended November 30, 2025, was $427.0 million, a 4% increase from $411.0 million in the same period last year[148]. - Cannabis business revenue increased by 3% to $67.5 million for the three months ended November 30, 2025, compared to $65.7 million in the prior year[148]. - Distribution segment net revenue increased to $85.3 million for the three months ended November 30, 2025, compared to $67.6 million in the prior year, reflecting a 26% growth[148]. - Total cannabis revenue for the six months ended November 30, 2025, was $177.9 million, a 6% increase from $168.4 million in the prior year[1]. Product Innovation and Expansion - The company launched several innovative products, including Mock One non-alcoholic spirits and Mountain Shot flavored whiskey, to cater to evolving consumer preferences[109]. - The company has received additional product authorizations in Italy, expanding its medical cannabis offerings and forming a strategic partnership with Molteni Farmaceutici[122]. - Tilray's international business benefits from its vertically-integrated infrastructure, including EU-GMP cultivation facilities in Portugal and Germany, supporting its global market presence[114]. - The cannabis market in Europe is evolving, with over 19 countries legalizing medical cannabis, representing a population of more than 477 million[113]. - The company expects to leverage its compliance infrastructure to expand responsibly in the U.S. cannabis market, introducing medical-grade products[134]. Financial Performance and Cost Management - Gross profit for the six months ended November 30, 2025, was $115.0 million, a decrease of 5% from $120.9 million in the prior year[138]. - Operating expenses for the three months ended November 30, 2025, increased by 11% to $51.2 million compared to $46.0 million in the same period of 2024[138]. - The company achieved $27.2 million in savings from a $33 million synergy optimization plan as of November 30, 2025, with completion expected in Q4 of fiscal 2026[132]. - The company has exited certain businesses that were dilutive to profitability and cash flow, continuing to evaluate its portfolio[128]. - Total operating expenses for the three months ended November 30, 2025, were $79,776,000, a decrease of 23% compared to $103,438,000 in the prior year[168]. Cash Flow and Financial Position - Cash and marketable securities as of November 30, 2025, totaled $291,551,000, an increase from $252,249,000 as of November 30, 2024[146]. - Working capital as of November 30, 2025, was $470,002,000, compared to $428,815,000 as of November 30, 2024[146]. - Cash flows from operating activities showed a reduction in net cash used, amounting to $(8.5) million for the three months ended November 30, 2025, compared to $(40.7) million in the prior year[203]. - Cash provided by financing activities was $48.1 million for the three months ended November 30, 2025, an increase from $38.2 million in the prior year[205]. - The company is focused on generating positive cash flow from operations and aims to be free cash flow positive[197]. Market Challenges and Strategic Adjustments - The company anticipates ongoing price compression in the Canadian cannabis market due to intense competition among approximately 1,000 licensed producers[112]. - The decline in beverage revenue was attributed to challenges in the craft beer segment and competitive pressures[149]. - The company plans to reduce its distributor footprint from over 750 to between 450 and 500 to concentrate efforts on its brands and SKUs[131]. - The company has implemented Project 420 to support the growth of acquired beverage brands, focusing on SKU optimization, geographic rationalization, distributor rationalization, and synergy optimization[131]. Segment Performance - Beverage segment net revenue decreased to $50.1 million for the three months ended November 30, 2025, down 21% from $63.1 million in the prior year[149]. - Wellness segment net revenue remained consistent at $14.6 million for the three months ended November 30, 2025, compared to the prior year[9]. - Cannabis segment net revenue for the three months ended November 30, 2025, was $67,532,000, an increase of 3% compared to $65,652,000 in the prior year[164]. - Distribution segment gross margin for the three months ended November 30, 2025, was 13%, an increase from 12% in the prior year[165]. Stock and Shareholder Information - A reverse stock split was implemented on December 2, 2025, at a ratio of one-for-ten, with no fractional shares issued[135]. - The company issued 6,777,224 shares under the ATM Program, generating net proceeds of $73.1 million for strategic acquisitions and investments[199].