Financial Data and Key Metrics Changes - Net revenue increased by 17% to $98 million, with global medical cannabis revenue rising by 37% and international revenue growing by 85% [6][18] - Adjusted gross margin improved by 1,000 basis points to 52%, benefiting from higher cannabis margins [6][17] - Adjusted EBITDA more than doubled to $11 million, with positive free cash flow of $9 million [7][22] Business Line Data and Key Metrics Changes - Medical cannabis net revenue rose by 37% to $64.8 million, comprising 66% of total net revenue [18][19] - Consumer cannabis net revenue decreased to $7.9 million, down from $11.5 million, as the focus shifted to higher-margin medical cannabis [19] - Plant propagation net revenue increased by 4% to $23.9 million, marking a record quarter for the company [20] Market Data and Key Metrics Changes - Aurora holds a leading market position in Canada, Australia, Germany, Poland, and the UK, with significant growth opportunities in these regions [7][10] - The Australian market is growing rapidly, with Aurora holding the number two market share [10] - In Germany, the descheduling in April 2024 has led to increased patient registrations and higher prescription volumes [12] Company Strategy and Development Direction - The company aims to capitalize on the global medical cannabis market, projected to exceed $5 billion, particularly in Europe and Australia [26] - Aurora has built strong competitive barriers through scientific expertise and regulatory navigation, focusing on premium product offerings [26] - The company is investing in new cultivation technology and establishing third-party partnerships to optimize production [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential regulatory changes in Germany, emphasizing the company's preparedness [12][52] - The company anticipates continued strong performance in Q2, with expected year-over-year revenue growth driven by the global medical cannabis segment [23][47] - Management highlighted the importance of maintaining high-quality products to succeed in competitive markets [57] Other Important Information - The company ended the quarter with $186 million in cash and cash equivalents, with no debt in its cannabis operations [22] - Adjusted SG&A expenses increased by 19% to $37.4 million, reflecting higher selling and distribution costs [21] Q&A Session Summary Question: Higher SG&A expenses and future expectations - Management explained that SG&A expenses are variable costs tied to revenue growth, with some one-time costs related to the integration of Med Relief Australia [31][33] Question: Competition in Europe and margin structure - Management acknowledged increased competition in Europe but emphasized Aurora's established market position and ability to navigate regulatory challenges [35][36] Question: Vivo liabilities and audit process - Management clarified that the movement of Vivo's liabilities to current is an accounting treatment and does not impact the audit process [43][45] Question: Q2 guidance on adjusted EBITDA - Management expects positive adjusted EBITDA in Q2, with growth compared to Q1 [47] Question: Regulatory changes in Germany - Management indicated that potential regulatory changes in Germany would likely be clearer by the end of the year, with a focus on maintaining a strong market position [51][52] Question: Market conditions in Poland - Management confirmed that demand and sales in Poland have returned to previous levels, with a focus on high-quality products [57][58] Question: Supply chain and third-party purchases - Management stated that 90% of production is GMP certified, with ongoing investments in facilities to increase yield and potency [63][64] Question: Opportunities for vertical integration - Management discussed the potential for downstream integration and partnerships with clinics and distributors, emphasizing the importance of product quality [68][70]