Tilray Brands (NasdaqGS:TLRY) Q2 2026 Earnings Call January 08, 2026 04:30 PM ET Company ParticipantsBerrin Noorata - Chief Corporate Affairs and Communications OfficerAaron Grey - Managing DirectorBill Kirk - Managing DirectorFrederico Gomes - DirectorIrwin Simon - Chairman and CEOPablo Zuanic - Managing PartnerCarl Merton - CFOConference Call ParticipantsVictor Ma - AnalystOperatorThank you for joining today's conference call to discuss Tilray Brands' financial results for the second quarter fiscal year 2 ...

Financial Data and Key Metrics Changes - The company reported a record Q2 net revenue of $218 million, with an adjusted EBITDA of $8.4 million and a reported EPS loss of $0.02, reflecting a significant improvement in performance metrics [4][22]. - The net loss for the quarter was $43.5 million, a 49% improvement year-over-year compared to $85.3 million, with cash flow used in operations reduced to $8.5 million from $40.7 million last year [27][28]. Business Line Data and Key Metrics Changes - Cannabis revenue increased to $68 million, with international cannabis revenue growing 36% year-over-year and 51% sequentially to $20 million [9][22]. - Beverage revenue totaled $50 million, impacted by headwinds in the craft beer segment, while distribution revenue grew by 26% year-over-year to $85 million [11][23]. - Wellness revenue remained flat at $14.6 million, driven by innovation in product offerings [20][24]. Market Data and Key Metrics Changes - The Canadian adult-use cannabis sales channel net of excise tax grew to $46 million, with recreational cannabis growing 6% in the quarter [12][22]. - The international cannabis market, particularly in Europe, is seen as a significant growth opportunity, with expectations for continued expansion in Germany, the UK, and Poland [10][39]. Company Strategy and Development Direction - The company aims to leverage its strong balance sheet and liquidity to capitalize on regulatory changes in the cannabis industry, particularly in the U.S. [5][29]. - The strategic focus includes enhancing operational efficiency in the beverage segment and expanding pharmacy reach in Germany through Tilray Pharma [11][18]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory for the second half of fiscal 2026, citing a diversified platform and improving fundamentals [21][29]. - The company is preparing for potential regulatory changes in the U.S. that could significantly impact the cannabis market, particularly with the rescheduling of cannabis [6][54]. Other Important Information - The company operates more than 40 brands in over 20 countries and is a leader in the cannabis market, with a strong position in both the Canadian and international markets [5][6]. - The company has a robust cash position of approximately $292 million, providing flexibility for strategic opportunities [5][28]. Q&A Session Summary Question: What can the industry do to improve the regulatory outcome regarding the intoxicating hemp ban? - Management is working with legislators to extend the deadline or modify regulations to allow for a regulated amount of milligrams to be sold nationally [30][31]. Question: Can you quantify how much supply was held back from the Canadian market? - Approximately $5 million worth of supply was held back to redeploy into higher-margin international markets [32]. Question: What drove the substantial increase in distribution sales? - The increase was driven by new distribution channels and competitive pricing, with a focus on high-margin SKUs [34][36]. Question: What are the expectations for growth within the Canadian market? - Management expects mid- to high single-digit growth in the Canadian market, supported by new product launches and strong demand [40][41]. Question: Can you provide more color on the CC Pharma business and its distribution reach? - The company aims to triple its distribution reach in Germany, leveraging its sales organization to sell more medical cannabis [44][46]. Question: What is the long-term outlook for the beverage business? - Management remains confident in the beverage business, emphasizing the importance of integration and the potential for future growth, particularly with cannabis-infused drinks [51][53].