Aurora(ACB) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a record net revenue of $343 million, representing a 27% increase year-over-year, with global medical cannabis revenue increasing by 39% [30][31] - Adjusted gross margin improved to 55% from 49%, benefiting from higher cannabis and plant propagation margins [31] - The company generated record adjusted EBITDA of nearly $50 million and positive free cash flow of about $10 million [30][31] Business Line Data and Key Metrics Changes - International revenue generation surpassed Canadian medical contributions, comprising over 50% of total global medical cannabis revenue, up from 41% in fiscal 2024 [30][31] - The company is positioned as a leader in global medical cannabis, focusing on high-margin segments and operational efficiencies [31][32] Market Data and Key Metrics Changes - The company holds leading market positions in Canada, Australia, Germany, Poland, and the UK, with plans to capitalize on emerging medical cannabis opportunities in underpenetrated markets [32][33] - The global medical cannabis market is estimated to exceed $5 billion, indicating significant growth potential, particularly in Europe and Australia [33][42] Company Strategy and Development Direction - The company’s strategy focuses on a medical cannabis-first approach, aiming for sustainable profitable growth in fiscal 2026 and beyond [33] - Investments in new cultivation technology and strong third-party partnerships are intended to optimize production planning and meet demand [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to deliver sustainable profitable growth, highlighting a 200% year-over-year growth in adjusted EBITDA for Q1 of fiscal 2026 [36] - The company is committed to maintaining positive free cash flow and operational discipline, with expectations for continued growth in international medical revenue [40][42] Other Important Information - The company has a strong balance sheet with a cash balance of $185 million and operates a debt-free cannabis business, providing a competitive advantage [30] - The company’s operational execution and industry leadership are seen as key factors for future growth [39] Q&A Session Summary Question: What can we expect from adjusted EBITDA patterns moving forward? - Management indicated that fiscal 2025 was a record year for adjusted EBITDA and expressed optimism for continued growth, noting over 200% year-on-year growth in Q1 of fiscal 2026 [36] Question: Why should shareholders continue to invest in the company? - The company has consistently identified and delivered on strategic priorities, focusing on profitable growth and maintaining a strong balance sheet without needing dilutive capital raises [38][39] Question: What can we expect from free cash flow moving forward? - The company expects to remain free cash flow positive, with a 42% increase in free cash flow reported in Q1 of fiscal 2026 compared to the previous year [40][41] Question: Are there still headwinds in international medical revenue? - Management reported strong performance in international medical cannabis, with revenue increasing by 85% year-over-year, and indicated that previous headwinds have subsided [42]