Tilray(US:TLRY)2025-10-09 14:00Financial Data and Key Metrics Changes - The company reported record first-quarter net revenue of $210 million, a 5% increase year over year, driven by increased cannabis sales in Canada and international markets [31][36] - Net income for the quarter was $1.5 million, compared to a net loss of $34.7 million in the prior year period, indicating a significant turnaround in profitability [35][36] - Adjusted EBITDA for the quarter improved to $10.2 million from $9.3 million last year, reflecting operational efficiency [36] Business Line Data and Key Metrics Changes - Cannabis revenue increased by 5% year over year to $64.5 million, supported by a 12% growth in adult use gross revenue and a 10% growth in international cannabis [31][36] - Beverage revenue reached $55.7 million, impacted by SKU rationalization but supported by new product contributions [32][36] - Wellness revenue grew by 3% year over year to CAD 15.2 million, driven by innovations in health-focused products [32][36] Market Data and Key Metrics Changes - The Canadian cannabis business reported revenue up 4% year over year to $51 million, reinforcing its position as the largest legal cannabis company in Canada by revenue [12][36] - International cannabis revenue grew by 10% year over year to $13.4 million, despite permit challenges in Portugal [14][36] - The distribution segment's revenue increased by 9% year over year to CAD 74 million, primarily due to a stronger euro [32][36] Company Strategy and Development Direction - The company aims to leverage its global platform to drive innovation in cannabis, beverage, and wellness sectors, focusing on sustainable growth and operational efficiency [5][7] - The strategic focus includes optimizing the craft beer SKU portfolio under Project Four Twenty, which has already realized $25 million in annual savings [20][21] - The company is well-positioned to capture growth opportunities in the U.S. medical cannabis market, anticipating a potential market share of 3% to 5% in a $10 billion market [11][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the evolving regulatory landscape for cannabis, particularly in the U.S. and Europe, which could enhance patient access and market opportunities [10][11] - The company is confident in its ability to adapt to regulatory changes and is committed to continuous innovation and portfolio expansion [28][36] - Management acknowledged the challenges faced in the beverage segment but emphasized the long-term potential for growth and profitability [20][36] Other Important Information - The company reduced its outstanding debt by $7.7 million during the quarter, bringing its net debt to $3.9 million, which enhances financial flexibility for strategic opportunities [36][37] - The company has built a diversified global platform with over 40 unique brands in more than 20 countries, positioning itself as a leader in the cannabis, beverage, and wellness markets [8][9] Q&A Session Summary Question: International growth opportunities and permit delays - Management noted progress in obtaining permits in Portugal and expressed optimism about increasing production capacity in both Portugal and Germany [41][43][44] Question: Rescheduling opportunities in the U.S. - Management indicated readiness to leverage existing infrastructure and explore partnerships or acquisitions to capture opportunities in the U.S. medical cannabis market [48][51] Question: Canadian adult use market dynamics - Management highlighted a 1.3% decline in overall market pricing, with their pricing up 2% and volume growth of 6.5%, indicating strong performance relative to the market [67][70] Question: Beverage segment profitability improvement plans - Management discussed ongoing efforts in SKU rationalization and integration of acquired brands to improve margins in the beverage segment [75][78] Question: Managing risks in Portugal and Germany - Management emphasized commitment to the Portuguese market while also having contingency plans in Germany, including the ability to ship from Canada [81][84][90]