Tilray(US:TLRY)2023-10-04 16:55Financial Data and Key Metrics Changes - The company reported a record Q1 with net revenue of $177 million, representing a 15% year-over-year growth [57] - Adjusted EBITDA was $11.4 million, down from $13.5 million in the prior-year quarter, primarily due to the absence of HEXO advisory fee revenue [86] - Gross profit was $44.2 million compared to $48.6 million in the prior-year quarter, with gross margin decreasing to 25% from 32% [85] Business Line Data and Key Metrics Changes - Cannabis gross revenue increased by 20%, with Canadian adult-use cannabis revenue rising by 22% [83][73] - Beverage alcohol revenue was $24.2 million, up 17% from the prior-year quarter, driven by contributions from the Montauk brewery acquisition [119] - Wellness segment revenue held steady at $13.3 million compared to $13.4 million in the prior-year quarter [120] Market Data and Key Metrics Changes - The company grew Canadian cannabis revenue by 16.5% in the quarter, maintaining a 13.4% market share in Canada [57] - International cannabis revenue grew by 37%, with significant market shares in Germany, Poland, and Luxembourg [57] - The beverage alcohol market is projected to grow significantly, with craft beer expected to reach $282 billion globally by 2032 [63] Company Strategy and Development Direction - The company aims to maximize profitable revenue growth through organic expansion and strategic acquisitions [55] - Focus on optimizing asset utilization and cost management to ensure a lean cost structure across all business segments [56] - The company is excited about the beverage category, particularly THC beverages, and plans to transition production to its London facility for cost savings [61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Canadian cannabis market, noting a significant shift of consumers to the legal market [30] - The company is focused on driving organic growth through new product innovation and distribution expansion [25] - Management highlighted the importance of maintaining a strong balance sheet and cash position while pursuing growth opportunities [56] Other Important Information - The company achieved $27 million in planned synergies from the HEXO transaction within two months [60] - The wellness segment is adapting to higher ingredient costs through increased pricing [107] - The company has a diversified business model, with cannabis and distribution each representing about 40% of total revenue [84] Q&A Session Summary Question: Can you speak to the margin evolution in the beverage alcohol segment? - Management indicated confidence that beer brands will maintain margins above 50%, while spirits margins are traditionally closer to 50% [127] Question: Can you clarify the liability regarding Double Diamond and its payment structure? - Management clarified that dividends issued to partners in Aphria Diamond are profit distributions and not operating expenses [129]