Tilray Brands revenue rises 23% to US$257.1M as cannabis sales fall
Gross margin widened to 30 per cent, but cannabis revenue declined; Tilray retained its fiscal 2027 adjusted EBITDA target.
Theo Marchetti
The fiscal first quarter ended Aug. 31 with higher overall revenue and gross profit but lower cannabis sales, according to results released Thursday. Tilray Brands, Inc. NASDAQTLRY TSETLRY reported US$257.1 million in net revenue and US$77.5 million in gross profit, both first-quarter records.
Revenue grew 23 per cent from the year-earlier quarter, while the group gross margin widened to 30 per cent from 27 per cent. On Nasdaq, the NASDAQTLRY listing closed at US$3.72 at 4 p.m. EDT on Oct. 7. The results were issued at 7 a.m. EDT on Oct. 8, after that close.
Cannabis net revenue declined to US$56.1 million in the Aug. 31 quarter from US$64.5 million a year earlier, the release said. Cannabis gross profit slipped to US$22.0 million from US$23.3 million, even as its gross margin rose to 39 per cent from 36 per cent.
Tilray reported a US$40.0 million net loss for the quarter, which it said was driven predominantly by noncash charges. Adjusted EBITDA slipped to US$9.2 million from US$10.2 million. The company reaffirmed its fiscal 2027 adjusted EBITDA guidance of US$68 million to US$75 million, putting more weight on the remaining quarters.
Beverage Revenue Reaches US$101.5 Million
The beverage business supplied most of the increase in sales. Its revenue rose to US$101.5 million from US$55.7 million a year earlier, reflecting Tilray's acquisition of BrewDog, according to the company's results. Beverage gross profit climbed to US$42.0 million from US$21.3 million, while its margin widened to 41 per cent from 38 per cent.
Distribution revenue rose to US$84.3 million from US$74.0 million. The segment's gross margin held at 11 per cent, so higher sales did not bring the margin expansion seen in beverages. Wellness revenue was roughly flat at US$15.3 million, and its gross margin fell to 29 per cent from 32 per cent.
The release also reported a 71 per cent increase in revenue from Europe, the Middle East and Africa, led by medical cannabis, beverages and pharmaceutical distribution. That regional figure spans several businesses; it does not reverse the decline in cannabis revenue across Tilray as a whole.
"We are no longer dependent on a single market or regulatory catalyst," Tilray chairman and chief executive Irwin Simon said in the Oct. 8 release.
Read more: DEA opens Form 225 registration choices for medical cannabis firms
Guidance Rests On Later Quarters
Tilray ended the Aug. 31 quarter with US$221.4 million in cash, restricted cash and marketable securities, according to its release. It said it had reduced total outstanding debt by US$42 million since the fiscal year began. The company described its quarter-end balance sheet as a net cash position, a non-GAAP measure.
Tilray said approximately US$1.7 million in global fuel surcharges burdened adjusted EBITDA in the first quarter. Its full-year target is also a non-GAAP measure, and the company said results typically strengthen in the second half, particularly the fourth quarter. The target excludes stock-based compensation and integration costs, among other items; Tilray said it could not reconcile the forecast with net income without unreasonable effort.
The guidance applies to the year ending May 31, 2027. Tilray scheduled a conference call for Oct. 8 at 8:30 a.m. EDT to discuss the quarterly results.
