Aurora Cannabis Q4 2025 Earnings Report

Aurora Cannabis EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.11
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

Aurora Cannabis Revenue Results

• Actual Revenue: $63.34 million
• Expected Revenue: $88.85 million
• Beat/Miss: Missed by -$25.51 million
• YoY Revenue Growth: N/A

Aurora Cannabis Announcement Details

• Quarter: Q4 2025
• Date: 6/18/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, June 18, 2025
• Conference Call Time: 8:00AM ET

Aurora Cannabis (NASDAQ:ACB) is a Canadian cannabis company focused primarily on the production, distribution and sale of medical cannabis products. The company offers products such as dried cannabis flower, pre-rolls, oils, capsules and other cannabis formats through medical and adult-use channels, depending on the applicable market.

Aurora markets products under brands including Aurora, MedReleaf and CanniMed. Its business also includes cannabis cultivation, product development, processing and distribution, supported by cultivation and production facilities in Canada and international operations.

Founded in 2013 and headquartered in Edmonton, Alberta, Aurora serves customers in Canada and selected international markets, including parts of Europe and Australia. The company has historically emphasized its medical cannabis business and international medical markets. Aurora Cannabis is led by Chief Executive Officer Miguel Martin.

Aurora Cannabis Q4 2025 Earnings Call Transcript

Key Takeaways

• Record annual performance: Fiscal 2025 net revenue rose 27% to $343 M (global medical +39%), adjusted EBITDA reached $49.7 M and free cash flow was $9.9 M.
• International sales now account for over half of global medical revenue, with leading market positions in Germany, Australia, the UK and Poland.
• Adjusted gross margin improved to 55% for the year (62% in Q4), driven by cost efficiencies, higher-margin medical markets and stronger plant propagation margins.
• Poland experienced temporary headwinds from new regulations that reduced prescription volumes, though management expects recovery with upcoming high-quality cultivar launches.
• Debt-free cannabis operations with a strong balance sheet—$185.3 M cash—and two manufacturing facilities certified under both Australian TGA and EU GMP standards.

Presentation

[Moderator]

Greetings. Welcome to Aurora Cannabis's fiscal fourth quarter 2025 results conference call. All participants will be in a listen-only mode. A question-and-answer session will follow the formal presentation. The conference is being recorded today, Wednesday, June 18th, 2025. I would now like to turn the conference over to your host, Kevin Niland, Director of Strategic Finance and Investor Relations. Please go ahead, sir.

[Kevin Niland, Director of Strategic Finance and Investor Relations at Aurora Cannabis]

Hello, and thank you for joining us. With me are Miguel Martin, Executive Chairman and CEO, and Simona King, CFO. Earlier this morning, we filed our financials for the full fiscal year and fiscal fourth quarter 2025 periods ending March 31, 2025, and issued a news release containing these results. This news release, along with our financial statements and MD&A, are available on our IR website as well as via SEDAR+ and EDGAR. Our discussion today gives us a reminder that certain matters could constitute forward-looking statements that are subject to risks and uncertainties relating to our future financial or business performance. Actual results could differ materially from those anticipated in those forward-looking statements. Risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements. These documents may similarly be accessed via SEDAR+ and EDGAR.

[Kevin Niland, Director of Strategic Finance and Investor Relations at Aurora Cannabis]

Following prepared remarks by Miguel and Simona, we will conduct a question-and-answer session with our covering analysts. With that, I will turn the call over to Miguel. Please go ahead.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thanks, Kevin. We're delighted to share Aurora's results today, showcasing a record-setting year in global medical net revenue, adjusted EBITDA, and positive free cash flow. This performance is anchored by a strong and flexible balance sheet, exemplified by a sizable cash balance of $185 million and a debt-free cannabis business. We believe that's a significant advantage relative to the industry. Here are some key highlights from fiscal 2025. First, net revenue rose 27% to a record $343 million, which included global medical cannabis revenue increasing 39%. International revenue generation eclipsed the strong contribution from Canadian medical and comprised over half of total global medical cannabis, up from 41% in fiscal 2024. Second, adjusted gross margin improved to 55% compared to 49%, as we benefited from both higher cannabis and plant propagation margins.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Finally, we generated record adjusted EBITDA of almost $50 million, with record positive free cash flow of about $10 million. Aurora is already the largest company in the world focused on medical cannabis, the highest margin segment of the industry, and we have scientific knowledge, genetics, breeding, and regulatory expertise that are second to none. Notably, we are one of the select few cannabis companies with two manufacturing facilities certified under both Australian TGA Good Manufacturing Practice and EU GMP standards. These facilities represent 90% of our annual manufacturing capacity, allowing us to be the largest Canadian exporter of medical cannabis. Through our leading market positions in Canada, Australia, Germany, Poland, and the U.K., we are best able to capitalize on global medical cannabis opportunities in other countries as they emerge.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Let's now dive into our global cannabis business, beginning with updates to our international operations, where we are experiencing an increase in demand for EU and TGA GMP manufactured flower, and particularly high-potency THC cultivars with intensely aromatic profiles. Our second largest market after Canada is Australia, where we currently have the number two share. Although Australia is a highly regulated market for medical cannabis, it is rapidly growing and attracting new entrants. We remain optimistic with our positioning and ability to grow through expanded patient accessibility and our broad product line. We expanded our product portfolio with three new medical pastilles and two new cultivars. Medical pastilles offer patients several key benefits, including long-lasting and extended relief and easy oral intake that is discreet, portable, and convenient. Our new cultivars add to our comprehensive flower offerings, offering patients a greater range of potency and treatment options.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

To further support prescribers in Australia and facilitate more seamless and simplified prescribing options, we expanded access to our diverse range of high-quality Indemed products, enabling greater access for Australian patients. Turning to our European markets, where we have a long-standing presence and leadership position, looking to Germany first, the continent's largest market, it has now just been over a year since cannabis descheduling, and since then, the German market has experienced rapid growth from which we have benefited greatly, as more patients register and pharmacies work to support higher prescription volumes. To fully capitalize on this long-term opportunity, our high-quality EU GMP manufactured products must remain consistently in stock, a commitment we uphold through reliable supply from our Canadian and German facilities. This includes our recently launched Indemed products, which are our first medical cannabis products cultivated in Germany, further cementing our commitment to growth in that country.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Positive developments in Germany also have far-reaching effects across Europe, and we anticipate they will ultimately pave the way for legalization of medical cannabis in neighboring countries, where there is already broad acceptance. Leveraging our agility and unique strengths, such as regulatory and cultivation expertise, we are confident in our ability to establish a strong foothold as favorable conditions develop in these markets. Let's now discuss Poland and the U.K. In Poland, we have experienced some headwinds following a change in regulations that impacted the volume of prescriptions being issued. We believe this to be a temporary issue and continue to be optimistic about this market due to its longer production registration timelines, limited competition, and continued strong demand for Aurora's high-quality product offerings. In the U.K., we broadened our distribution and launched medical cannabis concentrates beginning in April.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Following the success of these formats in Canada and Australia, we leveraged our operational and regulatory expertise to bring these proprietary cultivar-specific inhalable cannabis extracts to British patients. This new product category represents another step forward in expanding the variety of high-quality medical cannabis available in this growing market. Turning to Canadian operations, Canadian medical grew 4% annually, and we continue to lead this market with the number one market share. This strong performance is a result of our continued investment in innovation, operational excellence, and high-quality patient experience. As we continue to invest and prioritize growing our high-margin global medical cannabis business, we remain active in the Canadian recreational market by delivering exceptional high-quality, cutting-edge, and diverse options to consumers.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

There are clear interactions between recreational sales and medical sales in our home market, which, if international environments evolve from medical to recreational, would provide us with another advantage over our peers. In addition to signing new strategic external supply agreements, we continue to invest in our world-class manufacturing facilities to maximize production efficiency and increase annual manufacturing capacity. It is these initiatives, along with our continued investment in science and innovation through our dedicated research and development facility, Aurora Coast, that enable us to benefit from both international and domestic growth opportunities. We had an incredible year with record global medical net revenue, adjusted EBITDA, and positive free cash flow, and are excited for what lies ahead. Let me now turn the call over to Simona for a detailed financial review of Q4 2025, followed by a discussion of our outlook for Q1 2026.

[Simona King, CFO at Aurora Cannabis]

Thank you, Miguel. We are very pleased with our performance in fiscal 2025, characterized by record annual results in global medical cannabis revenue of $244.4 million, combined with adjusted EBITDA of $49.7 million, and free cash flow of $9.9 million. I would like to thank our team for their many contributions to these excellent results. Our plan for fiscal 2026 is to continue executing on our global medical-first cannabis strategy, deliver sustainable improvements in our financial performance, and create more value for our shareholders. Let's now delve deeper into Q4 2025 results before discussing our outlook for Q1 2026. First, net revenue of $90.5 million represented 34% growth, supported by record net revenue from both our global medical cannabis and plant propagation segment.

[Simona King, CFO at Aurora Cannabis]

Second, quarterly profitability consisted of consolidated adjusted gross margin at 62%, 1,200 basis points higher than the year-ago period, resulting in record adjusted gross profit of $54.2 million. All segments generated higher margins than the year-ago period. Third, adjusted EBITDA grew 619% to a record $16.7 million from $2.3 million in the year-ago period. Fourth, we ended the quarter and fiscal year with $185.3 million in cash and cash equivalents and no cannabis business debt. In medical cannabis, our key strategic focus, net revenue rose 48% to $67.8 million due to 114% growth internationally, combined with continued strong contributions from Canadian medical. Medical cannabis comprised 75% of net revenue, compared to 68% in the year-ago period, and approximately 90% of adjusted gross profit in both periods. Adjusted gross margin for medical cannabis was 70%, up from 66% in the year-ago period.

[Simona King, CFO at Aurora Cannabis]

Several factors drove the year-over-year increase, including larger revenue contributions from higher margin markets, sustainable cost reductions, and improved efficiency in our manufacturing operations. Consumer cannabis net revenue was $8.2 million, down from $10.2 million in the year-ago period. The year-over-year decline was the expected result of our continued decision to focus on portfolio optimization and prioritization of sales to our higher-margin medical cannabis business. Adjusted gross margin for consumer cannabis was 27%, compared to 16% in the year-ago period. The margin increase was due to sales of higher-margin products and cost improvements through spend efficiencies. Bevo Farms' plant propagation net revenue increased to $13.8 million, up 32% from $10.4 million in the year-ago period. This year-over-year improvement is due to a combination of increased plant propagation capacity and product offerings.

[Simona King, CFO at Aurora Cannabis]

Bevo historically delivers higher revenue in the winter and spring months, with about 65%-75% of plant propagation revenue and up to 80% of EBITDA earned in the first half of the calendar year. Adjusted gross margin for plant propagation revenue was 37%, compared to 25% in the year-ago period. The increase was related to favorable product mix and higher capacity at Bevo's greenhouses. Consolidated adjusted SG&A increased 17% to $36.7 million, compared to the year-ago period, and supported year-over-year net revenue growth of 34%. The increase compared to the prior year period relates to higher freight and logistics costs, notably from sales to Europe with the increase in sourcing from Canada, and incremental costs following the acquisition of MedReleaf Australia. Adjusted EBITDA increased to $16.7 million from $2.3 million last year.

[Simona King, CFO at Aurora Cannabis]

The meaningful improvement from the year-ago period was due to a substantial increase in gross profit resulting from higher net revenue before fair value adjustments required under IFRS. Our balance sheet remains one of the strongest in the global cannabis industry. We held $185.3 million in cash and cash equivalents as of March 31, and our cannabis operations are completely debt-free. Our plant propagation business holds non-recourse debt that is secured by a significant fixed asset base held at Bevo. Free cash flow was positive, $2.5 million, compared to a negative free cash flow of $21.9 million in the year-ago period. The $24.4 million increase is due to higher net revenue and contribution margin, along with an increase in working capital of $17.3 million. Let me now provide some thoughts on what we expect for Q1 2026, which ends on June 30.

[Simona King, CFO at Aurora Cannabis]

First, continued strong global cannabis revenue driven by improved performance in Canadian medical, consistent performance in consumer, offset by temporary declines in some of our international markets. Taken together, global cannabis should be slightly lower compared to Q4 2025 and is expected to improve further in later quarters due to increased distribution and further innovation. Second, seasonally higher revenues for plant propagation as they complete their peak quarter, in line with historical seasonal trends. Third, margins should hold strong, and adjusted EBITDA is projected to be sequentially below Q4 fiscal 2025 due to lower revenue contributions from the higher-margin international markets. Finally, free cash flow is expected to remain positive due to continued strong performance and improved operating cash use. Thank you for your time. I'll now turn the call back to Miguel.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thanks, Simona. Our proven commitment to medical cannabis and our strong execution in seizing global opportunities resulted in excellent strategic and financial performance in fiscal 2025. Our medical cannabis-first strategy is working, providing us with meaningful, high-margin growth opportunities in what we believe is a $5 billion-plus market. We will continue to concentrate primarily on Europe and Australia, which are both vastly underpenetrated. Our focus outside of North America has given Aurora a first-mover advantage and has allowed us to build a strong moat backed by scientific expertise and expanding product portfolio and our ability to navigate global regulatory frameworks. This strategy, supported by our continued strong financial performance, serves to further differentiate us from our peers. Aurora is positioned for sustainable, profitable growth in fiscal 2026, and we look forward to providing business development updates as we work to create long-term value for our shareholders.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you for listening to us this morning, and we'd now be happy to answer your questions. Operator, please open the lines.

[Moderator]

Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. We ask that you limit to one question and re-queue for additional questions. One moment while we pull for questions. Our first question is from Derek Lessard with TD Cowen. Please proceed.

[Derek Lessard, Analyst at TD Cowen]

Yeah, good morning, everybody. Great quarter and great year, everyone. Congratulations. Miguel, I just want to talk about the Q1 guide on the international side, and I think you did touch on it in your prepared remarks, and you said temporary declines in some markets, which I assume is Poland. Maybe could you add some meat to those bones?

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Sure. Good morning, Derek. Nice to talk to you. Yes, I mean, I think we saw some regulatory changes in Poland that affected the ability of our patients to access prescriptions and generally the size of the market. We view that to be temporary. We are excited about the long-term aspects of Poland coming back. I think there are a couple of things there. One is we have two very important launches, which we believe will be some of the highest quality cultivars that Poland has seen, which will allow us to grow our market share and regain business that way. Secondly, we do see positive developments with the regulators in Poland embracing a very thoughtful long-term approach. We view that as a temporary disruption.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Germany continues to deliver at a high level, and it is a growth market for us, not only growing overall, but also from a market share standpoint. The U.K., which is the other key market of size in that part of the world, is also growing.

[Derek Lessard, Analyst at TD Cowen]

Awesome. That's a good color there. Maybe one last one for me before I re-queue. Again, you touched on it, but it does feel like there's a bit more incoming competition into the international space these days. Maybe talk about how you feel about, I guess, your positioning and any initial pressures on either the revenue or the margin structure at this point.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, it's a great question. These markets, whether it's Australia or Western or even parts of Eastern Europe, are great high-margin markets, and we've seen other competitors take an interest in them and try to get into them. Now, they're not easy to get into. Most of them require GMP certification, which is a very challenging certification to get. Australia, as we mentioned, has their own certification protocol called TGA. First, there's a barrier in terms of that. Secondly, you have to have resources and infrastructure in those markets, which we have. We've been almost a decade in Australia. We've got almost six, seven-plus years in Germany. We have a production facility there. While there is a lot of interest because of the growth and size of those markets, they're not easy to execute in.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

I think while there are a lot of people looking at it, it still is a small subset, and it is a concentrated piece of business from a market share standpoint, much more so than say what we see in Canada.

[Derek Lessard, Analyst at TD Cowen]

Yeah, thanks for that, Miguel.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you, Derek. We appreciate it.

[Moderator]

Our next question is from Bill Kirk with Roth Capital Partners. Please proceed.

[Bill Kirk, Analyst at ROTH Capital Partners]

Hey, good morning, everyone. I had a question on gross margin. I mean, obviously, it's already industry-leading. I think it was said each segment, gross margin's still expanding. Where do you think margins can go? Maybe what would be the major drivers to get there?

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, Bill, let me make a top-line comment, and then I'll let Simona dive down into it a little bit. Yes, and we appreciate your comment on margins. It's something we work hard at, and it's an industry that doesn't talk a lot about gross margins, but clearly, if you're going to focus on free cash flow, which we had a record quarter in, you have to focus on gross margins. I think there's two drivers for us. One is the cost of production, and we think we have some of the most compelling production costs out there, particularly for GMP products, that allow us to start that process at a low point.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Secondly, because we sell so much premium products and the quality of our products are so high, we're able to garner what we think are top-tier margins and pricing, particularly to wholesale, which is our customer. I think those are the big drivers. Simona, any other pieces you want to unpack?

[Simona King, CFO at Aurora Cannabis]

Yeah, no, thanks, Miguel. To add a little bit more, we focused over the years on yield improvement and cost efficiencies in our operations. That has definitely contributed to our improved margins over the quarters and compared to last year as well. The other part that is impacting our margin in a favorable way is our portfolio mix, where we are selling more and more in the medical cannabis space, especially in the international markets, which have higher margins. Putting these two factors together has contributed to the increase that you have seen over the quarters and also on an annual basis. We provide this breakdown in terms of margin impact coming from our medical cannabis and the other business segments that we have. We believe these margins will continue to be strong.

[Bill Kirk, Analyst at ROTH Capital Partners]

Thank you. Miguel, when you were talking about Germany, you mentioned a key was remaining in stock. I guess my question is, have you experienced out-of-stocks there? If you have, what could sales have been if supply better met demand in Germany? There was a separate comment about increasing capacity, and I was just wondering if the two were related.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, I mean, listen, it is easy to forget that this is medicine, and medicine needs to be in stock for our patients and for our prescribing physicians. We've not had issues. It's something that we really focus on. The comment that you heard us talk about with REC reallocating these inputs, most of the products that we sell, we sell globally. And so the great products that we develop in Canada, we're able to launch around the world. Said differently, we advantage those markets, particularly our medical markets, over REC. And so we've not seen an out-of-stock, but it is a key component to growth. Both prescribing physicians and patients advantage those brands that are in stock.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

It is a hard thing to do when you see rapid growth in a market like Germany, and it is something that we work really hard at and we think is a point of differentiation for us.

[William Joseph Kirk, Analyst at ROTH Capital Partners]

Perfect. Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you, Bill.

[Moderator]

Our next question is from Frederico Gomes with ATB Capital Markets. Please proceed.

[Frederico Gomes, Analyst at ATB Capital Markets]

Hi, good morning. Thanks for taking my questions. First question, just going back to that comment about supply, I guess. Are you in any way constrained by supply as those international markets grow? I mean, if you project continued growth over the next year or so, do you anticipate that you would have to meaningfully expand your own cultivation, or would there be any interest, I guess, in you doing that, or is it a strategy to maybe get that additional supply from third-party cultivators? Thanks.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, Fred, we've not had to date any sort of supply constraints. Simona mentioned our yield improvements. We've been able, through our genetic facility out at Coast, to develop proprietary cultivars that significantly have improved our yields at our own facilities. If you look at some of our CapEx usage and our investment, a lot of that has gone into whether it's new lighting or nutrient systems or upgrading our current facilities to meet those demands. As we've announced previously, and you mentioned in your question, we've also announced some very strong partnerships with third parties that allow us to schedule that demand. We feel good about where we're at. We'll continue to look at opportunities, but it has not impeded our ability to service any of our patients internationally.

[Frederico Gomes, Analyst at ATB Capital Markets]

Perfect. Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

You're welcome.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

My second question, just a big picture here in terms of international markets that could become more meaningful over the coming years. I know that you are in Australia, Germany, Poland, and the U.K., so the big markets. In terms of new markets opening up, do you see anything happening near term, and if so, which markets are we looking at?

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, I think in the short term as defined by, say, the next year or so, it's going to be the expansion of the current markets. There were questions about the new government in Germany, their take on medical cannabis, and we've not seen any indication that there's going to be a rollback there. We see Germany, which is the largest, continuing to grow at a rapid rate. As we mentioned, our view on the Poland situation is that it's temporary and that that market will advantage high-quality cultivars like the ones we're launching. The U.K. is going to continue to expand, which is a nice market because you can also launch other formats much easier there, which we've done with our inhalable extracts. You mentioned Australia. Australia is going to continue to grow.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Right next to it is New Zealand, and there's a lot of efficiencies in there. Beyond that, we are seeing new markets come online like Switzerland and Austria. We've talked a little bit about some interest from countries like Ukraine. Short-term, we'll be these big, large markets continuing to grow and opportunities to grow share because of the sort of unique interest in that GMP flower, which is a limited commodity. We continue to see positive developments internationally all around the world with governments looking at medical cannabis.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Perfect. Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you, Fred.

[Moderator]

Our next question is from Matt Bottomley with Canaccord Genuity. Please proceed.

[Matt Bottomley, Analyst at Canaccord Genuity]

Good morning, everyone. Thanks for the questions and congrats on a very strong fiscal year. Just first, as sort of a follow-up question to Simona and some of the other comments you had on margins, apologies if I missed this in the prepared remarks, but I'm trying to get an indication on a quarter-over-quarter basis. It looks like the shift in revenues was mainly just more plant propagation, less adult use relative to last quarter. Everything else kind of flat. Just trying to get a better indication of why adjusted EBITDA kind of took a step back there. Then just a secondary question on Australia if I have time after that.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Sure. Simona, why do not you take the first one, and I will be happy to answer Australia unless it is a modeling question.

[Simona King, CFO at Aurora Cannabis]

Sure. To provide a little bit more context on the adjusted EBITDA margin, what we've also seen in Q4 is an increase in adjusted SG&A. That's due to an increase in, of course, supporting the revenue side, but also expected year-end expenses that we don't expect to be recurring. The increase in SG&A has also impacted our adjusted EBITDA margin, but that's been offset by the increase overall in net revenue and the adjusted gross margin impacts that we saw in Q4.

[Matt Bottomley, Analyst at Canaccord Genuity]

Okay, got it. Thanks for that. Yeah, I guess more broadly, just on Australia. We heard a little bit about some of the issues in Poland from some of your peers when they had reported earlier in the prior weeks and months. Australia, we're getting a lot of positive commentary there. Just given that you have the number two market share, can you just give us an indication on how much there is growth just relative to the strong performance versus or in addition to just the growth prospects there? Obviously, it's a very relevant market going back to the early days of the Canadian LPs, and it seems like the traction is starting to gain there. Maybe just a little more macro commentary on usage or what doctors are doing there would be helpful for our modeling.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah, I mean, I think overall, we see Australia growing. It's hard without syndicated data to understand exactly. It's hard for me to give you a percentage, but we don't see anything sort of structural changing. Now, with all new regulatory environments, you're going to see scrutiny in different areas. It's not going to be a straight line, say, quarter-over-quarter. It is a market where we think you can garner large market shares. Said differently, it's not a market where you're going to be sort of susceptible for a thousand players coming in. You have to have feet on the ground. You have to have a relationship with the distributors. You have to have a relationship with the pharmacies. The pharmacies particularly have a lot of influence, particularly with the patients and in that category. We like that market a lot.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

I think your other point of sort of inflection for Australia is the introduction of other formats beyond flower and oil. We have seen that as we have launched pastilles, or as they are known in North America, gummies. We also see other items such as inhalables coming online. That all comes together, I think, for a subset of companies to be very successful in a growing market. It is also one where we do not see a tremendous amount of sort of price compression. There is definitely a lot of input coming in on the low end, but there is good pricing at the middle and on the premium side. As I mentioned earlier, do not go to sleep on New Zealand. I know it is smaller, but there is a lot of opportunity there.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

It is a very, very long and challenging registration process and one that we've been working on for a while. That is probably going to be an even more consolidated market in terms of market share. It has a long history with medical cannabis and is a really good market. The combination of the two, while challenging from a distance standpoint and the amount of investment you have to make, we think will be very, very strong markets going forward.

[Matt Bottomley, Analyst at Canaccord Genuity]

Okay. Thanks. I appreciate it.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you.

[Moderator]

As a reminder, press star one on your telephone keypad if you would like to ask a question. Our next question is from Pablo Zuanic with Zuanic & Associates. Please proceed.

[Pablo Zuanic, Analyst at Zuanic and Associates]

Thank you. Good morning, everyone. Miguel, just one quick question. In terms of Germany, when we compare with some of the U.S. states, 4% population penetration, and in the case of Germany, only probably 0.4%, what do you think are the structural impediments on the demand and supply side for Germany to continue to grow in terms of penetration? 0.4% still seems very low to me with the potential that we see in other U.S. states. Just talk about the impediments, the structural impediments. Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah. Pablo, and good morning. It's a great question. It's an interesting one because if you look at the way you would describe its structural impediments, at face value, Germany doesn't have a lot of them. They've got a permissive regulatory regime. You have a relatively easy ability for patients to get prescriptions.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

There is a very strong telemedicine program there that allows the shipment of medical cannabis through the mail throughout Germany. I think it's probably three primary areas. One is education. It is a strict market in terms of what you can communicate and how you can communicate it is the first one. Secondly, it takes a while, particularly in that market, for doctors to get educated on the category, and therefore, since you need a specific prescription for a specific item, get there. I think third is because it is very difficult in that market to have anything other than flower and oil, some of the other formats, even though there are some inhalables registered, aren't there. You are correct that 0.4% is less than the 1% of Canada. Canada has got almost eight years on Germany from a timing standpoint.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

People should remember the size of the German economy and how quickly cannabis has grown there, and we do not see any stepbacks on medical cannabis. While the overall penetration number may be low, I think it is one of the countries globally that everybody should keep an eye on. As I mentioned in my prepared remarks, there are a lot of eyes on Germany from other European countries, both in Western Europe and in Eastern Europe. It has a tremendous amount of influence. By all accounts, the medical cannabis system is going very well, and we think will continue to influence its neighbors.

[Pablo Zuanic, Analyst at Zuanic and Associates]

Thank you. Just one quick follow-up. Obviously, you have a very strong sales force talking to the doctors there, a very pharmaceutical medical approach.

[Pablo Zuanic, Analyst at Zuanic and Associates]

I could make the argument that the way the market is developing is more from the cash payers, more call it maybe pseudo REC, and maybe the way to go to market there and promote your products is very different in that case. That sales force is less of a strength. Can you talk about that, how you balance the two, the cash payers versus the ones that are more influenced by the doctors? Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Yeah. I mean, so you're describing so what you have there, we would call that segment the self-payers. So you have self-payers and the reimbursed. And yes, the self-payer segment does operate a little bit differently. We have resources on both sides of that.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

At the end of the day, whether you are paying for the medication yourself or whether you are coming in through a reimbursed model, a doctor has to prescribe it, and there has to be a certain amount of education. We think there is a lot of overlap there. I think secondarily, because we operate in Canada in both medical and REC environments, and we are utilizing the same products both in Canada and Germany, it gives us a significant advantage because we know those products well. We have interacted with doctors and patients in Canada, and we can translate that into Germany. The best-selling Canadian products that we have are the ones that we are launching in Germany, and that is going very well. It is a great point in terms of the different ways you have to execute, but we have been successful on both sides of it.

[Pablo Zuanic, Analyst at Zuanic and Associates]

Got it.

[Pablo Zuanic, Analyst at Zuanic and Associates]

Thank you.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you, Pablo.

[Moderator]

With no further questions, I would like to turn the conference back over for closing remarks.

[Miguel Martin, Executive Chairman and CEO at Aurora Cannabis]

Thank you very much. We appreciate that. It was a great year for Aurora, and we are terribly excited about the year in front of us. We appreciate your interest, and we look forward to updating everyone as we move forward. Thank you. All the best.

[Moderator]

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Participants

Executives

• Simona King, CFO
• Kevin Niland, Director of Strategic Finance and Investor Relations
• Miguel Martin, Executive Chairman and CEO

Analysts

• Pablo Zuanic, Analyst at Zuanic and Associates
• Frederico Gomes, Analyst at ATB Capital Markets
• Bill Kirk, Analyst at ROTH Capital Partners
• Derek Lessard, Analyst at TD Cowen
• Matt Bottomley, Analyst at Canaccord Genuity
• William Joseph Kirk, Analyst at ROTH Capital Partners
• Moderator