Aurora Cannabis Q4 2025 Earnings Call Transcript

Quartr
Provided by Quartr
June 18, 2025

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.
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Earnings Conference Call
Aurora Cannabis Q4 2025
00:00 / 00:00

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Operator

Greetings. Welcome to Aurora Cannabis Inc. Fiscal Fourth Quarter twenty twenty five Results Conference Call. All participants will be in a listen only mode. A question and answer session will follow the formal presentation.

Operator

The conference is being recorded today, Wednesday, 06/18/2025. I would now like to turn the conference over to your host, Kevin Nyland, Director of Strategic Finance and Investor Relations. Please go ahead, sir.

Kevin Niland
Kevin Niland
Director of Strategic Finance & IR 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 twenty twenty five period ending 03/31/2025, and issued a news release containing these results. This news release, along with our financial statements and MD and A, are available on our IR website as well as via SEDAR plus 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.

Kevin Niland
Kevin Niland
Director of Strategic Finance & IR at Aurora Cannabis

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

Miguel Martin
Miguel Martin
Executive Chairman & 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 $185,000,000 and a debt free cannabis business. We believe that's a significant advantage relative to the industry. Here are some key highlights from fiscal twenty twenty five.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

First, net revenue rose 27% to a record $343,000,000 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 twenty twenty four. Second, adjusted gross margin improved to 55% compared to 49 as we benefited from both higher cannabis and plant propagation margins. And finally, we generated record adjusted EBITDA of almost $50,000,000 with record positive free cash flow of about $10,000,000 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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. And through our leading market positions in Canada, Australia, Germany, Poland, and The UK, we are best able to capitalize on global medical cannabis opportunities in other countries as they emerge. 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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 discrete, portable, and convenient. Our new cultivars add to our comprehensive flower offerings, offering patients a greater range of potency and treatment options.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

And to further support prescribers in Australia and facilitate more seamless and simplified prescribing options, we expanded access to our diverse range of high quality IndiMed products, enabling greater access for Australian patients. Turning to our European markets, where we have a longstanding presence and leadership position. Looking to Germany first, the continent's largest market. It's 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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 INDiMed products, which are our first medical cannabis products cultivated in Germany, further cementing our commitment to growth in that country. Positive developments in Germany also have far reaching effects across Europe. 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Let's now discuss Poland and The UK. 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 UK, we broadened our distribution and launched medical cannabis concentrates beginning in April. 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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. 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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 twenty twenty five, followed by a discussion of our outlook for Q1 twenty twenty six.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Thank you, Miguel. We are very pleased with our performance in fiscal twenty twenty five, characterized by record annual results in global medical cannabis revenue of $244,400,000 combined with adjusted EBITDA of $49,700,000 and free cash flow of $9,900,000 I would like to thank our team for their many contributions to these excellent results. Our plan for fiscal twenty twenty six 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 twenty twenty five results before discussing our outlook for Q1 twenty twenty six. First, net revenue of $90,500,000 represented 34% growth, supported by record net revenue from both our global medical cannabis and plant propagation segment.

Simona King
Simona King
Chief Financial Officer 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 $54,200,000 All segments generated higher margins than the year ago period. Third, adjusted EBITDA grew 619% to a record $16,700,000 from $2,300,000 in the year ago period. And fourth, we ended the quarter and fiscal year with $185,300,000 in cash and cash equivalents and no cannabis business debt. In medical cannabis, our key strategic focus, net revenue rose 48% to $67,800,000 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.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Adjusted gross margin for medical cannabis was 70%, up from 66 in the year ago period. 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 $8,200,000 down from $10,200,000 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 margins for consumer cannabis was 27% compared to 16% in the year ago period.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

The margin increase was due to sales of higher margin products and cost improvements through spend efficiencies. Peoples plant propagation net revenue increased to $13,800,000 up 32% from $10,400,000 in the year ago period. This year over year improvement is due to a combination of increased plant propagation capacity and product offerings. Bebo historically delivers higher revenue in the winter and spring months with about 65% to 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.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

The increase was related to favorable product mix and higher capacity at Beboats Greenhouses. Consolidated adjusted SG and A increased 17% to 36,700,000 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 MedRelief Australia. Adjusted EBITDA increased to $16,700,000 from $2,300,000 last year. 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.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Our balance sheet remains one of the strongest in the global cannabis industry. We held $185,300,000 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 Vivo. Free cash flow was positive $2,500,000 compared to a negative free cash flow of $21,900,000 in the year ago period. The twenty four point four million dollars increase is due to higher net revenue and contribution margin, along with an increase in working capital of $17,300,000 Let me now provide some thoughts on what we expect for Q1 twenty twenty six, which ends on June 30.

Simona King
Simona King
Chief Financial Officer 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 twenty twenty five 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 twenty twenty five due to lower revenue contributions from the higher margin international markets. And finally, free cash flow is expected to remain positive due to continued strong performance and improved operating cash use.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Thank you for your time. I'll now turn the call back to Miguel.

Miguel Martin
Miguel Martin
Executive Chairman & 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 twenty twenty five. Our medical cannabis first strategy is working, providing us with meaningful, high margin growth opportunities in what we believe is a 5,000,000,000 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 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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 twenty twenty six, and we look forward to providing business development updates as we work to create long term value for our shareholders. Thank you for listening to us this morning, and we'd now be happy to answer your questions. Operator, please open the lines.

Operator

Thank you. Our Our first question is from Derek Lazard with TD Cowen. Please proceed.

Derek Lessard
VP - Equity Research at TD Cowen

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

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Sure, and good morning, Derek. Nice to talk to you. Yes, 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's 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. And secondly, we do see positive developments with the regulators in Poland, embracing a very thoughtful long term approach. And so we view that as a temporary disruption. Germany continues to deliver at a high level and is a growth market for us, not only growing overall, but also from a market share standpoint.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

And The UK, which is the other key market of size in that part of the world is also growing.

Derek Lessard
VP - Equity Research at TD Cowen

Awesome, that's a good color there. Maybe one last one for me before I re queue. And again, you touched on it, but it does feel like there's a bit more incoming competition into the international space these days. So 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
Miguel Martin
Executive Chairman & 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, 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

So 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

So while there is a lot of interest because of the growth and size of those markets, they're not easy to execute in. And so 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 what we see in Canada.

Derek Lessard
VP - Equity Research at TD Cowen

Yes, thanks for letting me go.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Thank you, Derek. We appreciate it.

Operator

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

Bill Kirk
MD, Senior Research Analyst at Roth Capital Partners, LLC

Hey, good morning, everyone. So I had a question on gross margin. I mean, obviously, it's already industry leading. I think it was said each segment gross margin is still expanding. Where do you think margins can go?

Bill Kirk
MD, Senior Research Analyst at Roth Capital Partners, LLC

And maybe what would be the major drivers to get there?

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Yeah, Bill, let me make a top line comment and then I'll let Simone dive down into it a little bit. So 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. So I think there's two drivers for us.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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. 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. So I think those are the big drivers. But Simona, any of the pieces you want to unpack?

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Yes, no, thanks Miguel. And to add a little bit more, and so we focused over the years on yield improvement and cost efficiencies in our operations. So that's definitely contributed to our improved margins over the quarters and compared to last year as well. And the other part that's impacting our margin in a favorable way is our portfolio mix where we're selling more and more in the medical cannabis space and especially in the international markets which have higher margins. And so putting these two factors together has contributed to the increase that you've seen over the quarters and also on an annual basis.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

And we provide this breakdown in terms of margin impact coming from our medical cannabis and the other business segments that we have. So we believe these margins will continue to be strong.

Bill Kirk
MD, Senior Research Analyst at Roth Capital Partners, LLC

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

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Yes, I would 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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

Bill Kirk
MD, Senior Research Analyst at Roth Capital Partners, LLC

Perfect, thank you.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Thank you, Bill.

Operator

Our next question is from Federico Gomez with ATB Capital Markets. Please proceed.

Frederico Gomes
Director, Institutional Research, Life Sciences 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 do you anticipate that you'd have to meaningfully expand your own cultivation or would there be any interest, I guess, in you doing that or is the strategy to maybe get that additional supplies from third parties cultivators? Thanks.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Yeah, Fred, we've not had to date any sort of supply constraints. So Simona mentioned our yield improvements. We've been able through our genetic facility out of 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

So 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
Director, Institutional Research, Life Sciences at ATB Capital Markets

Perfect. Thank you.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

You're welcome.

Frederico Gomes
Director, Institutional Research, Life Sciences at ATB Capital Markets

And then 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 UK, so the big markets.

Frederico Gomes
Director, Institutional Research, Life Sciences at ATB Capital Markets

But 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
Miguel Martin
Executive Chairman & 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. So 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

And The UK 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. Right next to it is New Zealand, and there's a lot of efficiencies in there. And beyond that, are seeing new markets come online like Switzerland and Austria.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

We've talked a little bit about some interest from countries like Ukraine. Short term will be these big large markets continuing to grow and opportunities to grow share because of the unique interest in that GMP flower, which is, you know, a limited commodity, but we continue to see positive developments internationally all around the world with governments looking at medical cannabis.

Frederico Gomes
Director, Institutional Research, Life Sciences at ATB Capital Markets

Perfect. Thank you.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Thank you, Fred.

Operator

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

Matt Bottomley
Managing Director, Equity Research at Canaccord Genuity Inc

Good morning, everyone. Thanks for the questions and congrats on a very strong fiscal year. Just first is sort of a follow-up question to Simona, 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.

Matt Bottomley
Managing Director, Equity Research at Canaccord Genuity Inc

So just trying to get a better indication of why adjusted EBITDA kind of took a step back there. And then just a secondary question on Australia, if I have time after that.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Sure. Simone, why you take the first one and I'll be happy to answer Australia unless it's a modeling question.

Simona King
Simona King
Chief Financial Officer at Aurora Cannabis

Sure. So 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 and A and that's due to an increase in of course supporting the revenue side and but also expected year expenses that we don't expect them to be recurring. So the increase in SG and A has also impacted our adjusted EBITDA margin. But of course, that's been offset by the increase overall in net revenue and adjusted gross margin impact that we saw in Q4.

Matt Bottomley
Managing Director, Equity Research at Canaccord Genuity Inc

Okay. Got it. Thanks for that. And then, yeah, I guess more broadly, just on Australia. So 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.

Matt Bottomley
Managing Director, Equity Research at Canaccord Genuity Inc

So Australia, we're getting a lot of positive commentary there. So 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 the growth prospects there. Obviously, it's a it's a very, relevant market going back to the early days of the Canadian LPs, and it seems like the traction starting to gain there. So maybe just a little more macro commentary on usage or what doctors are doing there would be helpful for our modeling.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Yeah, I think overall, we see Australia growing. It's hard without syndicated data to understand exactly, so it's hard for me to give you a percentage, but we don't see anything structural changing. Now, with all new regulatory environments, you're going to see scrutiny in different areas. And so it's not going to be a straight line, say quarter over quarter, But it is a market where we think you can garner large market share. So said differently, it's not a market where you're going to be susceptible for 1,000 players coming in.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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. And the pharmacies particularly have a lot of influence, particularly with the patients and in that category. So we like that market a lot.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

I think your other point of sort of inflection for Australia is the introduction of other formats beyond flour and oil. And we've seen that as we've launched pastels, or as they're known in North America, gummies. And we also see other items such as inhalables coming online. And so that all comes together, I think, for a subset of companies to be very successful in a growing market. And it's also one where we don't see a tremendous amount of price compression.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

There's definitely a lot of input coming in on the low end, but there's good pricing at the middle and on the premium side. And as I mentioned earlier, don't go to sleep on New Zealand. I know it's smaller, but there is a lot of opportunity there. It is a very, very long and challenging registration process, and one that we've been working on for a while. And so that is probably going to be an even more consolidated market in terms of market share.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

But it's got a long history with medical cannabis and is a really good market. So the combination of the two, while challenging from a distance standpoint and the amount of investment you have to make, we think will be a very, very strong markets going forward.

Matt Bottomley
Managing Director, Equity Research at Canaccord Genuity Inc

Okay. Thanks all. Appreciate it.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Thank you.

Operator

Our next question is from Pablo Zuinik with Zuinik and Associates. Please proceed.

Pablo Zuanic
Managing Partner at Zuanic & Associates

Thank you. Good morning, everyone. Miguel, just one quick question in terms of Germany. You know, when we compare with some of The US states, 4% population penetration, in the case of Germany, only probably 0.4%. What do you think are the structural impairments on the demand and supply side for Germany to continue to grow in terms of penetration?

Pablo Zuanic
Managing Partner at Zuanic & Associates

0.4 still seems very low to me with the potential that we see in other U. S. States. But just talk about the impediments, the structural impediments. Thank you.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

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

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

There was 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.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

And then I think third is because it is very difficult in that market to have anything other than flour and oil, some of the other formats, even though there are some inhalables registered, aren't there. So you are correct that 0.4 is less than the 1% of Canada. But again, Canada's got almost eight years on Germany from a timing standpoint. And people should remember the size of the German economy and how quickly cannabis has grown there. And we don't see any step backs on medical cannabis.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

So while the overall penetration number may be low, I think it is one of the countries globally that everybody should keep an eye on. And 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. So 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
Managing Partner at Zuanic & Associates

Thank you. And just one quick follow-up. You know, obviously you have a very strong sales force talking to the doctors there, a very pharmaceutical, approach. But I could make the argument that the way the market is developing is more from the cash payers, more in call it, you know, maybe pseudo rec. And maybe the way to go to market there and promote your products is very different in that case.

Pablo Zuanic
Managing Partner at Zuanic & Associates

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
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Yeah. I mean, so you're describing what you have there, we would call that segment the self payors. So have self payors 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
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

But 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. And we think there's 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've interacted with doctors and patients in Canada, and we can translate that into Germany. And the best selling Canadian products that we have are the ones that we're launching in Germany, and that's going very well. It's a great point in terms of the different ways you have to execute, but we've been successful on both sides of it.

Pablo Zuanic
Managing Partner at Zuanic & Associates

Got it. Thank you.

Miguel Martin
Miguel Martin
Executive Chairman & CEO at Aurora Cannabis

Thank you, Pablo.

Operator

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

Miguel Martin
Miguel Martin
Executive Chairman & 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.

Operator

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

Executives
    • Kevin Niland
      Kevin Niland
      Director of Strategic Finance & IR
    • Miguel Martin
      Miguel Martin
      Executive Chairman & CEO
    • Simona King
      Simona King
      Chief Financial Officer
Analysts
    • Derek Lessard
      VP - Equity Research at TD Cowen
    • Bill Kirk
      MD, Senior Research Analyst at Roth Capital Partners, LLC
    • Frederico Gomes
      Director, Institutional Research, Life Sciences at ATB Capital Markets
    • Matt Bottomley
      Managing Director, Equity Research at Canaccord Genuity Inc
    • Pablo Zuanic
      Managing Partner at Zuanic & Associates
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