Aurora Cannabis Q3 2026 Earnings Report

Aurora Cannabis EPS Results

• Actual EPS: $0.09
• Consensus EPS: $0.10
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Aurora Cannabis Revenue Results

• Actual Revenue: $68.59 million
• Expected Revenue: $92.39 million
• Beat/Miss: Missed by -$23.80 million
• YoY Revenue Growth: N/A

Aurora Cannabis Announcement Details

• Quarter: Q3 2026
• Date: 2/4/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, February 4, 2026
• 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 Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Aurora delivered a solid Q3 with net revenue up 7% to CAD 94.2M, medical revenue up 12%, adjusted gross margin of 62% (medical 69%), adjusted EBITDA of CAD 18.5M, adjusted net income of CAD 7.2M, positive free cash flow of CAD 15.5M, and CAD 154M in cash with no cannabis-related debt.
• Positive Sentiment: Management is refocusing on higher-margin global medical cannabis by exiting select Canadian consumer markets and selling its controlling stake in Bevo, and filed an At‑the‑Market program to raise up to CAD 100M for accretive uses like GMP cultivation and M&A to accelerate international growth.
• Positive Sentiment: International operations are a key strength — Germany drove double-digit international growth, Aurora is doubling production at its German GMP site, holds #2 share in Australia and #1 in Poland, and emphasizes EU/TGA GMP-certified manufacturing as a durable competitive advantage in regulated markets.
• Negative Sentiment: Near-term headwinds include expected one-time Q4 cash costs tied to market exits/divestitures, a decline in plant propagation adjusted gross margin to 16% (including a CAD 1.1M inventory write-off), and a 48% drop in consumer cannabis revenue, which may pressure Q4 cash flow and reported revenues.

Presentation

[Operator]

Welcome to the Aurora Cannabis Inc. Third Quarter 2026 Results Conference Call. All participants will be in a listen-only mode, and a question-and-answer session will follow the formal presentation. This conference call is being recorded today, Wednesday, February 4, 2026. 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 Head of Investor Relations at Aurora Cannabis]

Hello, and thank you for joining us. With me is Miguel Martin, Executive Chairman and CEO, and Simona King, CFO. Earlier this morning, we filed our financials for the fiscal third quarter 2026 period, ending December 31, 2025, and issued a news release containing these results. This news release, along with our financial statements and MD&A, is available on our IR website, as well as via SEDAR+ and EDGAR. We have also posted our investor presentation to our IR website for reference purposes. Our discussion today serves as 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 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.

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

These documents are similarly accessed via SEDAR+ and EDGAR. Following our prepared remarks, 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, Executive Chairman and CEO at Aurora Cannabis]

Thanks, Kevin. Our quarterly performance reflects our strong competitive position in the rapidly expanding global medical cannabis market and continued commitment to profitable and sustainable growth. This success is supported by our proven commercial execution and purposeful investments in science, technology, and talent. Additionally, our dedicated focus on improving patient access and strengthening physician engagement has contributed significantly to these results in fiscal Q3. Let's begin with a brief review of the quarter. First, net revenue increased 7%, driven by a record 12% growth in global medical cannabis revenue, including a 17% increase internationally. Notably, more than half of our total net revenue was generated outside of Canada. Second, adjusted gross margin rose 100 basis points to 62%, where we benefited from strong medical cannabis margins of 69%, which was the result of sustained growth in our higher-margin international markets.

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

Third, profitability held strong, with adjusted EBITDA of CAD 18.5 million and adjusted net income of CAD 7.2 million. And finally, we generated positive free cash flow of CAD 15.5 million and maintained our strong balance sheet with over CAD 150 million in cash and the absence of cannabis business-related debt. Unlike most peers, we have focused on medical cannabis as the most promising industry segment for nearly a decade. We have therefore deployed considerable resources and investments, providing us with the following competitive advantages. We are one of Canada's largest global medical cannabis, cannabis companies. We are Canada's leading exporter of medical cannabis. And finally, we are a market leader in the three biggest nationally legal medical cannabis markets outside of Canada.

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

Notably, about 90% of our annual manufacturing capacity is produced within Aurora's European and TGA GMP-certified facilities and is subject to very stringent international standards. These standards are only increasing, significantly limiting the number of market participants. There is a limited number of cannabis companies, like Aurora, that have regulatory certifications for their manufacturing facilities that permit shipments directly to European and Australian markets. Aurora manufactures most of its own products and distributes them compliantly and profitably. This advantage helps to ensure consistency of supply around the world, critical to both prescribers and patients, and achieves lower manufacturing costs through higher yields, potency improvements, and other operational efficiencies. As this industry evolves, maintaining our momentum in global medical cannabis requires an even greater commitment. This entails dedicating our full attention to solidifying and growing our leadership position. Following a strategic review, we have identified the following actions.

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

First, we will begin exiting select markets within the lower Canadian consumer cannabis segment, enabling us to further prioritize allocating products and resources to our higher-margin global medical cannabis business. Since consumer cannabis carries higher sales and marketing expenses than medical, this will benefit adjusted SG&A and consolidated adjusted gross margins in the coming quarters. While we expect some one-time costs that will impact cash flow in fiscal Q4, once the initiative is complete, we anticipate higher adjusted EBITDA contributions thereafter. Second, in relation to our plant propagation business, we are divesting our lower-margin plant propagation operations by selling our controlling stake in Bevo to its other principal shareholders. Combined, these actions will allow us to allocate capital more effectively, deliver enhanced profitability, streamline our operations, and improve execution quality. On a related note, today we filed a prospectus supplement establishing a new At-the-Market equity program.

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

The ATM provides us the flexibility to issue and sell up to $100 million of common shares from time to time at our discretion. The company intends to use proceeds raised under the ATM program, if any, for strategic and accretive purposes only, including for increased cultivation capacity and potential M&A. With that, let's now dive into our individual medical cannabis markets. Germany is the largest individual medical cannabis market in Europe and remains closely watched across the region due to its outsized influence on neighboring countries. More than half of EU member countries have already integrated medical cannabis into healthcare, including reimbursement, which leads towards greater international alignment on regulatory approaches. This provides an obvious advantage for compliant EU GMP-certified companies like Aurora. The German market is still growing and was the primary driver of our double-digit growth in international revenue.

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

According to German regulatory data, imports reached 72 metric tons in 2024 and are estimated to have more than doubled in 2025. Our successful commercial execution and strong reputation among wholesalers, distributors, and pharmacists have enabled us to continue to gain share in this rapidly growing market. We have consistently maintained a broad selection of core and premium products for the German market. However, more recently, we enhanced our offerings by introducing a new medical cannabis brand that prioritizes affordability and expands patient options without compromising quality standards. While increased competition in Germany has led to some price pressure, mainly affecting the value segment as new players enter and grow, our core and premium products, which represent most of our sales volume, have remained largely unaffected in terms of baseline pricing.

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

The German government is considering modifications to the current telehealth framework related to cannabis descheduling, but it is still unclear how developments will unfold. We want to ensure that reasonable access to high-quality medical cannabis for the general public is maintained, but should changes be implemented within telehealth, we will adapt, just as we did in Poland. We are currently doubling production at our manufacturing site in Germany. Increasing scale will facilitate yield improvements and operational efficiencies, allowing this facility to mirror the performance of our Canadian sites based upon the same industry-leading genetics and product consistency. In addition to the planned operational improvements, our German site joins our Canadian facilities that were recently GMP certified for another three years. This consistent supply of GMP-manufactured product is vital as we prepare for further growth in Germany and adjacent regulated markets.

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

Australia remains our largest international medical cannabis market, where we currently hold the number two share in what could become a AUD 1 billion opportunity, according to the Penington Institute. Notably, most sales in Australia, both for MedReleaf Australia, which we fully acquired two years ago, and for the market overall, are concentrated in value price products. This differs significantly from our other international medical cannabis markets, where our portfolio is anchored in core and premium offerings with stronger margins. We are actively working to shift our Australian sales mix towards the same world-class core and premium products we offer globally and expand patient access, including through additional distribution agreements. The Australian market is particularly attractive and positively impacting patient outcomes, as it offers one of the broadest product format ranges outside of North America, enabling us to fully leverage our diverse portfolio beyond flower and oils.

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

While we are confident in our ability to successfully elevate the product mix, we are working through some anticipated near-term pressure on both sales and gross profit during the transition. In Poland, through continued collaboration and effective commercial execution, we gained market share and held the number one position in calendar year 2025. We're widely regarded as a key partner in advancing medical cannabis in the country and are benefiting from increased annual import limits, including in fiscal Q3, which further supports our continued growth potential. The market has certainly evolved, but we have successfully navigated the shift in prescriptions from telehealth platforms to clinics, while maintaining solid relationships with the regulatory authorities. In our view, we are well-positioned to maintain this leadership position in Poland, thanks to our very skilled team engaging with all the key stakeholders and our broadening product portfolio of high-quality medical cannabis products.

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

We recently expanded our product portfolio with the launch of a third proprietary cultivar in Poland, following market success in Canada, Germany, and Australia. These new cultivars are grown and manufactured in our GMP-certified facilities, using premium hang drying and curing techniques to ensure consistently high-quality standards. In the U.K., we primarily operate in the premium and super premium segments, where there is less competition, but an influx of value products in the market resulted in lower year-over-year sales during fiscal Q3. Our strategy is focused on expanding our distribution and clinic relationships through new partnerships, a critical step to onboarding and connecting with patients. Turning to Canada, we remain a strong leader in medical cannabis. Net revenue grew year over year during fiscal Q3 to a new record, and we gained market share, a key point of differentiation for us in a competitive market.

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

Our priorities are enhancing our online marketplace, product innovation, and assortment, and ensuring a high-quality patient experience, especially for our valued veteran patients. In summary, we are reallocating and directing our resources to focus primarily on the global medical cannabis market, where we excel and see runway for growth. This involves gradually scaling back our Canadian consumer cannabis operations and are selling our controlling interests in our plant propagation business. We believe this approach will improve our operational efficiency, unlock greater opportunities in both our existing markets and new countries, and drive sustainable revenue growth and profitability. Let me now turn the call over to Simona for a detailed financial review of fiscal Q3, followed by an outlook discussion.

[Simona King, CFO at Aurora Cannabis]

Thank you, Miguel. We are encouraged by our fiscal Q3 results, as reflected in our revenue growth, strong adjusted EBITDA, positive adjusted net income, and free cash flow. Time and again, we have demonstrated the soundness of a medical cannabis-first strategy and our consistent ability to deliver results aligned with our long-term objectives. Let's review fiscal Q3 2026, compared to the prior year quarter, and then discuss our outlook for the full year. First, net revenue of CAD 94.2 million represented 7% growth, supported by record contributions from our global medical cannabis and plant propagation segments. Second, consolidated adjusted gross margin rose 100 basis points to 62%, while adjusted gross profit reached CAD 55.6 million, a 6% increase. Global medical cannabis held its robust 69% adjusted gross margin.

[Simona King, CFO at Aurora Cannabis]

Third, adjusted EBITDA was strong at CAD 18.5 million, combined with adjusted net income of CAD 7.2 million. Fourth, we generated positive free cash flow of CAD 15.5 million. Finally, we ended the quarter with CAD 154 million in cash, cash equivalents, and short-term investments, and no cannabis business debt. In medical cannabis, net revenue rose 12% to CAD 76.2 million, inclusive of 17% growth internationally. We benefited from increased distribution in Germany and new product offerings in Poland, which combined with continued strong contributions from Canadian medical. Medical cannabis comprised 81% of net revenue, compared to 77% in the prior year, and approximately 95% of adjusted gross profit.

[Simona King, CFO at Aurora Cannabis]

Adjusted Gross Margin for medical cannabis held strong at 69%, driven by high-margin international markets that benefited from sustainable cost reductions, high selling prices, and operational efficiencies, including sourcing for Europe from Canada. Consumer cannabis net revenue was CAD 5.2 million, down 48% from CAD 9.9 million. The year-over-year change was the expected result of the company's strategic shift to focus on portfolio optimization and the allocation of cannabis flower to the highest margin business segments. Adjusted gross margins for consumer cannabis was 28%, compared to 26%, due to sales of higher-margin products. Bevo's plant propagation net revenue increased to CAD 11.3 million, up 27% from CAD 8.9 million in the prior year. Adjusted gross margin for plant propagation revenue fell to 16%, compared to 40%.

[Simona King, CFO at Aurora Cannabis]

The decrease was due to increased contract labor and utilities costs, as well as inventory write-offs of CAD 1.1 million in the current quarter related to surplus plants. Consolidated adjusted SG&A increased 14.5% to CAD 35.8 million. The year-over-year change relates to higher professional fees, as well as additional headcount and contract labor costs in Europe and Australia that are supporting these growing higher-margin markets. Adjusted EBITDA was CAD 18.5 million, compared to CAD 19.4 million in the prior year, with the decrease primarily related to lower adjusted gross profit in the plant propagation segment and an increase in adjusted SG&A. Adjusted net income held relatively consistent at CAD 7.2 million, compared to CAD 7.4 million in the prior year. Our balance sheet remains one of the strongest in the global cannabis industry, and our cannabis operations are completely debt-free.

[Simona King, CFO at Aurora Cannabis]

Free cash flow was CAD 15.5 million, compared to CAD 27.4 million in the prior year quarter, reflecting a decrease in the working capital recovery of CAD 9.2 million. Let me now provide some thoughts on what we expect for our fiscal year 2026 outlook, which ends on March 31st. Annual global medical cannabis net revenue is expected to increase year-over-year to between CAD 269 million and CAD 281 million, driven primarily by 10%-15% growth in the global medical cannabis segment. Plant propagation revenue is expected to perform in line with traditional seasonal trends, as 65%-75% of revenues are normally earned in the first half of a calendar year.

[Simona King, CFO at Aurora Cannabis]

Consolidated adjusted gross margins are expected to remain strong, as we have benefited from favorable sales mix due to higher global medical cannabis revenue, along with operational efficiencies in our manufacturing sites. Finally, annual consolidated Adjusted EBITDA is anticipated to increase year-over-year with an expected range of CAD 52 million-CAD 57 million, representing 5%-10% annual growth. This expected growth is driven primarily by net revenue increases and industry-leading margins in the global medical cannabis business. 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 primary objective is to grow our business by capitalizing on the rapidly evolving global medical cannabis opportunity, which is projected to surpass $9 billion, thereby maximizing shareholder returns. We have established a strong competitive position by first building deep regulatory and world-class genetic capabilities, supported by an extensive network of GMP manufacturing facilities, and then demonstrating consistent commercial execution excellence. This approach has enabled us to be a market leader with both healthcare providers and patients. Through our focused commitment to global medical cannabis, we will reinforce our market-leading presence in Canada, Europe, Australia, and New Zealand and expand into additional markets as opportunities arise. We look forward to providing updates on our progress and strategic direction as we advance. Operator, we are now ready to take questions.

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two 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. One moment, please, while we poll for questions. Our first question comes from Kenric Tyghe with Canaccord Genuity. Please proceed with your question.

[Kenric Tyghe, Director of Equity Research of Special Situations at Canaccord Genuity Corp.]

Thank you, and good morning. Congrats on the quarter. I just wanted to follow up on the select market exit in Canada. Now, if we looked at a number on the print, you're looking at roughly a CAD 20 million in revenues, business on a go forward. Could you sort of speak to, you know, what the run rate would look like on a select on the exit from those markets, and perhaps also whether there's a point in time whether you could or would essentially fully exit consumer cannabis in Canada?

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

Yeah. Good morning, and thank you for the question. You know, we're continuing to evaluate exactly what that looks like. I think what I can say, though, is that, you know, those decisions will be, you know, beneficial or accretive to our overall financial results. What we've seen is that the reallocation of our resources, particularly that, you know, finite, high-quality flower into the international market, will make a significant difference in our overall financials. And so, you know, it's a bit of an evolution for us. The other point I guess I'd make is this isn't anything new. You've seen us continue to prioritize global medical cannabis over the last couple of years and done it very sort of successfully as we've gone through, and so we'll continue to be a bit flexible.

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

Now, your point about would we ever get out completely, I, I think that's, you know, something we continue to evaluate. We've been in, you know, rec cannabis or consumer cannabis in Canada since day one, and so we still have that touch point. But again, our focus is profitability and, and growth, and, you know, if that is a decision that looks like it's best suited to be exclusively on the medical cannabis side, it, it's something we would do.

[Kenric Tyghe, Director of Equity Research of Special Situations at Canaccord Genuity Corp.]

Great. Thank you, Miguel. And just a quick one with respect to Australia. You know, this premiumization strategy or sort of moving upmarket in Australia, how disruptive is that shift to your presence in the market? And, you know, what are your expectations around timeline when we can sort of get a better handle on how this will, you know, play out and the benefits for that Australian business and what that Australian business will look like once you've sort of high-graded your portfolio in the market?

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

Yeah, I don't think it... Well, thank you for the question. I don't think it's disruptive at all. I mean, Australia really started out, you know, in under a model they call a concession model and a value model for those patients. And as we talked about, it's quite a large and diverse market, and there is an expansion and an interest by both prescribing physicians and patients for a variety of products on the premium side. And as you well know, it's not just flower and oil. So we run globally a premium and core model, so it's not disruptive for us at all, and it's very accretive in terms of margins. And so we know there's a lot of value flower available in Australia, like other markets, whether it's Germany, Poland, the U.K., or Canada.

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

You know, our sweet spot is the genetics, production, and delivery of core and premium medical cannabis products, and so, you know, sits right in the middle of all that. So I think it's consistent and not disruptive in any way.

[Kenric Tyghe, Director of Equity Research of Special Situations at Canaccord Genuity Corp.]

Great. Thank you. I'll get back in queue.

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

You got it. Thank you.

[Operator]

Our next question comes from Derek Lessard with TD Cowen. Please proceed with your question.

[Derek Lessard, Director of Equity Research at TD Cowen]

Yeah. Good morning, everybody. Probably past the acceptable timeframe, but Happy New Year anyways, and a great start to it.

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

Happy New Year, Derek. I think the snow makes that timing and that point relevant, but go ahead.

[Derek Lessard, Director of Equity Research at TD Cowen]

Yeah, a couple questions for me. Just maybe talk about the strategic decision to exit the plant propagation and sort of the timing around the expected close of the transaction.

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

... Sure. I mean, I think, you know, again, focus and execution on global medical cannabis is what we've proven, you know, we're best at and where the most profitability is. I think consistent with the announcement we made on the consumer business, you know, when we look at our resources and we look at the best use of our time and energy and focus, it really is in that area. And the investment in plant propagation, you know, while interesting for a period of time, you know, continued to evolve in a way that wasn't that. And so we saw a great opportunity in divesting that majority share to the shareholders that already exist there.

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

There are some economics that continue that allow us to participate, you know, in the success of that, including earn-outs and the facilities that we vended in. But when you look at, you know, investment and ROI of our time and resources, clearly with high growth markets, you know, such as Germany and Poland and UK, it makes a, you know, absolute sense for us to put all of our time and effort there. And I think, you know, if you look at the last quarter and you look at the last couple of years, you know, when we focus on global medical cannabis, you know, the results have always been positive.

[Derek Lessard, Director of Equity Research at TD Cowen]

Absolutely, makes sense, Miguel. And maybe just one for Simona. Appreciate the additional full guidance on the year. How should we think about the plant propagation contribution to EBITDA, I guess, for the full year and maybe for Q4?

[Simona King, CFO at Aurora Cannabis]

Yeah, and as we continue to finalize the closing conditions and implications to our financials, we will have a better sense of the pro forma in Q4. As a result of this divestiture, we will no longer be consolidating the financial results of the Bevo business, and will be treated as discontinued operations. So that will be the treatment going forward. And so I would say, Derek, the focus really should be on thinking through the implications to the global medical cannabis business and continuing to model and think about Q4 and the future around the strength of that business. So really, it's focusing on the global medical side.

[Derek Lessard, Director of Equity Research at TD Cowen]

Okay. And maybe one last one, I'll sneak one in, switching gears back to global medical. Sorry, you pointed to Poland as one of the contributors to growth, which is great to see. Just maybe talk about how you've been navigating the pressure there, or if anything has changed since last quarter. I think when you guys pointed to additional pressure, given the changes in the regs there related to restrictions around the online consultations.

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

Yeah, I mean, I think it's a great question. So, you know, these regulatory frameworks are evolving, albeit, you know, with a pretty specific, you know, scientific underpinning. We saw the change in Poland, as you mentioned, and what it required, you know, really was to lean back on a strong system. You know, product development, product registration, distribution, and specifically, you know, having a way to be able to connect the patients through clinics. And we were very quickly, you know, able to do that. I think, really built on the background of the strength of the medications and the reputation that we had, having physicians and patients want to get those, you know, products. And so we navigated quickly. Obviously, our results reflect that.

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

That's why, you know, we're encouraged by what's happening, you know, in Germany with what may land there, that we'll be able to do a, you know, a similar execution. So, you know, these regs continue to evolve, you have to be agile, but I think having, you know, tremendous relationships with them, we have a very strong GR organization, a very strong regulatory team, and so we are able to work with the regulators, you know, as things evolve, and, and we think that's a strength of ours.

[Derek Lessard, Director of Equity Research at TD Cowen]

Yeah, great job, everybody, and congrats again on the quarter.

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

Thank you so much, Derek. We appreciate it.

[Operator]

Okay, our next question comes from Bill Kirk with ROTH Capital Partners. Please proceed with your question.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Hey, thank you. Good morning, everybody. A point of clarity first. I have year-to-date global medical cannabis at CAD 211 million. The full year guide is CAD 269 million-CAD 281 million. Are those numbers comparable? Because even the high end would imply quarter-over-quarter deceleration in 4Q, and the low end would imply a big deceleration. So I guess the clarity point, am I looking at those numbers comparably?

[Simona King, CFO at Aurora Cannabis]

Yeah, so let me, let me jump in on that one. So the guidance that we provided is the full, the full revenue for the company, which is inclusive of, of Bevo in there. And so with this announcement today around the divestiture of our stake in Bevo, that's what we will be working through, is the pro forma impact of that in Q4. So again, it's continuing to focus on them as we think about the implications for Q4, with those results being removed and shown as discontinued operations, it's really focusing on the medical cannabis global medical cannabis revenues and trending those out. So keeping in mind that the full guidance was reflective of the total revenue.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Okay. Okay, because, in the press release, it says annual global medical cannabis is expected to be 269-

[Simona King, CFO at Aurora Cannabis]

Yeah

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

- to 281.

[Simona King, CFO at Aurora Cannabis]

Yes, yes, apologies. Yes.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Year-to-date, global medical cannabis is 211, right?

[Simona King, CFO at Aurora Cannabis]

Yes, yes, just to clarify that is correct. Global medical cannabis. And so, yes, we expect a strong quarter in Q4.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

... Wouldn't that be implied CAD 58 million-CAD 70 million in global medical cannabis? And I think you just did over CAD 75 million. So, I think I'm looking at something wrong, 'cause that would imply a big deceleration in 4Q global medical cannabis from 3Q, 2Q, 1Q.

[Simona King, CFO at Aurora Cannabis]

Yeah, yeah, yes, we, we do expect the ranges that we've provided in the, in the expectations in the press release to be in line where we're projecting the full year to come in at.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Okay. Then the follow-up would be, why do you expect a deceleration in 4Q?

[Simona King, CFO at Aurora Cannabis]

So, at this point, we're really focusing on the full year guidance, and the ranges that we provided, which we believe will be in line with where we're trending. You know, taking into account there could be some headwinds in some of the markets. So again, highlighting that this is a record result for us, on a full year basis.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Okay, thank you. And then one last one for me. The Adjusted Gross Margin in the wholesale business, I think it was 35% in the quarter. It's been higher than the consumer cannabis segment for a while. Why would the wholesale gross margin be higher than the consumer segment gross margin?

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

Well, for a couple reasons. One is that that consumer business, not only for us, but for others, you know, is tight. And when you look at fully loaded, where, where you sort of end up in that market, you end up with those type of margins. I mean, I think you've seen it in the industry. It's not, not just us. The wholesale business is pretty good. I mean, it's obviously not as good as, you know, when you distribute and sell it yourself. And so I think it's just indicative, you know, of what it is. The other aspect on the wholesale business is, you know, those products that we sell are not readily available, you know, all over the world because of some of the regulatory requirements. So I think it's inherent to, to what you're seeing in overall.

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

Like I said, you know, it's not just us on the consumer side.

[Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners]

Thank you. Appreciate it.

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

You got it. Thank you, Bill.

[Operator]

Our next question comes from Brenna Cunnington with ATB Capital Markets. Please proceed with your question.

[Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.]

Hey, good morning, and congrats on the results this quarter. Just looking at the ATM, so you mentioned, so the funds for this could go to M&A. And so we're just kind of wondering, like, are there any potential assets that you might be interested? Is it potentially, like, cultivation capacity, expansion opportunities, or any other top goals for the funds raised from this?

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

Yeah, and thanks for the question and the comment. You know, with over $150 million in cash, and then you add this, it really allows us to be opportunistic. Clearly, as you've seen from our announcement, you know, our focus and really what we excel at is around that global medical cannabis point, and there are many sort of aspects to it. Clearly, cultivation, you know, of GMP flower and products for the international market are always an area of interest for us. Beyond, you know, and the M&A point, we've invested over $40 million internally in significant, you know, capacity and quality upgrades in our existing facilities, which has helped us receive that GMP certification for another three years at three of them.

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

So cultivation, as you mentioned, always of interest to us, but there are other aspects to global medical cannabis, you know, that potential, you know, have the potential as well, whether, you know, that's on the distribution side or the clinic side or other aspects. So it's really to be opportunistic, and we intend, you know, to use that clearly not for operations, but for accretive, you know, aspects, including M&A. And so, you know, I would say it would be consistent with what we're focusing on, but the exact, you know, you know, aspects of it and, and what it might be, you know, we're not in a position to say yet, but we'll obviously update folks as that becomes, you know, more specific.

[Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.]

Okay, perfect. Fair enough. And then just looking at the exit from a lot of the consumer cannabis in Canada, what type of SG&A savings might we see from this?

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

Yeah, I mean, we're continuing to value that. I mean, I would say, you know, you'll see some of that reporting as you see the full year and then into Q4. We definitely think it's gonna be a benefit, though the other aspect, you know, beyond the SG&A savings is taking those inputs, as you heard from the previous question, and putting them into higher margin markets. So, you know, the differential between the margins of, say, you know, our consumer business and international markets is significant, and you've seen where the overall margin landed. So I think, you know, more to follow on what it is. You heard from Simona's comments about the benefits that we believe financially that will provide us. We look forward to sharing that with you once those sort of work their way through.

[Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.]

Perfect. And then if I could just sneak in one little last one.

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

Sure.

[Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.]

On the international markets, just out of curiosity, are there any other international markets that you may be looking at?

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

I mean, we look at all of them as they come online. You know, we're in 12 countries today. We've got a regulatory team and a product registration process that, you know, has allowed us to enter every market that's come online. You know, typically, we like to have markets that, you know, have a science, you know, sort of thorough regulatory profile, which we're starting to see, you know, in Europe. So the latest new markets, you know, that are bringing medical cannabis on, places like Switzerland, Austria, France, and some others, you know, we are working to bring our products into those markets. But we're very excited about, you know, potential developments, you know, in other new countries, such as, say, Ukraine and Turkey.

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

Again, we've been very successful because of our stringent regulatory requirements and EU GMP products to be able to enter them as they come online. We continue to see global growth. I know there's a lot of interest in the U.S., but, you know, we've seen the growth in medical cannabis regulations and overall systems throughout Europe and, and in parts, other parts of the world. And so we'll be there, you know, as they come online, and I think we've demonstrated, you know, we can be successful not only launching but also sustaining our business in those markets.

[Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.]

Understood. Thank you so much for the color. I'll jump back in the queue.

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

Thank you very much.

[Operator]

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

[Pablo Zuanic, Founder and Managing Partner at Zuanic & Associates]

Thank you, and good morning, everyone. Miguel, I also want to discuss supply chain, but just first, one question on the U.S. In your opinion, if we get rescheduling, as it's been announced, would that allow you to enter the U.S. market? Are we thinking it, we're gonna have a federal legalization of medical cannabis? Will Aurora be able to participate given its expertise, or, or the rescheduling doesn't necessarily mean federally legalizing medical cannabis? What's your opinion on that?

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

You know, it's early days, Pablo, and good morning. You know, first and foremost, what the Trump administration announced is very consistent with what we've said, you know, is important. Medical cannabis first, you know, a regulatory, strong regulatory approach, and we think that lines up beautifully for a company like Aurora, you know, that operates in, you know, regulated markets all around the world. You know, as it's been laid out, and we haven't seen any of the final details of what a Schedule I to Schedule III would look like. It does not allow a Canadian company traded on the NASDAQ to directly go into that market. It does expand research. It does, you know, start to open the door for some variety of different things, but, you know, we'll have to see what the details look like.

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

But, you know, it is a step in the right direction, and we're very encouraged by that. But again, it was a very strong medical message. You know, that photo op in the White House with doctors and, you know, folks from the medical community really reinforces what we've always believed, you know, which is this will be a medical-first opportunity, which is why we think Aurora is so well positioned when we get there.

[Pablo Zuanic, Founder and Managing Partner at Zuanic & Associates]

Thank you. Look, regarding supply chain, it's a bit of a two-part question in terms of understanding what you have right now and then how you're thinking about acquisitions. In terms of what you have right now, you know, for example, you say in the call that most of the products that you sell are owned Aurora products, grown in your facilities, but does that mean 51%, 90%? If you can give some color in terms of how much you're buying from third parties, that would help. A reminder of what you have in terms of your current facilities, and looking back, you know, lessons from the Aurora Sky facility. So that part of the question in terms of what you have now. In terms of buying cultivation capacity, are we talking about indoor versus greenhouse?

[Pablo Zuanic, Founder and Managing Partner at Zuanic & Associates]

Are we talking about small, little craft growers? Are we talking about just Canadian or maybe other countries? Any color in that sense would help. Thank you.

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

Sure. So we, the majority, you know, I'm not gonna give you a number, but it's closer to 100 than it is to 50, of the products that we sell internationally, we produce, distribute, and sell ourselves. A really important dynamic for everybody to understand is the GMP flower dynamic. That standard is getting more challenging. It is difficult, and once you get that certification, which you need to have, say, for Germany, the fastest-growing market in Europe, you have it for three years. So we've got, you know, three of our largest facilities just received that certification, which is very exciting. And so GMP, you know, premium flower, those prices continue to be solid and in some cases go up and is our focus.

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

In terms of, you know, facilities and, and potential acquisition, we have the benefit of having one of the largest genetic facilities in the world, a facility called Aurora Coast off the West Coast, Canada. Those genetics that are created there, that we use ourselves and also sell to others, have been successful both in indoor, which is our primary method of current growing, as well with greenhouses, which many of our, you know, customers use those genetics. So both work, and we, you know, you can get GMP certification in both. We obviously have a long history in indoor, but that doesn't mean, you know, that we are, you know, bound to it.

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

I will say Canada continues to be, you know, the best place to grow high-quality, premium GMP flower in the world, and we're proud of that, and, you know, we continue to see great opportunities to ship it. So it's a big competitive advantage for us to be able to grow that much flower, be one of Canada's, or if not the largest, one of the largest exporters of GMP flower, and that's a core part of why we've been successful and will be successful going forward.

[Pablo Zuanic, Founder and Managing Partner at Zuanic & Associates]

Thank you.

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

You're very welcome.

[Operator]

We have reached the end of our question and answer session. There are no more further questions at this time. I would now like to turn the floor back over to Miguel Martin for a closing comment.

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

Thank you very much. We're very excited about this quarter and, more importantly, very excited about the future of Aurora Cannabis, and we're thrilled to share some color with you here today. We'll continue to update you. We hope everyone is safe and well. All the best.

[Operator]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

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

Analysts

• Kenric Tyghe, Director of Equity Research of Special Situations at Canaccord Genuity Corp.
• Derek Lessard, Director of Equity Research at TD Cowen
• Bill Kirk, Managing Director and Senior Research Analyst at ROTH Capital Partners
• Brenna Cunnington, Equity Research Associate at ATB Capital Markets Inc.
• Pablo Zuanic, Founder and Managing Partner at Zuanic & Associates