Aurora Cannabis Q4 Earnings Call Highlights

Key Points

• Aurora Cannabis beat fiscal 2026 expectations, with net revenue of CAD 321 million, adjusted EBITDA up 32% year over year to CAD 54 million, and a year-end cash balance of CAD 165 million with no debt. Global medical cannabis was the main growth driver, and more than half of revenue came from outside Canada.
• Fiscal 2027 is expected to be a reset year as Canadian medical reimbursement changes pressure revenue and margins. Management said total net revenue and adjusted EBITDA should decline, even though growth in Germany and Poland and the exit from lower-margin businesses should partly offset the hit.
• Aurora is sharpening its focus on international medical cannabis by exiting lower-margin Canadian consumer and propagation businesses, expanding in Germany, and buying Safari Flower Company to boost EU GMP capacity. The company also said it is evaluating U.S. opportunities, but has no definitive plan yet.

Aurora Cannabis NASDAQ: ACB reported a stronger fiscal 2026 performance than it had forecast, driven by growth in global medical cannabis, while warning that fiscal 2027 will be a “reset year” as Canadian medical reimbursement changes weigh on revenue and margins.

Executive Chairman and CEO Miguel Martin said fiscal 2026 was “a strong year for Aurora,” with net revenue meaningfully above the company’s outlook and adjusted EBITDA above the midpoint of its guidance range. He said the results reflected Aurora’s focus on medical cannabis in nationally legal markets and disciplined financial management.

For the fiscal year ended March 31, 2026, Aurora reported net revenue of CAD 321 million, up 11% from the prior year and CAD 8 million above the top end of its guided range. Martin said about 55% of net revenue was generated outside Canada. Adjusted gross margin rose to 64%, and adjusted EBITDA increased 32% year over year to CAD 54 million. The company ended the year with CAD 165 million in cash and cash equivalents and no debt.

Medical Cannabis Drives Fourth-Quarter Growth

CFO Simona King said fourth-quarter net revenue rose 10% year over year to CAD 84.8 million, driven by 14% growth in global medical cannabis revenue, including a 19% increase internationally. She said 58% of total net revenue in the quarter was generated outside Canada.

Medical cannabis net revenue rose 14% to CAD 77.1 million, a record for combined Canadian and international net revenue, according to King. Medical cannabis represented 91% of total net revenue, up from 88% in the prior-year quarter. Adjusted gross margin for medical cannabis was 66%, down from the prior year due to sales of lower-margin products and strategic price reductions in certain markets.

Adjusted EBITDA for the quarter was CAD 9.2 million, while adjusted net income was CAD 5.6 million, compared with CAD 16.3 million in the prior-year period. King said the decline in adjusted net income primarily reflected higher adjusted SG&A, lower foreign exchange gains and lower interest income.

Consumer cannabis net revenue fell to CAD 3.6 million from CAD 8.2 million as the company shifted flower toward higher-margin medical cannabis and moved to wind down parts of the Canadian consumer segment.

Aurora Exits Lower-Margin Businesses

Martin said Aurora initiated its exit from certain lower-margin Canadian consumer markets during the fiscal fourth quarter, with completion expected by the end of September. He said the transition had one-time cash impacts in the quarter but would allow the company to redirect resources toward global medical cannabis.

The company also divested its lower-margin plant propagation business by selling its controlling stake in Bevo. King said the fiscal 2027 outlook reflects these strategic actions, which are intended to reallocate resources to “more attractive global medical cannabis markets.”

In April, Aurora acquired Safari Flower Company, a Canadian-based EU GMP-certified cannabis cultivator and manufacturer, for approximately CAD 26.5 million. Martin said the acquisition expands Aurora’s EU GMP capacity and supports supply of flower to international markets, particularly Germany. He said Safari’s 59,000-square-foot indoor cultivation and manufacturing facility in Ontario aligns with Aurora’s existing sites and is expected to contribute positive adjusted EBITDA in fiscal 2027, with incremental benefits in fiscal 2028 and beyond.

During the question-and-answer session, Martin said Safari was “absolutely accretive from the get-go,” adding that Aurora sees upside from introducing its genetics and cultivation practices.

Germany, Poland and Australia Remain Key International Markets

Martin said Germany was the largest contributor to Aurora’s double-digit international revenue growth in fiscal 2026, supported by commercial execution and the company’s reputation with wholesalers, distributors and pharmacists. He said Aurora has seen increased price pressure as new competitors enter the market, but that pressure has largely been concentrated in the value segment.

Because Aurora’s volume is weighted toward core and premium products, Martin said the company has maintained its leading market share in Germany. He also noted that two of Aurora’s proprietary cultivars ranked No. 1 and No. 3 by sales during the quarter.

Aurora is one of three active in-country producers of medical cannabis in Germany, Martin said, and the company is expanding its Leuna facility. The expansion is expected to be completed in the first half of fiscal 2027 and, along with proprietary cultivars, is expected to double annual flower output at the site.

In Poland, Martin said Aurora holds the No. 1 market share position and successfully navigated a shift from telehealth-driven prescribing to clinic-based prescribing. Poland was the second-largest contributor to international growth after Germany, he said. In Australia, Aurora is working to shift its sales mix toward core and premium products amid interest from physicians and patients.

Martin also pointed to potential market developments in France, Ukraine, Switzerland, Spain and Austria, saying Aurora’s GMP-certified portfolio positions it to enter new jurisdictions as they come online.

Canadian Reimbursement Changes Weigh on 2027 Outlook

King said fiscal 2027 will be shaped by changes to reimbursed pricing in Canadian medical cannabis, only partially offset by international growth. Total net revenue is expected to decline and be more in line with Aurora’s cannabis net revenue results in fiscal 2025, with growth driven by Germany and Poland partly offsetting the Canadian changes.

Adjusted gross margins are expected to be in the mid-to-high 50% range. King said higher revenue contributions from Europe and the exit from lower-margin businesses will partially offset lower Canadian medical margins following the reimbursement-rate reduction. Adjusted SG&A is expected to remain broadly in line with fiscal 2026, while annual adjusted EBITDA is expected to be lower than the prior fiscal year.

In response to a question from TD Cowen analyst Derek Lessard, Martin said the reimbursement change effective April 1 represents about a 30% reduction in the reimbursed rate for affected products. King said Aurora does not break out adjusted gross margins between Canadian and international medical businesses, but the Canadian reimbursement change is a driver of the company’s margin outlook.

Martin said early patient patterns have not changed materially since the reimbursement shift, telling ROTH Capital Partners analyst Bill Kirk that Aurora has not seen major changes in format or price-point choices so far.

Company Evaluates U.S. Opportunities

Martin said Aurora is encouraged by recent cannabis rescheduling developments in the U.S. and is considering reevaluating its U.S. strategy, but added that the company has “nothing definitive to announce” amid ongoing regulatory uncertainty.

During the Q&A, Martin said potential opportunities could include research partnerships, medical cannabis partnerships applying GMP standards, and possible import-export pathways depending on future regulations. He said the research opening in the U.S. could be significant for Aurora given its experience in medical cannabis.

Martin closed the call by saying Aurora is focused on converting what it views as a CAD 9 billion global medical cannabis opportunity into sustained shareholder returns, supported by investments in market share, GMP capacity, product innovation and international expansion.

About Aurora Cannabis NASDAQ: ACB

Aurora Cannabis Inc NASDAQ: ACB is a Canadian licensed producer of medical and consumer cannabis products headquartered in Edmonton, Alberta. Established in 2013, the company operates under Health Canada's regulations to cultivate, process and distribute a range of cannabis-based offerings. Since its initial public listing in 2017, Aurora has grown into one of the country's largest growers by cultivation capacity and production output.

The company's core business spans the cultivation of dried flower, the extraction of cannabis oils and the development of value-added products such as softgels, capsules and topical treatments.

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