Aurora Cannabis Q1 FY2026 Earnings Call Transcript
Aurora Cannabis, Inc. (NASDAQ:ACB) reported its first-quarter financial results before the opening bell on Wednesday.
Below are the transcripts from the Q1 earnings call:
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OPERATOR
Greetings and welcome to Aurora Cannabis Incorporated Fiscal First Quarter 2026 Results Conference Call all participants will be in a listen only mode. A question and answer session will follow the formal presentation. The conference is being recorded today, Wednesday, Aug. 6, 2025. I would now like to turn the conference over to your host, Kevin Nyland, Senior Director of Strategic Finance and Investor Relations. Please go ahead, sir.
Kevin Nyland (Senior Director of Strategic Finance and Investor Relations)
Hello and thank you for joining us. With me are Miguel Martin, executive chairman and CEO Mona King, CFO. Earlier this morning we filed our financials for the first quarter 2026 period ending June 30, 2025 and issued a news release containing these results. This news release along with our financial statements and MDA are available on our IR website as well as via SEDAR plus and edgar. Our discussion today gives a reminder that certain matters could constitute forward looking statements that are subject to risks and uncertainties and relating to our future financial or business performance. Actual results could differ materially from those anticipated in those forward looking statements. Risk factors that may affect actual results are detailed in our Annual Information form and other periodic filings and registration statements. These documents may similarly be accessed via SEDAR plus and EDGAR. Following prepared remarks by Miguel and Simona will conduct a question and answer session when we’re covering all questions. With that, turn the call over to Miguel. Please go ahead.
Miguel Martin (Executive Chairman and CEO)
Thanks Kevin. We’re executing our strategy within Global Medical Cannabis and delivering strong results through sustained, profitable growth. Our financial performance demonstrates Aurora’s differentiated platform that is supported by a strong and flexible balance sheet. We hold a sizable cash balance which increased to 186 million at quarter end and our cannabis business is debt free. Importantly, we have no intention or need to raise capital through an at the market or ATM program as some competitors are doing which is dilutive to shareholders. These attributes position us very well relative to the industry. Turning now to key highlights from first quarter 2026 relative to the year ago period. First, net revenue rose 17% to $98 million which included global medical cannabis revenue increasing 37%. International revenue grew 85%. Second, adjusted gross margin improved 1,000 basis points to 52% as we benefited from higher cannabis margins and finally adjusted EBITDA more than doubled to 11 million. We also generated positive free cash flow of $9 million. Aurora is a leader of Global Medical Cannabis, the industry’s highest margin segment. We are best positioned to deliver high quality products to patients worldwide. Our products meet and exceed the highest international standards through our unparalleled scientific knowledge, genetics, breeding and regulatory expertise. With leading market positions In Canada, Australia, Germany, Poland and the UK also quickly capitalize on new medical cannabis opportunities as they emerge in other markets. We are the largest Canadian exporter of high quality medical Cannabis with multiple GMP certified facilities representing 90% of our annual manufacturing capacity. It is these world class manufacturing facilities which give us the flexibility and consistency of supply to successfully compete in the rapidly expanding high margin international medical cannabis market. Aurora’s differentiation is also reflected through our lower production costs made possible by our focus on yield improvement and operational efficiencies. Additionally, we have invested in new cultivation technology to meet product demand while establishing strong third party partnerships that enable us to optimize our production planning to meet demand. Our ability to generate top-tier margins. And pricing is a function of selling high quality premium products. Portfolio mix is also favorably impacting margins as we are selling more medical cannabis than ever before which is further benefited by by our continued focus on expansion into key high margin international markets. Let’s now dive into our global cannabis business. Whether in Australia, Western Europe or even parts of Eastern Europe, we are executing on what we believe are great opportunities. There are two key factors that set Aurora apart from our competitors. First, most markets require certifications such as TGA GMP in Australia and EU GMP in Europe that we already have. Second, we have spent close to a decade investing in the resources and infrastructure required to be successful in these markets. After Canada, Australia is our next largest market. Single market for medical cannabis and where we hold the number two share. This market is highly regulated, growing rapidly and attracting new entrants and we are confident in our positioning. We have great relationships with distributors and pharmacies and this provides an effective moat for our business. While our own growth is not always linear, the nearer and longer term trajectory is clear based upon expanded patient accessibility and an expanded array of treatment formats and potency options. We believe that the Australian market will not have a large number of operators and in our view it will remain a consolidated market with only a subset of companies being successful like Aurora. On a related note, we are excited by the opportunities in New Zealand, an emerging and growing market. Our regulatory expertise allows us to successfully navigate the complex and timely product registration process which creates a high barrier to entry resulting in a more consolidated market than Australia. Turning to our European markets beginning with Germany where we are both growing and gaining market share. De-scheduling in April of 2024 has resulted in more patients registered and pharmacies working to support higher prescription volumes. We would characterize Germany as a permissive regulatory regime where there was a clear path for patients to obtain prescriptions and including by telemedicine and shipment of medical cannabis is legal through the mail. With the new government in place, we do expect that there could be some regulatory changes and while it is still preliminary, we do not see any immediate: indication of a significant rollback in medical. Cannabis regulations that would impact our current growth plans. Ultimately, we believe that established operators with a proven track record like Aurora will be able to successfully navigate and any potential regulatory changes and continue to supply German patients in this growing market. Germany is being carefully observed across Europe and its potential impact on neighboring western and Eastern European countries is significant. There is already broad support for legalization of medical cannabis throughout the region. New markets like Switzerland and Austria are online with France, Turkey and Ukraine showing positive developments for medical cannabis as well. Let’s now discuss Poland where we are a trusted leader in advancing the medical cannabis market. When we reported our fiscal fourth quarter in June, we discussed temporary headwinds following the regulatory changes that impacted prescription volumes. These headwinds have been resolved during the first quarter as strong demand has resumed for our high quality product offerings. At the tail end of the first quarter we announced the launch of two new proprietary cultivars in Poland marking the highest potency medical cannabis products available in the country. Grown and manufactured in our GMP certified Canadian facilities, these premium medical cannabis products are quickly becoming a new preferred choice for Polish patients in the uk. We continue to expand our distribution through new partnerships and successfully launch proprietary cultivar specific and salable cannabis extracts. These innovative 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, our Canadian medical net revenue grew year over year as we benefited from high revenue from both insurance covered and self paying patients. We also continue to lead this market with the number one market share. Our priorities are investments in our online marketplace through innovation, increased product assortment, operational excellence and ensuring a high quality patient experience. To further support Canadian patients, we recently expanded the eligibility of our Medical Compassionate Pricing program and for a third consecutive year we have continued our Strains for Heroes initiative through collaboration with veteran communities and organizations across the country. In short, we had another successful quarter executing on our strategic priorities and are excited about our future. Let me now turn the call over to Simona for a detailed financial overview of fiscal Q1 followed by a discussion of our outlook for fiscal Q2.
Simona
Thank you Miguel. Our strong quarterly performance underscores the effectiveness of our medical cannabis strategy and reflects consistent execution against our stated plan that. Is delivering sustained, profitable growth. Let’s now delve deeper into Q1 2026. Before discussing our Q2 2026 outlook, first, net revenue of $98 million represented 17% growth supported by net revenue from Our global medical cannabis, plant propagation and consumer cannabis segments. Second, quarterly …