Aurora Cannabis Inc Earnings - Q4 2025 Analysis & Highlights
Aurora Cannabis Inc. reported strong Q3 2026 results, driven by significant growth in its global medical cannabis segment, strategic divestitures to enhance profitability, and a focus on expanding its leadership in international markets.
Key Financial Results
Net revenue increased by 7% to CAD 94.2 million in Q3 2026, supported by record contributions from global medical cannabis and plant propagation segments.
Adjusted gross margin rose 100 basis points to 62%.
Adjusted gross profit reached CAD 55.6 million, a 6% increase.
Adjusted EBITDA was CAD 18.5 million.
Adjusted net income was CAD 7.2 million.
Positive free cash flow of CAD 15.5 million was generated.
The company ended the quarter with CAD 154 million in cash, cash equivalents, and short-term investments, with no cannabis business debt.
Business Segment Results
Medical cannabis net revenue rose 12% to CAD 76.2 million, including 17% growth internationally.
Medical cannabis comprised 81% of net revenue, up from 77% in the prior year, and approximately 95% of adjusted gross profit.
Adjusted gross margin for medical cannabis held strong at 69%, driven by high-margin international markets.
Consumer cannabis net revenue was CAD 5.2 million, down 48% from CAD 9.9 million.
The decrease was due to the company's strategic shift to focus on portfolio optimization and allocating cannabis flower to higher-margin business segments.
Adjusted gross margins for consumer cannabis was 28%, compared to 26%, due to sales of higher-margin products.
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%, due to increased contract labor, utilities costs, and CAD 1.1 million in inventory write-offs related to surplus plants.
Capital Allocation
The company filed a prospectus supplement establishing a new at-the-market (ATM) equity program to issue and sell up to $100 million of common shares.
Proceeds from the ATM program are intended for strategic and accretive purposes, including increased cultivation capacity and potential M&A.
The company is divesting its controlling stake in Bevo, its lower-margin plant propagation operations, to its other principal shareholders.
The company will begin exiting select markets within the lower Canadian consumer cannabis segment to prioritize global medical cannabis.
Industry Trends and Dynamics
The global medical cannabis market is rapidly expanding and projected to surpass CAD 9 billion.
Germany is the largest individual medical cannabis market in Europe and influences neighboring countries.
More than half of EU member countries have integrated medical cannabis into healthcare, including reimbursement, leading to greater international regulatory alignment.
German imports reached 72 metric tons in 2024 and are estimated to have more than doubled in 2025.
The Australian medical cannabis market could become a CAD 1 billion opportunity.
Regulatory frameworks for medical cannabis are evolving, requiring agility from market participants.
Competitive Landscape
Aurora is one of Canada's largest global medical cannabis companies and Canada's leading exporter of medical cannabis.
The company is a market leader in the three biggest nationally legal medical cannabis markets outside of Canada.
Approximately 90% of Aurora's annual manufacturing capacity is produced in European and TGA GMP certified facilities, subject to stringent international standards.
These increasing standards significantly limit the number of market participants.
Aurora manufactures most of its own products, distributing them compliantly and profitably, ensuring consistency of supply and lower manufacturing costs.
In Poland, Aurora gained market share and held the number one position in calendar year 2025.
In Canada, Aurora remains a strong leader in medical cannabis, with net revenue growth and market share gains in fiscal Q3.
Growth Opportunities and Strategies
Aurora is reallocating resources to focus primarily on the global medical cannabis market, where it sees significant growth potential.
This involves gradually scaling back Canadian consumer cannabis operations and selling its controlling interest in the plant propagation business.
The company aims to improve operational efficiency, unlock greater opportunities in existing and new markets, and drive sustainable revenue growth and profitability.
In Germany, Aurora enhanced its offerings by introducing a new medical cannabis brand that prioritizes affordability and expands patient options.
Aurora is doubling production at its manufacturing site in Germany to facilitate yield improvements and operational efficiencies.
The company is actively working to shift its Australian sales mix towards world-class core and premium products and expand patient access through additional distribution agreements.
In Poland, Aurora expanded its product portfolio with the launch of a third proprietary cultivar.
In the UK, the strategy focuses on expanding distribution and clinic relationships through new partnerships.
In Canada, priorities include enhancing the online marketplace, product innovation, and ensuring a high-quality patient experience.
Aurora is exploring new international markets such as Switzerland, Austria, France, Ukraine, and Turkey.
Financial Guidance and Outlook
Annual global medical cannabis net revenue is expected to increase year-over-year to between CAD 269 million and CAD 281 million, driven by 10% to 15% growth in the global medical cannabis segment.
Plant propagation revenue is expected to perform in line with traditional seasonal trends, with 65% to 75% of revenues normally earned in the first half of a calendar year.
Consolidated adjusted gross margins are expected to remain strong due to a favorable sales mix and operational efficiencies.
Annual consolidated adjusted EBITDA is anticipated to increase year-over-year, with an expected range of CAD 52 million to CAD 57 million, representing 5% to 10% annual growth.
This growth is primarily driven by net revenue increases and industry-leading margins in the global medical cannabis business.
