Aurora Cannabis (US) ((TSE:ACB)) has held its Q3 earnings call. Read on for the main highlights of the call.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The latest earnings call from Aurora Cannabis (US) painted a promising picture of the company’s future, highlighting significant achievements in international market growth and profitability. Despite a drop in Canadian recreational revenue and rising SG&A expenses, the call underscored a robust financial standing and enhanced operational efficiency, projecting a positive outlook for the company.
Record-Breaking Revenue and Profitability
Aurora Cannabis achieved remarkable milestones in the third quarter, with record revenues in medical cannabis, net income, adjusted EBITDA, and free cash flow. Overall net revenue soared by 37%, fueled by a 112% year-over-year surge in international medical cannabis revenue.
Strong International Performance
For the second quarter in a row, international revenue outpaced Canadian medical cannabis sales, accounting for 60% of global medical cannabis net revenue. Markets in Australia and the UK saw record revenue levels, underscoring the company’s robust international performance.
All-time High in Adjusted EBITDA
The company reported an impressive 316% increase in adjusted EBITDA, reaching a record $23.1 million, which marked the ninth consecutive quarter of positive adjusted EBITDA, showcasing consistent financial growth.
Robust Financial Position
Aurora Cannabis concluded the quarter with a strong balance sheet, boasting $180.2 million in cash and cash equivalents and no debt related to its cannabis operations, positioning it well for future investments and growth.
Operational Efficiency and Margin Improvement
The company achieved a significant improvement in adjusted gross margin for medical cannabis, increasing to 74% from 63% in the previous year, driven by effective cost reductions and enhanced manufacturing efficiency.
Decline in Canadian Recreational Revenue
Canadian recreational cannabis revenue decreased to $9.9 million, down from $11.6 million a year ago, with adjusted gross margins dropping from 29% to 26%, indicating challenges in the domestic recreational market.
Increased SG&A Expenses
Consolidated adjusted SG&A expenses rose by 12.6% to $31.3 million compared to the previous year, supporting the 37% year-over-year net revenue growth, reflecting strategic investments to fuel expansion.
Forward-Looking Guidance
Looking forward, Aurora Cannabis anticipates continued growth, supported by a 37% increase in net revenue to $88.2 million, largely driven by a 51% year-over-year rise in global medical cannabis revenue. The company aims to capitalize on its strong cash position and absence of cannabis-related debt to explore further opportunities in international markets.
In summary, Aurora Cannabis’s latest earnings call conveyed an optimistic sentiment, highlighting record profitability and robust international growth. While challenges persist in the Canadian recreational market, the company’s financial health and strategic focus on efficiency and global expansion position it favorably for future opportunities.
