Full Press Release Details
Aurora Cannabis Announces Fiscal 2026 Third Quarter
EDMONTON, AB, Feb. 4, 2026 /CNW/ - Aurora Cannabis
Inc. (the "Company" or "Aurora") (NASDAQ: ACB) (TSX: ACB), a leading Canada-based global medical cannabis
company, today announced its financial and operational results for the third quarter 2026 period ending December 31, 2025.
"Aurora has established a commanding leadership
position within the rapidly expanding, high margin, global medical cannabis market. We achieved record quarterly net revenue1
of $76.2 million in our global medical cannabis business through double-digit growth internationally, led by Germany and Poland. Adjusted
EBITDA1 rose sequentially to $18.5 million and we generated free cash flow1 of $15.5 million. These results
validate our focused strategy and reinforce our confidence in the company's future," said Miguel Martin, Executive Chairman and Chief
Executive Officer for Aurora.
"Aurora's prioritization of medical cannabis
as the industry's most compelling growth area is anchored by our investments in key markets, world-class cultivation and GMP manufacturing
facilities, operational efficiencies, cutting-edge science and genetics, and regulatory expertise. Our success in these areas positions
us for potential M&A opportunities to expand capacity and further accelerate market opportunities," concluded Mr. Martin.
| [1] This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. See "Non-GAAP Measures" below for reconciliations of non-GAAP financial measures to GAAP financial measures. |
| [2] Cash refers to cash, restricted cash and cash equivalents. Aurora's only remaining debt is non-recourse debt of $62 million relating to Bevo Farms Ltd as detailed in the December 31, 2025 Financial Statements. |
Third Quarter 2026 Highlights
(Unless otherwise stated, comparisons are made
between fiscal Q3 2026 and Q3 2025 results and are in Canadian dollars)
Consolidated Revenue and Adjusted Gross Profit:
Total net revenue1 was $94.2 million, as compared to $88.2 million in the prior year period. The 7% increase from the
prior year period was mainly due to 12% growth in our global medical cannabis business and 27% growth in our plant propagation business,
slightly offset by lower quarterly net revenue1 in our consumer cannabis business.
Consolidated adjusted gross margin before fair value
adjustments1 was 62% in Q3 2026 and 61% in the prior year period. Adjusted gross profit before FV adjustments1 was
$55.6 million in Q3 2026 compared to $52.3 million in the prior year period, an increase of 6%.
Medical cannabis net revenue1 was $76.2 million, a new record, with a 12% increase from the prior year period, delivering
81% of Aurora's Q3 2026 consolidated net revenue1 and 95% of adjusted gross profit before fair value adjustments1.
The increase in medical cannabis net revenue1
of $8.1 million was primarily due to higher sales in Germany, and Poland, as well as higher revenue in Canada to insurance covered patients
related to broader portfolio offerings.
Adjusted gross margin before fair value adjustments1
on medical cannabis net revenue1 remained consistent at 69% for the three months ended December 31, 2025, compared to the prior
year period. The Company's ability to maintain high adjusted gross margins before fair value adjustments1 is primarily due
to sustainable cost reductions, higher selling prices, and improved production efficiencies.
Aurora's consumer cannabis net revenue1 was $5.2 million, a 48% decrease compared to $9.9 million in the prior year
period. The decrease was due to the continued decision to prioritize the supply of GMP manufactured products to the high margin global
medical cannabis business rather than the significantly lower margin consumer segment.
Adjusted gross margin before fair value adjustments1
on consumer cannabis net revenue1 was 28%, an increase from 26% compared to the prior year period. The increase is primarily
due to a shift in sales towards higher margin products.
Plant propagation net revenue1 contributed $11.3 million of net revenue1, a 27% increase compared to $8.9
million in the prior year period. The increase was a result of organic growth and expanded product offerings, both arising from increased
Adjusted gross margin before fair value adjustments1
on plant propagation revenue was 16% for Q3 2026 and 40% for the prior year period. The decrease is due to increased contract labour and
utilities costs to adjust to production schedules and inventory write-offs of $1.1 million in the current quarter related to surplus plants.
Adjusted Selling, General and Administrative
Adjusted SG&A1 was $35.8 million in Q3 2026, compared to $31.3 million in the prior year period. The increase
compared to the prior year period relates to increased headcount and higher contract labor in Europe and MedReleaf Australia, as well
as increased professional fees.
Net loss from continuing operations for the three months ended December 31, 2025 was $1.7 million compared to a net income of
$28.1 million for the prior year period. The decrease in net income from continuing operations of $29.9 million compared to the three
months ended December 31, 2024, is comprised of a decrease in gross profit of $28.3 million, an increase in operating expenses of $2.1
million, and a decrease in other expenses of $1.1 million.
Adjusted Net Income:
Adjusted net income1 was $7.2 million for the three months ended December 31, 2025 compared to $7.4 million for the
three months ended December 31, 2024. Adjusted net income remained relatively consistent compared to the three months ended December 31,
Adjusted EBITDA1 was $18.5 million for the three months ended December 31, 2025 compared to $19.4 million for the prior
Strategic Business Update
Following careful evaluation and building on the sustained
strong performance of its high margin global medical cannabis business, the Company has made the following strategic decisions, to re-prioritize
its resources and focus on further strengthening its global leadership position in this rapidly expanding global medical cannabis market.
Beginning in Q4 FY26, the Company will be exiting
certain markets in the lower margin consumer segment in Canada and will further prioritize the allocation of product and resources to
the higher margin global medical cannabis business. Due to the higher sales and marketing costs associated with the consumer segment,
this decision is expected to result in lower adjusted SG&A and improved consolidated adjusted gross margins in the coming quarters,
with some one-time costs impacting cash flow in Q4 FY26. Following the completion of this strategic initiative, the Company expects to
see adjusted EBITDA improvements in the coming quarters.
On February 3, 2026, Aurora and its wholly owned subsidiary
entered into a definitive agreement with Bevo Agtech Inc. ("Bevo Agtech") and Bevo Farms Ltd. ("Bevo Farms")
pursuant to which, among other things, Aurora agreed to exchange all of its common shares of Bevo Agtech for preferred shares (the "Bevo
Preferred Shares") of Bevo Agtech (the "Bevo Transaction"). The closing of the Bevo Transaction remains subject
to certain conditions, including Bevo Agtech shareholder approval and the consent of Bevo Farms' lender.
As holder of the Bevo Preferred Shares, Aurora will,
among other things, be entitled to an annual 5% dividend on the value of the Bevo Preferred Shares and distributions of 30% of eligible
Bevo Agtech cashflow (which will increase to 40% following the 15-year anniversary of closing of the Bevo Transaction), which cashflow
will first be paid to satisfy any unpaid dividend entitlements on the Bevo Preferred Shares and then be used to redeem the outstanding
Bevo Preferred Shares, and 30% of proceeds on a Bevo Agtech liquidation event, including any sale of Bevo Agtech. The remaining eligible
Bevo Agtech cash flow and the proceeds on a liquidation event will be distributed to the holders of the common shares of Bevo Agtech.
Aurora will also have certain customary preferred shareholder protections such as veto rights on the creation or issuance of shares ranking
equal to or senior to the Bevo Preferred Shares. Upon the closing of the Bevo Transaction, the Aurora-nominated directors will resign
from the board of Bevo Agtech and its subsidiaries, and Aurora will no longer have any right to appoint directors. Aurora will retain
its entitlement to the earnouts of up to $25 million and $15 million related to the Aurora Sky facility in Edmonton, Alberta and Aurora
Sun facility in Medicine Hat, Alberta, respectively, both of which are payable upon Bevo Farms successfully achieving certain financial
milestones. As a result of the Bevo Transaction, the assets and liabilities of Bevo Agtech will be classified as held-for-sale and remeasured
at the lower of their carrying amount and fair value. Any impairment losses which may be recognized upon initial classification as held-for-sale
and subsequent gains and losses on re-measurement will be recognized in the consolidated statements of income (loss) and comprehensive
income (loss), and the financial results of Bevo, including comparative periods, will be restated and presented as a discontinued operation,
separate from continuing operations. The financial results of Bevo Agtech will no longer be consolidated in Aurora's financial statements
subsequent to the closing of the Bevo Transaction.
In addition, on closing of the Bevo Transaction,
Aurora will transfer the shareholder loans owing to Aurora by Bevo Farms in exchange for $5.5 million in cash.
The Company believes that these decisions will allow
them to maximize the market opportunities in this rapidly expanding, high margin global medical cannabis business.
At-The-Market Equity Program:
Concurrent with the filing of the fiscal 2026 Q3 results,
the Company has filed a prospectus supplement establishing a new at-the-market equity program (the "ATM Program") that allows
the Company to issue and sell up to U.S. $100 million of common shares in the capital of the Company from treasury to the public, from
time to time, at the Company's discretion, through "at-the-market distributions" as defined in National Instrument 44-102, through
the NASDAQ Capital Market (the "NASDAQ") or other marketplace in the United States at the prevailing market price at the time
of sale. The Company intends to use proceeds raised under the ATM Program, if any, for strategic and accretive purposes only, including