Aurora Cannabis Inc. Q3 FY2026 earnings call

• Focus on global medical cannabis as the most promising segment, with success in Germany, Australia, Poland, and the UK.
• Begin exiting select lower Canadian consumer cannabis markets to prioritize higher-margin global medical cannabis, expecting SG&A benefits and improved margins.
• Divest controlling stake in plant propagation business (Bevo) to allocate capital more effectively.
• Announce an at-the-market equity program to raise up to $100 million for strategic purposes like cultivation capacity and M&A.
• Highlight strong performance in Germany with growing market, Australia shifting to premium products, Poland maintaining market share, and UK focusing on distribution and clinic relationships.

Net revenue for fiscal Q3 2026 was $94.2 million, a 7% increase. Global medical cannabis revenue grew 12%, with international up 17%. Medical cannabis comprised 81% of net revenue, contributing $76.2 million. Consumer cannabis net revenue was $5.2 million, down 48% from the prior year. Plant propagation net revenue was $11.3 million, up 27%. Adjusted gross margin was 62%, with medical cannabis having a strong 69% adjusted gross margin. Consumer cannabis had an adjusted gross margin of 28%, while plant propagation's adjusted gross margin fell to 16% due to increased costs and inventory write-offs.

• Annual global medical cannabis net revenue expected to be between $269 million and $281 million, driven by 10%-15% growth in the global medical cannabis segment.
• Plant propagation revenue expected to perform in line with traditional seasonal trends (65%-75% in first half).
• Consolidated adjusted gross margins expected to remain strong due to favorable sales mix and operational efficiencies.
• Annual consolidated adjusted EBITDA expected $52 million to $57 million, representing 5%-10% annual growth, driven by net revenue increases and medical cannabis margin.

Q: Kenric Tighe asked about the select market exit in Canada and Australia premiumization strategy.

A: Miguel Martin stated the reallocation of resources to higher-margin markets will benefit financials, and the Australian shift to premium products is consistent and accretive to margins.

Q: Derek Lessard inquired about the plant propagation divestiture timing and guidance impact.

A: Miguel Martin explained focus on global medical cannabis led to divestiture, and Simona King noted plant propagation results will be treated as discontinued operations in Q4.

Q: Bill Kirk questioned global medical cannabis guidance comparability and wholesale vs. consumer gross margins.

A: Simona King clarified guidance includes Bevo's impact, and Miguel Martin explained consumer business margins are lower due to market dynamics while wholesale has higher margins.

Q: Brenner Cunnington asked about ATM use, consumer exit SG&A savings, and international markets.

A: Miguel Martin said ATM funds will be used for accretive aspects like M&A and cultivation, consumer exit will bring SG&A savings, and Aurora is exploring other international markets.

Q: Pablo Zuanic asked about US rescheduling and supply chain.

A: Miguel Martin noted US rescheduling is a step in the right direction for medical cannabis, and Aurora produces most of its international products in GMP-certified facilities with a strong genetic and cultivation advantage.