Tilray Brands — Q1 Fiscal 2027 Earnings Summary

Financial Performance

• Net revenue increased 23% year-over-year to $257.1 million (vs. $209.5 million).
• Gross profit increased 35% year-over-year to $77.5 million (vs. $57.5 million), with gross margin expanding to 30% from 27%.
• Net loss was $40.0 million ($0.32 per share), compared to a net income of $1.5 million in the prior year period.
• Adjusted net loss was $3.0 million ($0.02 per share), compared to an adjusted net income of $3.4 million in the prior year period.
• Adjusted EBITDA was $9.2 million, down from $10.2 million in the prior year period, impacted by approximately $1.7 million in global fuel surcharges.
• Total outstanding debt was reduced by $42 million year-to-date.
• Cash, restricted cash, and marketable securities totaled $221.4 million at the end of the quarter.
• Free cash flow was $(27.4) million, compared to $(10.6) million in the prior year period.
• Adjusted free cash flow was $(23.4) million, compared to $(4.8) million in the prior year period.

Guidance and Future Outlook

• Reaffirmed Fiscal 2027 Adjusted EBITDA guidance of $68 million to $75 million, representing double-digit growth compared to Fiscal 2026.
• Noted that financial results are typically more weighted toward the second half of the fiscal year due to seasonality, with significant strengthening expected in the fourth quarter.

Business Segments and Product Lines

• Beverage net revenue increased 82% year-over-year to $101.5 million (vs. $55.7 million), driven by the acquisition of BrewDog.
• Beverage gross margin expanded to 41% (vs. 38%), with BrewDog achieving profitability in Q1.
• Cannabis net revenue decreased to $56.1 million (vs. $64.5 million), though gross margin expanded to 39% (vs. 36%).
• Distribution net revenue increased 14% to $84.3 million (vs. $74.0 million), with gross margin holding steady at 11%.
• Wellness net revenue remained consistent at $15.3 million (vs. $15.2 million), with gross margin declining to 29% (vs. 32%).
• Tilray holds over 6 million square feet of cultivation capacity across Canada, Portugal, and Germany.
• Tilray is the #4 craft brewer in the U.S. and #1 in the U.K.
• A partnership with Carlsberg to produce and sell its iconic brands in the U.S. market is scheduled to begin January 1, 2027.

Market and Competitive Landscape

• International EMEA revenue increased 71%, driven by growth in medical cannabis, beverage, and pharmaceutical distribution.
• The company operates with over 40 brands in over 20 countries.
• Tilray maintains one of the largest EU-GMP certified footprints in the world.

Risks and Challenges

• Adjusted EBITDA was burdened by approximately $1.7 million in global fuel surcharges.
• Operating expenses increased 83% year-over-year to $101.6 million, driven by increases in general and administrative costs, marketing, restructuring, and transaction costs.
• The company noted that certain items impacting net income and other reconciling metrics are out of its control and/or cannot be reasonably predicted, preventing reconciliation of forward-looking adjusted EBITDA to net income without unreasonable effort.

Management Commentary and Tone

• Chairman and CEO Irwin D. Simon stated the company is no longer dependent on a single market or regulatory catalyst, citing multiple engines of growth and a scaled international footprint.
• Management emphasized the conversion of global scale into stronger margins, greater efficiency, and sustainable, profitable growth.
• The tone highlighted progress in integrating businesses, sharpening operations, and building a focused, profitable company.

Other Key Points

• The company ended the quarter with a net cash position.
• A reverse stock split became effective on December 2, 2025, with prior year share amounts retrospectively adjusted.
• The company hosts a live audio webcast to discuss results.
• Tilray Brands is listed on Nasdaq (TLRY) and TSX (TLRY).