Canadian medical cannabis giant Aurora Cannabis Inc. ACB ACB reported its financial and operational results on Thursday for the third quarter of fiscal year 2024.
CEO Miguel Martin said that medical cannabis net revenue has increased significantly year-over-year, adding the third quarter represents the company's fifth consecutive quarter of positive adjusted EBITDA.
The increase was primarily due to higher sales to Australia and Europe in the current period following the launch of innovative cultivars in these markets.
"Our international medical net revenue grew 41% year-over-year in Q3, demonstrating Aurora’s ability to meet diverse patient needs in markets across the world,” Martin said. “Fiscal 2024 is on track to be our strongest to date, driven by the continued strength of our differentiated business model and our focus on profitable global medical cannabis markets."
In a separate press release, Aurora announced that its wholly-owned subsidiary has acquired the remaining approximately 90% equity interest of Indica Industries Pty Ltd – the partner of Canadian licensed producer MedReleaf LEAF MEDFF that is operating as MedReleaf Australia – which Aurora did not previously own, for AUD$50 million ($32.6 million). The company paid AUD$9.45 million in cash with the balance of the purchase price satisfied by the issuance of the company's common shares.
MedReleaf Australia is a distributor of medical cannabis products and it's well positioned within the Australian medical cannabis market.
The acquisition is expected to result in Aurora achieving positive free cash flow in calendar 2024, as MedReleaf Australia generated 12-month net revenue of roughly AUD$40 million and was adjusted EBITDA and operating cash flow positive.
Q3 2024 Financial Highlights
The company highlighted the year-over-year comparison quarter for the third quarter ending Dec. 31, 2023, as the second quarter of 2023 ending December 31, 2022, since the fiscal year 2023 consisted of three quarters.
- Net revenue totaled CA$64.4 million ($42 million), compared to CA$61.1 million in the second quarter of last year.
- Medical cannabis net revenue was CA$45.1 million, a 16% increase from the prior year quarter, delivering 70% of Aurora’s quarterly consolidated net revenue and 86% of adjusted gross profit before fair value adjustments.
- Gross profit amounted to CA$19.8 million, up from CA$3.7 million in the second quarter of 2023.
- Adjusted gross profit before fair value adjustments was CA$32.4 million versus CA$28 million in the prior year's quarter, representing an increase of 15.7%.
- Consolidated adjusted gross margin before fair value adjustments was 50% compared to 46% in the prior year's quarter.
- Net loss totaled CA$25.5 million, down from CA$67.2 million in the second quarter of last year.
- Adjusted selling, general and administrative expenses were CA$27.5 million, which excludes CA$6.8 million of restructuring and non-recurring, costs.
- Adjusted EBITDA came in positive at CA$4.3 million, as compared to CA$3 million in the prior year's quarter.
Q4 Outlook
The Company expects revenue from Canadian medical and consumer segments to be steady quarter over quarter, while Europe and Australia should provide modest growth in their regions.
Revenue increases combined with ongoing cost control are expected to result in continued positive adjusted EBITDA.
ACB Price Action
Aurora's shares traded 4.72% higher at $0.4151 per share during the pre-market session on Thursday morning.
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