Aurora Cannabis Inc., he Canadian company opening the world to cannabis, today announced its financial and operational results for the first quarter of fiscal year 2024. As the fiscal year 2023 consisted of three quarters, the year-over-year comparison quarter for Q1 2024 ending June 30, 2023 is Q4 2022 ending June 30, 2022.
“We are pleased to have generated strong net revenue1 and record adjusted EBITDA1 during Q1 which positions us well for what we believe will be a successful fiscal year 2024,” stated Mr. Martin, CEO of Aurora Cannabis. “We have built a differentiated and growing business that is diversified across key global cannabis and non-cannabis platforms, and I am truly delighted with the strong performance across all our business units. Following the previously announced $40 million in annualized cost efficiencies in fiscal 2024, I believe we are in a strong position to grow and deliver profitable results to support our target of positive free cash flow,” continued Mr. Martin.
First Quarter 2024 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q1 2024, Q3 2023, and Q4 2022 results and are in Canadian dollars)
Consolidated Revenue and Adjusted Gross Profit:
Total net revenue1 was $75.1 million, as compared to $50.1 million in the prior year period. The increase from the prior period is mainly due to growth in our global medical cannabis business and a record high quarterly revenue in our plant propagation business.
Excluding the impact of the non-core bulk wholesales, adjusted gross margin before fair value adjustments1 on cannabis net revenue1 for Q1 2024 remained strong and steady, and well above the industry average at 53%.
Consolidated adjusted gross margin before fair value adjustments1 was 44% in Q1 2024 (Q4 2022: 50%). Adjusted gross profit before FV adjustments1 was $32.6 million in Q1 2024 (Q4 2022: $25.8 million), an increase of 26%.
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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. |
Medical Cannabis:
Medical cannabis net revenue1 was $41.6 million, a 14% increase from the prior year quarter, delivering 55% of Aurora’s Q1 2024 consolidated net revenue[1] and 77% of Adjusted gross profit before fair value adjustments1. The increase in net revenue1 of $5.1M was primarily due to 40% growth in our international business, including our European business, which benefitted from the introduction of new proprietary high potency cultivars, and higher volumes sold to Australia, a key export market for the Company.
Adjusted gross margin before fair value adjustments1 on medical cannabis net revenue remained strong at 61% for the three months ended June 30, 2023 as compared to 67% in the prior year period and within the Company’s target range of 60% and above. The continuing positive impact of Aurora’s new higher-yielding, higher-potency cultivars, in addition to the decision to close our Nordic facility and supply the European markets from our EU GMP facilities in Canada, are expected to further improve margins for our medical business through the remainder of this fiscal year.
Consumer Cannabis:
Aurora’s consumer cannabis net revenue1 was $13.2 million, compared to $12.6 million in the prior year quarter, as the Company continued to introduce new and innovative cultivars and extracts. Adjusted gross margin before fair value adjustments[1] on consumer cannabis net revenue[1] was 27%, increasing by 1% compared to the prior year quarter. The increase from the prior year quarter is primarily driven by a mix shift in the quarter to core segment brands and recently-launched extract product innovation, and lower per unit cost of goods sold from the consolidation of manufacturing assets.
Plant Propagation:
Plant propagation net revenue1 was wholly comprised from the Bevo business, contributing $19.9 million of net revenue1 and represents the highest quarterly revenue for Bevo to date. The Company acquired Bevo in August 2022, and as such, there are no Bevo revenues in the comparative period. The seasonality of the current Bevo business delivers 65-75% of its annual revenues in the first half of a calendar year as orders are fulfilled. Adjusted gross margin before fair value adjustments1 on plant propagation revenue was 22% for the Q1 2024 period.
Selling, General and Administrative (“SG&A”):
Adjusted SG&A1, was $29.5 million in Q1 2024, which excludes $5.2 million of restructuring, non-recurring, and out-of-period costs. Excluding the non-routine items, Adjusted SG&A1continue to be well controlled and in line with the Company’s current target of $30 million. Adjusted R&D1, was $1.1 million in Q1 2024, decreasing by $0.9 million compared to the prior year quarter. The decrease from the prior year quarter relates primarily to a more targeted and gated approach to product innovation.
Net Loss:
Net loss for the three months ended June 30, 2023 was $28.3 million compared to $618.8 million in the prior year quarter. The decrease in net loss of $590.4 million from the same period in the prior year was primarily due to a decrease in other expenses of $552.3 million, primarily consisting of (i) a decrease of $457.5 million in impairment of intangible assets and goodwill, (ii) a decrease of $78.7 million in impairment of property, plant and equipment, (iii) an increase in gross profit of $17.9 million, and (iv) lower operating expenses of $26.1 million.
Adjusted EBITDA:
Adjusted EBITDA1 was $2.2 million for the three months ended June 30, 2023, as compared to a loss of $8.8 million in the prior year quarter. The significant improvement in Adjusted EBITDA is largely attributable to reductions in SG&A, and to growing revenue across all business units including the contribution from the acquisition of Bevo.
Fiscal 2024 Expectations:
In Q2 fiscal 2024
- The Company expects cannabis net revenue1 to be largely similar to fiscal Q1 2024, with the geographical mix slightly weighted further towards the international medical segment.
- For plant propagation, we expect to see seasonally reduced revenues and gross profit in Q2 2024 that will be in line with historical performance as 25% – 35% of revenues are normally earned in the second half of a calendar year.
Through the remainder of fiscal 2024
- Aurora is now realizing the benefit of its long-term commitment to science and quality cultivation in that demand for the Company’s products globally is beginning to outpace supply. Aurora is focused on growing profitable revenue across all business units, but in particular to fully supply the growing demand now evident in Aurora’s international medical business as the Company’s leading new cultivars have been introduced to our international channels.
- In plant propagation, in addition to the normal seasonal cadence of the base business, the Company expects first sales of orchids from the 800,000 sq ft Sky facility to occur in Q3 of this fiscal year and for the 1.6 million sq ft Aurora Sun facility to be contributing to the top line at the start of the next fiscal year.
Aurora’s achievement of significant and sustainable operating cost and SG&A reductions has now resulted in three consecutive quarters with positive Adjusted EBITDA. This has paved the path towards positive free cashflow in calendar year 2024.
About Aurora
Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis, dedicated to helping people improve their lives. The Company’s adult-use brand portfolio includes Aurora Drift, San Rafael ’71, Daily Special, Whistler, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co, as well as international brands, Pedanios, Bidiol and CraftPlant. Aurora also has a controlling interest in Bevo Farms Ltd., North America’s leading supplier of propagated agricultural plants. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora’s brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched. Learn more at www.auroramj.com and follow us on Twitter and LinkedIn. Aurora’s common shares trade on the NASDAQ and TSX under the symbol “ACB”.
