Aurora Cannabis Announces Fiscal 2023 Third Quarter and Files Full Year Results

Published: June 15, 2023

Aurora Cannabis Announces Fiscal 2023 Third Quarter and Files Full Year Results

Aurora Cannabis Inc., the Canadian company opening the world to cannabis, today announced its financial and operational results for the third quarter and fiscal year 2023 results. As a reminder, Fiscal 2023 is comprised of three quarters ending March 31, 2023.

“We are proud to have delivered our second sequential quarter of positive Adjusted EBITDA1 in Q3 2023, demonstrating our commitment to financial discipline. Over the last three years, our ongoing business transformation initiatives have delivered ~$400 million in annualized cost savings that have significantly reduced cash used in operating activities.  In fact, cash use continues to improve as evidenced by the reduction from $35.5 million in Q2 2023 to $15.1 million in Q3 2023, excluding working capital. This impressive improvement is the launching point for the initiatives that will support our drive to our new financial target of positive free cash flow by end of calendar year 2024,” said Miguel Martin, Chief Executive Officer of Aurora.

“This quarter, revenues in both our global medical cannabis and Canadian consumer cannabis segments held mostly steady at $38 million and $14.5 million, respectively, and we benefitted from a strong $10.7 million contribution from our Bevo acquisition due to the onset of its traditionally strong seasonal period. Our adjusted gross profit rose to $30.6 million while our adjusted gross margins remained healthy with our medical business generating a stable, adjusted gross margin of 60%. Our consumer business produced an adjusted gross margin of 25%, up 500 bps from the prior quarter,” he stated.

“Aurora is best differentiated from its peers by our high margin, core global medical business spanning 12 countries, and our ability to find new profitable markets for growth. We stand poised to be opportunistic with our strong balance sheet and net cash position in the current market environment. Our determination and ability to showcase our strategic progress positions us for significant value creation,” he concluded.

Third Quarter 2023 Highlights

(Unless otherwise stated, comparisons are made between fiscal Q3 2023, Q2 2023, and Q3 2022 results and are in Canadian dollars)


Total net revenue1 was $64 million, as compared to the prior quarter net revenue1 of $61.7 million and $50.4 million in the prior year period. The increase from the prior quarter was due to the contribution of $10.8 million from Bevo, acquired in August 2022.

Excluding the impact of the non-core bulk wholesales, adjusted gross margin before fair value adjustments on cannabis net revenue1 for Q3 2023 remained strong and steady, and well above the industry average, increasing to 51% from 49% in Q2 2023.

Medical Cannabis:

Medical cannabis net revenue1 was $38 million, a 3% decrease from the prior quarter, delivering 59% of Aurora’s Q3 2023 consolidated net revenue[1] and 75% of Adjusted gross profit before fair value adjustments1.

The slight decrease in net revenue1 from Q2 2023 is largely due to a temporary situation of limited supply of high-demand cultivars in certain EU markets as the Company had production issues at its Nordic production facility. Following the year end, in May 2023, the Company made the decision to close the Nordic production facility and to return to providing European supply from Canada, a change expected to improve reliability of supply of existing and new, high potency cultivars, and increase gross margins over time. The revenue decrease was partially offset with higher volumes sold into Australia, a key export market for the Company.

Adjusted gross margin before fair value adjustments1 on medical cannabis net revenue remained steady at 60% for the three months ended March 31, 2023 as compared to 61% in the prior quarter, and within the Company’s target range of 60% and above. The continuing positive impact of Aurora’s new yield, high potency cultivars is expected to maintain margins in the target range for our medical business.

Consumer Cannabis:

Despite the significant structural challenges of the Canadian adult use market, Aurora’s consumer cannabis net revenue1 was steady at $14.5 million, compared to $14.6 million in the prior quarter.

Adjusted gross margin before fair value adjustments1 on consumer cannabis net revenue was 25%, increasing by 5% compared to the prior quarter. The increase from the prior quarter is primarily driven by a mix shift in the quarter to core segment brands 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 $10.8 million of net revenue1 and represents an increase of $4.1 million from the prior quarter. The increase is due to the seasonality of the Bevo business which delivers higher revenues in the late winter and spring months as orders are fulfilled.

Adjusted gross margin before fair value adjustments1 on plant propagation revenue was 36% for the Q3 2023 period as compared to 15% in the prior quarter. Due to seasonality of the vegetable and ornamental plant industry, it is expected that the late Winter and Spring months would deliver higher margins relative to the rest of the year as there is a high volume of production and orders being fulfilled in these months.

Selling, General and Administrative (“SG&A”):
Adjusted SG&A1, was $28.4 million in Q3 2023 which excludes $11 million of restructuring, non-recurring, and out-of-period costs, and $1 million in market development costs. Excluding the non-routine items, Adjusted SG&A1continue to be well controlled and below the Company’s target of $30 million.

Adjusted R&D1, was $1.9 million in Q3 2023, increasing by $0.7 million compared to the prior quarter. The increase from the prior quarter relates primarily to additional costs from the use of cannabis materials and supplies as the Company continues to focus on product innovation.

Net Loss:
Net loss for the three months ended March 31, 2023 was $87 million compared to $67.2 million in the prior quarter. The increase in net loss of $20 million from the prior quarter was primarily due to an increase of $60 million in other expenses driven by changes in fair value on derivative investments. Offsetting these mark-to-market changes, the Company improved gross profit by $34.8 million and decreased operating expenses by $4.1 million.

Adjusted EBITDA:
Adjusted EBITDA1 was $0.3 million for the three months ended March 31, 2023, as compared to $1.4 million in the prior quarter. The change in Adjusted EBITDA is largely due to additional professional fees and consultant costs as the Company balanced lower corporate headcounts with ongoing compliance and regulatory needs.

Fiscal Q1 2024 Expectations:
The Company expects cannabis net revenue1 for fiscal Q1 2024 to be largely similar to fiscal Q3 2023, with the geographical mix slightly weighted towards the international medical segment. For plant propagation, we expect to see a seasonally strong quarter as we reach our peak selling period. Furthermore, the Company expects Adjusted Gross Margins to be consistent with fiscal Q3 2023 and expects to maintain our stated objective of a quarterly SG&A expense run rate below $30 million.

Operational Efficiency Plan, Balance Sheet Strength, & Cash Use:

Aurora completed its previously announced strategic transformation plan. The achievement of significant and sustainable operating cost and SG&A reductions resulted in two consecutive quarters with positive Adjusted EBITDA and is paving the path as the Company works towards positive free cashflow by the end of calendar 2024.

In Q3 2023, our operations used a net $15.1 million, excluding changes in working capital. The $15.1 million includes approximately $2.1 million in non-recurring termination costs.  During fiscal 2024, the Company is working to:

  • Reduce operations cash use by a minimum of $5 million per quarter, by eliminating less efficient operations and focusing on supplying the globe from Aurora’s highly efficient, high quality production facilities.
  • Removing a minimum of $5 million a quarter from several targeted efficiency and cost reduction initiatives in operations and SG&A.

In addition, compared to Q3 2023, the Company expects to save approximately $2 million per quarter in interest as the remaining $80 million of convertible debt is settled before the end of this fiscal year.

Capital expenditures were approximately $3.6 million dollars in Q3 2023, and in fiscal 2024, are targeted to an average of $2 million quarterly, expected to save over $1 million a quarter compared to Q3 2023.

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.  Revenue growth, as it arrives, would be incremental to the path to positive cash flow.

Aurora has one of the most robust balance sheets in the Canadian Cannabis industry with approximately $230 million of cash and cash equivalents on hand and approximately $80 million outstanding in convertible debentures. The Company believes its cash on hand is sufficient to fund operations until the Company is cash flow positive, and is positioned with financial strength and realistic growth prospects to thrive over the long term as the global cannabis market expands.

Additionally, the Company has access to US$650.0 million under a Base Shelf Prospectus filed on April 27, 2023 (the “2023 Shelf Prospectus”), pursuant to which approximately US$409 million is allocated to the potential exercise of currently outstanding warrants issued in financing transactions from 2020 to 2022. As a result, approximately US$241 million is available for potential new issuances of common shares, warrants, options, subscription receipts, debt securities or any combination thereof during the 25-month period that the 2023 Shelf Prospectus remains effective. Volatility in the cannabis industry, stock market and the Company’s share price may impact the amount and our ability to raise financing under the 2023 Shelf Prospectus.

During the three months ended March 31, 2023, the Company issued 4,650,088 common shares under the 2021 at-the- market (ATM) program (the “ATM Program”) for net proceeds of US$3.6 million. Subsequent to March 31, 2023, the Company issued 2,145,350 common shares under the ATM Program for gross proceeds of US$1.4 million. Following the filing of the 2023 Shelf Prospectus the ATM Program ceased to operate. The Company may in the future file a supplement to the 2023 Shelf Prospectus in order to utilize a new ATM program to support strategic initiatives or debt settlement.

Subsequent to March 31, 2023, the Company repurchased approximately U.S$50.9 million aggregate principal amount of convertible senior notes for aggregate cash consideration of approximately U.S$46.0 million, and issued 6,354,529.00 Common Shares in settlement of a further U.S$4.0 million principal of this debt.