Tilray Brands Stock Jumps on $30M Revenue Beat

The company expects to generate positive adjusted free cash flow in fiscal year 2024.

Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) stock was up more than 20% after the cannabis CPG giant surprised investors with boosts in revenue and adjusted EBIDTA, while lowering its net loss for the fourth quarter ending May 31, the company announced Wednesday.

The company posted net revenue of $184 million for the fourth quarter, notching 20% year-over-year growth. This represents a $30-million beat versus Yahoo analysts’ average estimate of $153.6 million.

For the fiscal year 2023, the company generated net revenue of $627 million. Factoring in constant currency, net revenue rose by 6% to reach $668 million.

While Tilray suffered a net loss of $120 million in the fourth quarter, that marks significant improvement from the previous year’s fourth-quarter loss of $458 million and the third quarter’s $1.1 billion in losses.

Full fiscal year net loss totaled $1.4 billion, with the third-quarter results making the largest contribution to the loss. The company recorded a net loss of $434 million in the prior fiscal year.

“We delivered on our commitment to generate positive adjusted free cash flow across all business segments, and executed against our strategic plan to grow revenue, drive operating efficiencies, and improve margins and profitability, all while investing in our industry-leading brands,” Irwin Simon, Tilray’s chairman and CEO, said in a statement.

Tilray said it strengthened its foothold in the Canadian cannabis market and secured a market share of 13% following the acquisition of HEXO. The move also bolstered the company’s position in the medical cannabis market across Europe, it said.

“We are working towards a seamless integration into our efficient, built-to-last platforms as we leverage our deep CPG expertise and track record to drive both revenue and cost synergies while expanding product distribution in Canada and across international markets,” Simon said of the acquisition.

The company’s beverage alcohol sector reported a 33% surge in net revenue, reaching $95 million, reflecting the company’s diversification efforts.

Net cash flow from operating activities was reported at $8 million, illustrating a $200 million improvement in adjusted free cash flow from the previous fiscal year.

For the fourth quarter, adjusted EBITDA increased by 93% to $22 million, up from $12 million in the same quarter the previous year. Over the course of the full fiscal year 2023, adjusted EBITDA rose 28% to reach $61 million, compared to $48 million in the prior fiscal year.

The improvements signifies the fourth consecutive year of positive adjusted EBITDA for Tilray, reflecting resilience in the struggling sector.

The company anticipates adjusted EBITDA of $68 million-$78 million for fiscal year 2024, representing 11%-27% growth compared to full-year 2023. The company also expects to generate positive adjusted free cash flow.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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