Tilray Stock Pops On Earnings

Tilray, Inc.  (Nasdaq: TLRY) stock is popping over 11% in early trading as the company turned in a solid earnings report for the second fiscal quarter ending November 30, 2021. As shares were lately trading at $7.25, Tilray reported revenue increasing approximately 20% to $155 million versus last year’s $129 million for the same time period. However, analysts had estimated Tilray would report revenue of roughly $170 million causing the company to miss expectations for the second quarter in a row.

Tilray outlined the increases with a 7% growth in cannabis revenue to $58.8 million, net beverage alcohol revenue of $13.7 million from SweetWater, and wellness segment revenue of $13.8 million from Manitoba Harvest. The net income increased to $6 million from a net loss of $89 million in the previous year’s quarter. The earnings per share came in flat, which did beat analysts’ estimates that ranged from a loss of ($0.08) to a loss of ($0.13.)

The company also noted that the adjusted EBITDA was $13.8 million in the second quarter 2022. This was an 8% growth compared to the preceding prior quarter, and the eleventh consecutive quarter of positive Adjusted EBITDA. Tilray also announced a new parent name, Tilray Brands, Inc., which the company said reflected its evolution from a Canadian LP to a global consumer packaged goods company powerhouse with a market-leading portfolio of cannabis and lifestyle CPG brands.

“Our second-quarter performance reflects notable success building high-quality and highly sought-after cannabis and lifestyle CPG brands which, coupled with our scale, operational excellence, and broad global distribution, enabled us to increase sales and maintain profitability despite sector-specific and macro-economic headwinds, said Chairman and CEO Irwin D. Simon.
U.S. Operations
Tilray also noted that its U.S. operations, SweetWater, which is the 11th largest craft brewer in the nation, and CBD company Manitoba Harvest generate roughly $100 million in revenue and are EBITDA and cash flow positive. The company said it will expand in the near term into CBD adjacencies and THC-based products upon legalization. Tilray said it continues to build its U.S. platform, including through its prior acquisition of a majority of the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) – which marked a critical step towards delivering on its objective of leading the U.S. cannabis market upon federal legalization.

Mr. Simon continued, “Looking at performance highlights across key markets, we maintained our #1 cannabis market share position in Canada – despite market saturation and related competitive challenges — on the strength of our brands and adept pricing and marketing adjustments. Importantly, we believe these adjustments will enable us to aggressively recapture share when the market right-sizes. In Germany – Europe’s largest and most profitable medical cannabis market – our nearly 20% share leads the market. We believe this, coupled with our infrastructure, will also allow us to capture the adult-use market as legalization accelerates under the new coalition government. Turning to the U.S., SweetWater Brewing and Manitoba Harvest continued to invest in product innovation and acquisitions to enhance awareness and distribution. These profitable businesses further provide an opportunity to launch THC-based products upon federal legalization in the U.S. Subsequent to the end of the fiscal quarter, we also expanded our spirits portfolio through the acquisition of Breckenridge Distillery, deepening our presence in the fast-growing spirits sector while also providing an immediate contribution to earnings.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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