Aurora Cannabis Releases Strong Q1 2024 Financial Results Highlighting Substantial Adjusted EBITDA Growth

Aurora Cannabis Inc. ACB ACB reported its financial results for Q1 fiscal year 2024, ending on June 30, 2023.

According to a press release, this quarter's year-over-year comparison corresponds to Q4 2022 ending June 30, 2022. All comparisons are in Canadian dollars (CAD) and relate to fiscal Q1 2024, Q3 2023 and Q4 2022 outcomes.

Financial Highlights

• Total net revenue reached $75.1M, compared to $50.1 million in the prior year period. This growth was driven by increased net revenues across all business units, including 14% growth in global medical cannabis, 5% in consumer cannabis, and 12% in plant propagation. Notably, medical cannabis net revenue hit $41.6 million, mainly due to a 40% YoY increase in international markets, particularly Europe and Australia.
• Q1 2024 displayed a strong 53% adjusted gross margin before fair value adjustments for cannabis net revenue, surpassing industry standards. However, the consolidated adjusted gross margin before fair value adjustments decreased to 44% (compared to Q4 2022's 50%).
• Q1 2024 witnessed a 26% surge in adjusted gross profit before fair value adjustments, reaching $32.6 million (compared to Q4 2022's $25.8 million).
• Q2 2023 saw a substantial decrease in net loss, dropping to  $28.3 million from $618.8 million in the same period of the previous year. This reduction of $590.4 million was primarily attributed to lower expenses, including a $457.5 million decline in intangible asset and goodwill impairment, a $78.7 million decrease in property, plant, and equipment impairment, a $17.9 million increase in gross profit, and a $26.1 million reduction in operating expenses.
• Adjusted EBITDA for Q2 2023 significantly improved to $ 2.2 million, a notable turnaround from a loss of $8.8 million in the previous year's quarter. This improvement was mainly driven by reduced SG&A expenses and increased revenue across all business units, including the impact of the Bevo acquisition.
• Cash used for operating activities observed a YoY reduction of $15.5 million, reinforcing the company's goal of achieving positive free cash flow by the end of the calendar year 2024.

Miguel Martin, CEO of Aurora Cannabis, noted the strong fiscal performance and a well-positioned business for the upcoming year. "We are pleased to have generated strong net revenue and record adjusted EBITDA during Q1 which positions us well for what we believe will be a successful fiscal year 2024.”

Furthermore, adjusted SG&A was$29.5 million in Q1 2024, excluding $5.2 million of restructuring, non-recurring, and out-of-period costs. Adjusted R&D totaled CA $1.1 million in Q1 2024, a decrease of $0.9 million compared to the prior-year quarter.

Fiscal 2024 Expectations

For Q2 fiscal 2024, the company foresees stable cannabis net revenue with a slight shift towards the international medical segment. The plant propagation unit is expected to show seasonally reduced revenues. Aurora plans to continue repurchasing convertible senior notes to bolster its financial position.

"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," Martin concluded.

Price Action: Shares of Aurora were up 0.34% at $0.53 per share after the bell on Thursday evening.

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Photo: Courtesy Of Esteban Lopez On Unsplash