TLRY

Last week, Tilray Brands (NASDAQ:TLRY) reported its first-quarter numbers for fiscal 2027. While management boasted of its record-breaking numbers and diversified business, investors shouldn't buy the hype at all. Tilray has been a bad investment for many years, and acquisitions may have boosted its revenue, but they haven't changed the story around this troubling marijuana stock. It's a bad buy, and the three numbers below from its earnings report only confirm that. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Image source: Getty Images. I've written about cannabis stocks for years and know how unreliable looking at their income statements can be; they're often filled with impairment charges and valuation changes. There's a lot of noise that can make it difficult for investors to truly understand what shape the business is in. This is why I often go straight to the cash flow statement instead. And on a cash basis, things don't look good for Tilray. Its cash burn for the period ending Aug. 31 totaled $16.5 million, which is up significantly from $1.3 million a year ago. Cash can fluctuate significantly from one period to the next. But the reality is that Tilray has often struggled to generate consistent positive cash flow from its operations. This is even before factoring in any money it uses up from investing activities, including capital expenditures. Tilray is a cash-burning machine, and until that changes, investors should brace for and expect stock offerings, dilution, and plenty of volatility. Tilray's cannabis revenue for the period totaled $56.1 million, which was down from $64.5 million a year ago, representing a year-over-year decline of 13%. The company's top line did rise by 23%, but that was largely due to a significant spike in its beverage business, where its BrewDog acquisition padded its numbers. Wheeling and dealing can help manufacture this type of growth, but it's organic growth that growth investors are truly craving. Simply adding more companies to the mix can certainly make the business bigger, but not necessarily better. Investors should tread carefully with acquisition-hungry businesses such as Tilray for this very reason, because without a way to gauge how well it's growing organically, it's difficult to see just how strong a growth stock it really is. The fact that its core cannabis business is struggling highlights precisely why Tilray would seek investments and acquisitions elsewhere: without them, its top line wouldn't look nearly as strong. Acquisitions can bolster the top line, but they can also drastically weigh down the bottom line. That's because a company acquires the extra staff, overhead, and other costs associated with the business. So while it may get a bump up on the top line from more revenue, it will also incur significantly more expenses. It may be able to trim some costs and remove redundancies over time, but the business will no doubt be bulkier. Tilray's operating expenses totaled $101.6 million this past quarter, which is an increase of 83% from the same period last year. That is, however, with the company getting a $15 million benefit from the change in the fair value of contingent consideration a year ago. If that's removed, then the year-over-year increase in operating expense is 44%. But that's still higher than the company's top-line growth. With a more bloated business, Tilray's actually going in the opposite direction of its peers, Canopy Growth and Aurora Cannabis, which have been looking to get leaner. It's not a strategy I think will end up paying off for Tilray. Despite top-line growth, the market didn't appear impressed with Tilray's latest numbers, as the stock has fallen since it posted them. Unfortunately, I don't see a path for the stock to get out of its tailspin anytime soon. It's a stock that's full of risk and that investors are likely better off avoiding. Before you buy stock in Tilray Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tilray Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Image source: The Motley Fool. Thursday, Oct. 8, 2026 - Chief Corporate Affairs Officer - Berrin Noorata - Chairman and Chief Executive Officer - Irwin Simon - Chief Financial Officer - Carl Merton Operator: Thank you for joining today's conference call to discuss Tilray Brands' Financial Results for the First Quarter 2027, ended August 31, 2026. [Operator Instructions] I'll now turn the call over to Ms. Berrin Noorata, Tilray Brands' Chief Corporate Affairs Officer. Thank you. You may now begin. Berrin Noorata: Thank you, operator, and good morning, everyone. By now, you should have access to the earnings press release, which is available on the Investors section of the Tilray Brands' website at tilray.com and has been filed with the SEC and OSC. Please note that during today's call, we will be referring to various non-GAAP financial measures that can provide useful information for investors. However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. In addition, we will be making numerous forward-looking statements during our remarks and in response to your questions. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties, which may prove to be incorrect. Actual results could differ materially from those described in those forward-looking statements. The text in our earnings press release includes many of the risks and uncertainties associated with such forward-looking statements. Today, we will be hearing from key members of our senior leadership team, beginning with Irwin Simon, Chairman and Chief Executive Officer, who will provide opening remarks and commentary, followed by Carl Merton, Chief Financial Officer, who will review our financial results for the first quarter of 2027. And now I'd like to turn the call over to the Tilray Brands' Chairman and CEO, Irwin Simon. Irwin Simon: Thank you, Berrin, and good morning, everyone. Before I discuss the quarter, I want to frame how investors should think about Tilray Brands today. We're building a larger, more diversified global business with multiple engines of growth, category leadership across cannabis, beverage, wellness and pharmaceutical distribution and a clear focus on converting that platform into stronger margins, cash generations and long-term shareholder value. Tilray is not a single category company, and we're not dependent upon one market, one regulatory catalyst or one product cycle. That matters for shareholders because diversification gives us more ways to grow, more ways to manage risk and more opportunities to create value as consumer cannabis, beverage, wellness and pharmaceutical distribution markets evolve around the world. We have grown Tilray from a $50 million company 7 years ago to a pro forma $1.2 billion global business today, reflecting our ability to identify opportunities, acquire strategically, integrate assets and build platforms with greater reach. We are not done. We will continue to grow Tilray organically and through focused M&A using our infrastructure, operating capabilities and brand-building expertise to create more value from the assets that we acquire. Today, Tilray operates from a position of global scale and category leadership that few companies in our categories can replicate. We believe we're the world's largest cannabis grower with more than 6 million square feet of cultivation capacity and a leading low-cost production base. We are a market leader in the largest federally legal cannabis markets, including Canada and across Europe. We're the #1 craft beer supplier in the U.K. and the fourth largest total beer category supplier in the U.K. grocery market, the fourth largest craft brewer in the United States and a global leader in hemp foods, beverage and wellness. Overall, we operate nearly 40 hospitality venues, including pubs, bars and hotels that showcase our beers and beverages, deepen consumer engagement and give Tilray a differentiation platform to bring our brands to life in markets around the world. In the U.S., consumers can find a Tilray product in almost every major supermarket, and our beer is now available on tap in approximately 28,000 on-premise accounts. Go try one. This scale matters because it gives Tilray the infrastructure and commercial network to buy attractive assets, integrate them effectively, improve them how they run and expand their distribution and make them stronger and more profitable businesses. With BrewDog, Tilray did more than acquire a beer company. We acquired one of the world's most recognized craft beer brands, a passionate global consumer community, a scaled hospitality footprint and a powerful platform for international beverage growth. For shareholders, BrewDog is a clear example of our acquisition strategy in action. We can buy a valuable brand, stabilize the business, return it to profitability, reinvest behind growth and use Tilray's global platform to expand its reach globally. Investors should also understand the cadence of our business. Not every quarter will look the same because parts of our portfolio are seasonal, and our fiscal year is more heavily weighted to the second half across beverage, cannabis and distribution. What matters is where we are going. Tilray is becoming larger and more diversified and more globally recognized with multiple levers to drive growth, expand margins and to improve profitability over time. In the U.S., we continue to believe cannabis reform will create significant opportunities over time. And when it does, Tilray is prepared to act from a position of strength. But our strategy is not dependent upon 1 regulatory event. Delays in rescheduling have impacted sentiment towards cannabis stocks, including ours, and we believe the market too often evaluates Tilray as if we are just a pure-play U.S. cannabis operator, but we are not. Tilray is a global, diversified business with established positions in cannabis, beverage, wellness and pharmaceutical distribution, and we will continue to grow with or without a single regulatory outcome. In Q1, we delivered record revenue of $257 million, up 23% year-over-year and a record first quarter gross profit. We also expanded gross margin year-over-year, demonstrating that Tilray is not only getting larger, but also building a stronger financial profile. That progress reinforces our confidence as we move into the seasonality stronger second half of our fiscal year, and we're maintaining our adjusted EBITDA guidance for the year. Turning to international. This is 1 of Tilray's most important growth engine and 1 of the clearest examples of why our global platform matters. In Q1, EMEA revenues, including medical cannabis, beverage and pharmaceutical distribution combined increased over 70%, reflecting momentum across our markets where Tilray already has infrastructure, regulatory expertise and commercial reach. International cannabis revenue grew 21% year-over-year, while EU-GMP medical cannabis shipments accelerated with flower volumes up 110%, oil volumes up 150% year-over-year. This is where Tilray is built to lead. Regulated markets where demand is growing, standards are high, operating expertise matters, including scale, low cost and quality. The leadership is backed by vertically integrated global cannabis supply chain that gives Tilray control across cultivation, production, distribution and patient access. Approximately 90% of our international cannabis supply comes from our Portugal facility, which anchors our European cannabis operations and is 1 of the most strategically assets in our global network. Together with low-cost production in Canada, EU-GMP capabilities in Portugal and Germany, pharmaceutical distribution through CC Pharma, direct patient access through Lyphe in the U.K. and a proprietary genetics bank, Tilray has built an end-to-end cannabis operating model designed to compete and win across regulated medical markets. Our strategy is to leverage the global scale, regulatory expertise and patient access model to capture growing demand, improve product mix and drive greater profitability as these markets scale. Europe has become 1 of Tilray's most important growth markets with opportunities across Germany, Poland, the U.K. and Italy, and our international opportunities extend beyond Europe. We are also expanding in Australia and New Zealand, creating additional pathways to scale our medical cannabis business and capture growing patient demand. In the U.K., Lyphe gives Tilray a powerful strategic advantage, direct access to patients. We are focused on improving and shortening the patient journey, doubling Lyphe's patient base and scaling Tilray medical products through an integrated pharmaceutical distribution network. Across Europe, we continue to strengthen the economics and performance of our medical cannabis operation. In Portugal, we reduced our operating and cultivation costs by approximately 40%, while improving strains, process and potency. We believe Portugal is now among the lowest cost cannabis producers in Europe, and we expect this facility to deliver more than 40 metric tons of flower at full capacity in our fiscal year 2027. In Germany, Aphria RX is operating at 100% capacity. Portugal and Germany, combined with our low-cost production position in Canada gives Tilray 1 of the strongest global cannabis operating models in the industry. With the scale we have, the cost structure, quality standards and operating discipline to compete and win across regulated medical cannabis markets. And importantly, our advantage extends well beyond cultivation. CC Pharma provides Tilray with pharmaceutical distribution, infrastructure, commercial relationships and market access in 1 of Europe's most important regulated medical markets with distribution to over 16,000 pharmacies. CC Pharma is more than a growing distribution business. It is a strategic connector across pharmaceutical distribution, medical cannabis and patient access in Europe, strengthening our competitive position and creating additional avenues for profitable growth. In Canada, Tilray is built to gain share, strengthen profitability through scale, low-cost cultivation, low-cost processing operation and focused commercial management. Our scaled cultivation operation gives us a meaningful advantage, particularly as we come out of the summer transition to new cultivars. These strains are improving yields, lowering costs and giving consumer the potency and terpene profiles they expect. Even with inflation in cannabis input costs, we have continued to reduce cost per gram and improve our margins. We're harvesting these cultivars now across our network, and we expect to see a larger impact late in Q2 and beyond. The cost leadership, together with our brand portfolio and sharper market focus, gives us a clear path to gain share in Canada while protecting profitability. It also positions us as well as the market evolves beyond traditional cannabis formats into new consumer occasions. Cannabis beverages are 1 of the most exciting and compelling examples of that opportunity. Today, Tilray pays over CAD 100 million in excise tax and the legal cannabis industry has become an increasingly important contributor to the government revenue across Canada. And as governments look for responsible ways to expand that revenue base while strengthening the regulated market, cannabis beverage represents a clear opportunity for that. Tilray is the largest producer of THC beverages in Canada with over a 40% market share. And a broader access through bars, restaurants and other regulated outlets would be a meaningful win for consumer, governments, hospitality operators, and of course, the legal cannabis industry. It would give consumers a safe, regulated environment to try THC cannabis beverages, help drive traffic to hospitality venues and create a stronger and more accessible legal cannabis market. In beverages, BrewDog gives Tilray more than a global brand. It gives us a passionate consumer following, a scaled hospitality footprint and significant runway to expand across beer, spirits, nonalcoholic beverages and ready-to-drink formats. We see BrewDog as a major growth engine for Tilray, a brand with global reach, cultural relevance and the potential to help reshape our beverage alcohol business over time. Beverage revenue increased 82% year-over-year to $101.5 million in Q1, largely driven by BrewDog. BrewDog also contributed to sequential growth in the beverage segment, reinforcing the early impact of the acquisition and the momentum we're building. Importantly, BrewDog became profitable in Q1. Since taking ownership, we have stabilized operations, invested behind the brand, returned BrewDog to profitability and began unlocking new growth. We recently launched BrewDog's first major campaign under new ownership, followed by the U.K.-wide Choose Craft campaign, which celebrates the quality, flavor and character that makes craft beer worth choosing. The early response has been strong since the Under New Ownership campaign launch and Choose Craft began rolling out Punk IPA sales across BrewDog's top 6 off-trade retailers, up 187% over the last 2 weeks compared with the same period last year. At the same time, BrewDog has also secured over 9,000 new distribution points with the launch of its latest craft beer innovation. BrewDog has also launched 8 new on-trade partnerships across live entertainment, sports, pubs and hotel. This is exactly the kind of momentum we expected when we acquired BrewDog, a globally recognized consumer brand that Tilray can stabilize, reinvest behind and scale across markets, channels and different occasions. We see a major opportunity to make BrewDog an even larger part of Tilray's international growth story. Our strategy is to grow BrewDog globally through a combination of expanded distribution, local market partnerships and a franchise system of BrewDog pubs, bars around the world. As Tilray expands across global medical cannabis markets, we're also building relationships, infrastructure and market knowledge that can support the broader international growth of our beverage businesses. Through strategic partnerships, we plan to expand BrewDog's operations and build bars across key markets where Tilray already has a presence or see attractive long-term opportunities, including India, Poland, France, Israel and the Middle East. This is how we can use Tilray's global reach to take BrewDog into more markets, create new consumer touch points and strengthen the international growth profile of our beverage business. Long term, we see room for top line synergies between beverage and cannabis globally. We're already using BrewDog's reach to expand the beverage portfolio globally, including the launch of over 20 Tilray-owned American craft beers and functional beverages across the U.K. BrewDog also delivered strong brand proof points at the 2026 World Beer Awards with Hazy Jane, Wingman and Mackie's Two Scoops earning Gold and Scotland Country Winner honors. Looking ahead, our focus is clear: continue integrating BrewDog, strengthening the business and investing behind its global brand, hospitality platform and consumer experience. With BrewDog, we're not just building a stronger beer business, we're building a broader global consumer experience rooted in great beer, powered by new innovation, connect with today's dynamic consumers across craft beer, nonalcoholic beverages, ready-to-drink formats, food, digital engagement and live experience. This is how we take BrewDog beyond beer, deepen our connection with consumers around the world and build 1 of the most dynamic global beverage and hospitality platforms in the industry. Across Tilray, we're managing the business with purpose, allocating capital to the opportunities where we see the greatest potential to improve performance, expand margins and continue to grow profitability. Cost controls and capital allocation remain central to how we operate. We have streamlined our operating structure, captured acquisition efficiencies, optimized production and procurement and maintained focus around corporate costs. These actions are creating greater operating flexibility and allowing us to invest behind the business in the markets where we see the strongest potential returns. Our Q1 result demonstrates that progress, revenue growth, record first quarter gross profit, gross margin expansion and continued cost savings. We are building momentum. We are focused on converting that progress into stronger performance across the portfolio. In beverages, we improved gross margin sequentially and year-over-year despite normal beer seasonality, higher input costs and, of course, fuel surcharges, a clear sign that BrewDog integration, cost disciplines and operating efficiencies are beginning to translate into stronger performance. That progress is important because it shows we're improving the financial profile of the Beverage segment and creating additional margin upside over time. In U.S. beer, we're building a stronger, more competitive business. The category is dynamic. Distributor consolidation is reshaping the route to market, and Tilray has the reach, focus and brand portfolio to gain share in the markets where we can win. We're simplifying the business, taking cost out, continuing SKU rationalization and putting a sharper focus around the channels, retailers and distributors that can drive profitable growth for us. Our spirit business, also important part of the broader U.S. beverage strategy, giving us another platform to reach consumers around many occasions, expand higher-margin innovation and deepen our relationship with distributors, retailers and on-premise partners. This work takes time, but the opportunity is meaningful, sharpen the portfolio, improve commercial performance and convert Tilray's U.S. beverage footprint into a stronger and a more profitable growth over time. We're beginning to see clear proof points that our U.S. beer turnaround strategy is gaining traction. According to Circana data for the 14 weeks ended August 30, Tilray is now the #2 craft vendor in Georgia and the West, #4 in New York State and SweetWater is the third-largest craft brand in Georgia, representing 12% of craft beer sales in that market. We're also seeing meaningful brand level momentum with Montauk Juicy IPA up 25%, SweetWater High Light up 38% and the Terrapin brand family delivering a 21-point swing and growing 7.5% fiscal year-to-date and Breckenridge Juice Drop up 22% in their respective priority markets. Just as important, our portfolio and packaging decisions are working. Our 4-pack 16-ounce strategy drove 28% growth on the West Coast and key innovation, particularly Popsicle, Pub Light and High Voltage added more than 100,000 cases in Q1. These moves sharpen our focus, give distributors and retailers stronger reason to support our brands and position Tilray to gain share in the market where we can win. As we strengthen our core U.S. beer business, we're also positioning it for the next phase of growth through strategic partnerships that expand our scale, capabilities and commercial reach. Our exclusive multiyear partnership with Carlsberg Group reinforces the U.S. beer business we are building. Carlsberg is 1 of the world's premier brewing organization and is widely recognized as 1 of the largest global brewers with a business over 30x the size of Tilray's beverage operation. The fact that a brewer of Carlsberg's scale, global sophistication, partner with Tilray as its U.S. brewing and commercial partner matters. It validates that our brewing capabilities, our quality standards, our commercial reach and our ability to scale international brands in the U.S. matters. Beginning January 1, 2027, Tilray will produce, market and sell and distribute Carlsberg, Carlsberg Elephant, 1664, and Kronenbourg 1664 Blanc across all channels in the United States. We expect this partnership to deliver immediate scale, revenue contribution when it begins, add global recognized premium European beer brands to our portfolio and deepen our relationship across the distributor and retail network. Just as important, we expect the partnership to strengthen and evolve over time as we combine Carlsberg iconic brands, brewing heritage and global category expertise with Tilray's national go-to-market capabilities. Taking together, BrewDog and Carlsberg gives us 2 powerful levers to build a stronger, more diversified and more profitable beverage business over time. In wellness, Manitoba Harvest remains another strong Tilray brand with room to grow beyond its core hemp platform. We're expanding Manitoba Harvest into adjacent brands, plant-based products and new wellness occasions using the brand's leadership in hemp foods to build a broader health and wellness portfolio that can reach more consumers across grocery, natural and of course, e-commerce channels. Across Tilray Brands, we're building something few companies in our categories can replicate, a diversified global business with powerful brands, international infrastructure and operating capabilities across cannabis, beverage, wellness and pharmaceutical distribution. The next phase is clear: improve productivity, expand margins, generate cash and convert our platform into stronger earnings power. This is why even with industry headwinds, timing dynamics in the U.S. beer and planned integration growth investments, we are reaffirming our 2027 adjusted EBITDA guidance. We remain confident in our ability to deliver through the balance of the year because the underlying direction of our businesses is strong, better operating performance, stronger cost controls and growing contributions from BrewDog and international cannabis and multiple levers to expand our profitability. Our growth plan is anchored in opportunities we can control today, expanding global medical cannabis in the markets where we already operate, leveraging our low-cost cultivation and international supply chain, scaling craft beverages, growing wellness and pharmaceutical distribution and maintaining the disciplined capital allocation. At the same time, we continue to preserve meaningful upside from future cannabis reform globally, including the U.S. Lastly, we know profitability matters and how important it is to our shareholders. We are laser-focused on improving earnings, generating cash flow, driving shareholder value. But it's also important to recognize what we have accomplished today. We have approximately $221 million of cash on our balance sheet. We have settled more than $42 million of debt fiscal year-to-date. We continue to actively evaluate opportunities to further strengthen our capital structure and reduce interest expense. This quarter, we report a net loss of $40 million. Excluding noncash, nonrecurring items, our adjusted net loss was approximately $3 million, including roughly $5 million of net cash interest expense. Simply put it, we continue to reduce the interest burden, earnings power of this business becomes increasingly visible. We know exactly what we need to do, improve performance, expand margins, generate cash, grow sales and convert Tilray Brand assets and operating capabilities into stronger earnings and sustain value creation. With that, I'll turn the call over to Carl to walk you through the quarter in more detail. Carl, let's go. Carl Merton: Thank you, Irwin. Before I begin, please note that we present our financials in accordance with U.S. GAAP and in U.S. dollars. Throughout our discussion, we will be referring to both GAAP and non-GAAP adjusted results, and we encourage you to review the reconciliation contained within the earnings press release of our reported results under GAAP with the corresponding non-GAAP measures. Turning to our Q1 results. Tilray delivered record first quarter revenue and record first quarter gross profit, with net revenue increasing 23% year-over-year to $257.1 million, compared to $209.5 million in the prior year quarter. Growth was driven by the addition of BrewDog, continued strength in international cannabis and solid performance from our distribution business. Gross profit increased 35% to $77.5 million and consolidated gross margin increased approximately 300 basis points to 30%. These results reflect the same principles Irwin outlined, expanding gross margin, improving the quality of revenue and positioning the business for sustainable, profitable growth, all of which we are doing. Beginning with international cannabis, which remains 1 of our most important growth engines, revenue increased 21% year-over-year to $16.2 million, driven by higher patient demand in Germany and contributions from Lyphe in the U.K. Total cannabis net revenue was $56.1 million, compared to $64.5 million in the prior year quarter, reflecting our disciplined decision to prioritize profitable growth and higher return international opportunities. Cannabis gross margin increased approximately 300 basis points year-over-year to 39% from 36%. Cannabis gross profit was $22 million in the quarter, compared to $23.3 million in the prior year quarter as stronger margin performance helped offset approximately $8.8 million of price compression in international markets. The margin improvement was driven by operating efficiencies, a stronger product mix in Canada, and importantly, increased utilization of our Portugal facility, which lowered unit costs as production volume scaled. In Canada, we continued to prioritize profitable growth over volume amid competitive market conditions. Adult-use cannabis revenue was affected by planned strain rotations, temporary supply constraints and our decision to redirect approximately 1 metric ton of inventory, representing $1.1 million of potential Canadian revenue to higher return international markets. This is consistent with our broader strategy to use Tilray's global platform, low-cost cultivation and processing basis and EU-GMP capabilities to allocate product where it can generate the strongest returns. Turning to beverage, where Irwin spoke about BrewDog as a global brand and scaled platform, segment net revenue increased to $101.5 million, compared to $55.7 million in the prior year period. The increase included $55.9 million of incremental revenue from BrewDog, which meaningfully expands the scale, international reach and margin profile of our beverage platform. The acquisition transformed our beverage business from a primarily U.S.-focused operation into an international craft beverage platform, adding brands, distribution capabilities and consumer reach across multiple markets. BrewDog also strengthened the segment's profitability profile as beverage gross margin expanded by approximately 300 basis points to 41%. Our legacy U.S. craft beverage business continues to operate in a challenging market. We are taking decisive action to streamline operations, improve brewery utilization and focus investment where consumer demand is strongest. Consistent with Irwin's comments on the strategic role of our European infrastructure, our CC Pharma distribution business continued to perform well, exceeding expectations as net revenue increased 14% to $84.3 million, compared to $74 million in the prior year quarter, supported by competitive pricing and product mix. Distribution gross margin remained consistent at 11%. However, excluding a $1.3 million prior year classification difference, improved year-over-year due to favorable product mix, higher average selling prices and cost reduction initiatives. Distribution remains an important strategic asset, supporting both profitability and our broader European medical cannabis infrastructure. Within wellness, performance was relatively stable with revenues of $15.3 million. Innovation and new product offerings continued to gain traction, although temporary constraints in the supply of organic hemp seed affected certain e-commerce channels during the quarter. We remain encouraged by the portfolio and the opportunities ahead, particularly as we continue to focus investment behind categories where Tilray can build durable consumer platforms. Moving to profitability, we reported a net loss of $40 million compared with net income of $1.5 million in the prior year quarter. Excluding noncash and nonrecurring items, adjusted net loss was $3 million, of which $5 million related to net cash interest expense. Without the cash interest, which we are actively working to eliminate, we would have made $2 million of adjusted net income. The year-over-year change primarily reflected higher costs associated with investing back in our business, including higher marketing costs to drive growth and headwinds from fuel surcharges. Adjusted EBITDA for the quarter was $9.2 million, compared with $10.2 million in the prior year quarter. Results were impacted by $8.8 million of international cannabis price compression, as well as fuel surcharges associated with the broader geopolitical landscape. These fuel-related costs increased by $1.7 million compared with the prior year quarter, representing a discrete external cost headwind to adjusted EBITDA. Excluding these impacts, the underlying business continued to benefit from improved utilization, acquisition integration and disciplined cost management, and we expect those initiatives to strengthen performance as we progress towards our fiscal 2027 guidance. Turning to cash flow and the balance sheet. We ended the quarter with approximately $221 million in cash, restricted cash and marketable securities. During the quarter, we raised a modest amount of capital through our ATM program, leaving $70 million available and continued to reduce debt through additional note exchanges. We retired $24 million of principal during the quarter and a further $12 million after quarter end, leaving $52 million of principal outstanding. As we move toward the June 2027 maturity, our capital allocation priorities remain unchanged. Strengthening the balance sheet, reducing future obligations and investing selectively where return support sustainable, profitable growth. From a capital allocation perspective, last quarter, our focus centered on the approximately $50 million purchase price for BrewDog and an additional $50 million of short-term funding while cash collections followed 90-day payment terms. With that initial collection cycle now behind us, we expect ongoing funding requirements to be materially lower and largely limited to capital expenditures. Importantly, BrewDog required no cash injections during the quarter and was self-financing. Looking ahead, our focus remains on the operational levers that drive stronger profitability and cash generation, expanding cannabis margins through international scale and cultivation efficiencies, realizing BrewDog integration benefits, optimizing our beverage manufacturing footprint, preparing for the transition of Carlsberg production and sales control in the U.S., improving working capital efficiency and continuing to strengthen the balance sheet. Market conditions remain mixed across several categories, but our priorities are clear. We are focused on disciplined execution, profitable growth and building a stronger global platform that can create long-term shareholder value. Based on our current outlook, the strength of our diversified platform and the actions underway across the business, we are reaffirming our fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million. Operator, we can now open the call for Q&A. Operator: We'll now be conducting a question-and-answer session. [Operator Instructions] And the first question today is from the line of Aaron Grey with Alliance Global. Aaron Grey: First question for me is just on the international cannabis dynamics. I know you mentioned some of the pricing pressure. Just as we think about the broader competitive environment with 2 of the largest players potentially combining, how are you thinking about the international landscape and how you're best positioned to ensure that you have durable sales growth? Irwin Simon: Thank you, Aaron, and good question. Number 1, I think the most important thing is that we have the grow. And with the facility that we have in Cantanhede and what we have in Germany. So we have tremendous amount of grow for either flower or oil. The second thing is, listen, we've been in the marketplace internationally now for 7 years. So we have infrastructure of people. We have relationships with doctors. We have expanded in other countries. So again, it's just getting out there and selling our products. And 1 of the other things that we have different than a lot of other companies, we have something called CC Pharma, which is a pharmaceutical distribution business that goes direct to drugstores. So I really, really feel good about our international business. And it's not that we have to go out there and look for grow to sell. We have plenty of grow if we don't have enough grow, we have Canada to be able to serve those. So we have product, we have oil, we have flower. We have infrastructure. We have great relationships out there. We have CC Pharma that sells into 16,000 drugstores. So I'm not concerned about the potential combination that could happen out there. Aaron Grey: Okay. Great. Appreciate that, Irwin. Second question for me, just on the alcohol side, specifically on the gross margin. Just given some of the dynamics you talked about with distribution consolidation and broader structural challenges, just how do you think about the gross margin evolution for the category? As you think about BrewDog now being integrated and other dynamics that you could have? Irwin Simon: So again, from a gross margin standpoint, listen, we got into this business 2020 with SweetWater, Montauk came along, which we integrated into SweetWater and then came the ABI businesses and the Montauk and then the Molson businesses. All of a sudden, we're sitting with 8 to 10 breweries. So number 1 was getting rid of some of the smaller breweries, which we have in regards to Revolver, in regards to Terrapin, Fort Collins. And there's 1 more we sold off, Atwater. There's probably 1 more that we could integrate -- that we can close and integrate and which there's some big savings from there. So number 1, it's integration of our facilities and getting them down to 5 or 6 facilities that have tremendous capacity that are strategically located. And bringing on Carlsberg is going to be a big feat for us, which there's going to be a lot of product and a lot of opportunities with that. So that's number 1. And with that, combining all these breweries is also getting the benefits of hop supply, getting the benefits of other ingredients, cans, et cetera. So that is in place. Number 2, as we all know, as this 3-tier system, there's been a lot of change going on with distributors. For instance, in New York, we have ABI that has Blue Point and Shock Top. We have someone else that has Montauk, another distributor that has BrewDog and we'll have Carlsberg. So we're in the midst of trying to consolidate distributors out there, so we only have certain shipping points, and we become an important part of that distributor, and that's happening. And in a 3-tier system, that is not the easiest to make happen. And the third thing is, what we're really changing is the way we go to market, where we were dependent upon distributors going into the pubs and at retail. And now what we're doing, whether it's Kroger or whether it's Walmart, we're calling on them ourselves and making sure we get the PODs. So it's coming together, a little different than the consumer packaged goods business where you just went to a Walmart and like my old company, Hain, and you sold and you shipped to Walmart's warehouses. And -- but the good news, and I -- what I feel good about is the lineup that we have in the beer categories today on a regional basis, not so much on a national basis. And with Carlsberg and Shock Top, we have 2 great national brands out there. And again, as we look at our beer brands from a standpoint with 18 beer brands, do we put 1 or 2 of them together and just get out of some of the smaller brands. So we continuously look at that. We'll continuously expand into the seltzer business, which we have. We continuously with HiBall, which is our energy drinks. We're looking at other things with water. There's lots of innovation out there. We saw Constellation pay for a vodka seltzer business yesterday that is a mix. We can go out and create them and not go buy them. So there's a lot we'll create as we have manufacturing, we have distribution. We have tremendous amount of infrastructure and R&D. So there's lots out there for us to do with this whole beer category. And listen, my hope 1 day, we can sell cannabis drinks because if we could sell cannabis drinks throughout the United States or our hemp drinks, there's either a few hundred million dollars or $1 billion opportunity business for us, and we have the infrastructure and the ability to do that. Operator: The next question is from the line of Bill Kirk with ROTH Capital Partners. William Kirk: So there was a line in the release about BrewDog reaching profitability in 1Q. I don't recall that having happened in 4Q, and I think BrewDog was at an operating loss for years. So Irwin, you talked about ways BrewDog can grow. But maybe can you add a little bit more detail on how you were able to quickly turn years of losses into a profit? And do you expect it to stay profitable? Irwin Simon: Well, number 1, the big thing is I was not saddled with a lot of their bars and pubs that were losing money. So that's number 1. Number 2, we rightsized in regards to people that we did not have to take. When you go into administration, there was a whole lot of leases that we didn't have to take or new leases that we renegotiated. So from a standpoint, that was a big part of it. But we really put good cost controls in place as we -- there was a big facility up in Aberdeen that we really focused on. We moved away from unprofitable businesses as the spirits business, they had already shut it down. So there are things that we did. We also had a great, great summer with the World Cup with our bars that we did have open. And again, the opportunity in which we're seeing today as we launch the campaign, okay, you can cut your way to profitability, but it's growth within the brands. And when we took this business over, the brands were declining double digits and started to claw their way back, and now we're seeing good growth among the brands from a depletion standpoint with the campaign. Now when we took this business over, people thought BrewDog went away. So do I -- absolutely. The budget for this year is profitability and some good profitability coming from BrewDog. And what I'm excited about, too, is the expansion opportunities, not only in the U.K., is what we'll do in Australia, what we'll do here in the U.S. and different partnerships that we plan to do in both brew pubs and distribution in other countries around. William Kirk: Irwin, can I just add one more point? Hello? And then if I could follow up on the Canadian adult-use contraction. Carl outlined a few reasons and decisions that contributed to the year-over-year contraction. I guess, going forward, would you expect a similar deliberate headwind dynamic? Or are some of the factors more specific to 1Q decisions made in 1Q and year-over-year looks better here after 1Q? Irwin Simon: So more decisions was this Q this happens all the time as we come off the summer months and yields and as we transition from different strains. That is number 1. Number 2, we're focused on margin. And I think what's important from a standpoint there is being focused on profitability. The other thing which, again, which I feel good about Canada, Canada is 40 million people and half the population in the age that can consume cannabis there's a couple of big things that we have to do there is move more and more away as we're looking at from the illicit market. And 1 of the opportunities that's in place right now that could happen is cannabis drinks being sold in food establishments in restaurants and bars and in beer stores. And that's on the table in Ontario, a couple of other provinces. And with us having over a 50% share and having the production for us, that would be big. One of the big things in Canada is its excise tax. And we pay over CAD 100 million in Canadian excise tax. If we were just -- if we were selling alcohol and it would be half that. And what all these governments are looking at, sales are down on American brands and alcohol and sales are down on alcohol, how do I replace that with additional cannabis sales? And there's stuff going on in Quebec in regards to age. There's additional products that can be sold in convenience stores. So that's the way the Canadian market ultimately is going to grow is more and more cannabis products that are available, not just through cannabis stores. Operator: The next question is from the line of Pablo Zuanic with Zuanic & Associates. Pablo Zuanic: Look, 2-part question regarding Carlsberg. Can you give us a sense what's the upside there in terms of revenues? I don't know who is producing or distributing Carlsberg before. What were their peak sales? Anything to help us frame the potential for Carlsberg in the U.S., that would help. And then the second part to the question relating to Carlsberg. I think you said in your prepared remarks, you expect the partnership to strengthen and evolve over time. If you can give more color in terms of what that could mean? Irwin Simon: Thank you, Pablo. Listen, I spent a lot of time with the Carlsberg team. They're 1 of the largest beer producers in the world today. And they have tremendous growth across their brands and some of the other products. As I spent time with them on their innovation, as product development, their brewing capabilities. So that brings a tremendous asset to Tilray that we can tap into a company of that size, that scale, as a partnership here. And there's other companies out there that partner with other cannabis companies on the cannabis side. We're fortunate to have a partner like Carlsberg to partner with us on the beverage side. So from a standpoint, right now, we obtain -- it's a venture of profit sharing that all the Carlsberg products will be produced in our U.S. plants. We have the distribution, marketing, selling rights to all of the U.S. And with that, it's all Carlsberg products. And where are the opportunities? Additional innovation that comes from Carlsberg -- and there are other markets that 1 day that we hope to talk to Carlsberg about that we can sell to. And there's a lot -- there's a big country out there that we would expand in and Carlsberg is around the world. And the other opportunity is this here. Carlsberg distributing some of our products in certain markets that we'd like to go into. So there's lots of opportunities, and it's been a pleasure to work with them. And I think what they ultimately see is here, U.S. being 1 of the biggest beer markets here, and they were basically seen as an import, and they really want to see U.S. being a big foothold for them in their growth factor. Pablo Zuanic: Look, just in terms of M&A, I know Carl spoke about cash deployment and priorities in terms of cash allocation. But I understand you're building a diversified business platform. But in the first quarter, beverages were 54% of your gross profits compared to cannabis, 28%. So just looking forward in terms of M&A, do you still need to make acquisitions in the case of cannabis, whether in Canada or overseas? Or is it more about expanding the beer business and pretty much doubling down on beverage exposure? Irwin Simon: So I think, again, you got to come back and see how they're complementary. You heard what I said about Canada. Number 1, yes, we'll continue to grow recreational and medical cannabis in Canada. But Canada is only so big in size. But what's the opportunity is the synergies in the beverage business and growing other products in Canada, okay? And I think that is a big, big opportunity. As I say, if I could get our beverages into multiple additional outlets in the Canadian market, that's big for us and something will happen there. So again, as I put these 2 businesses together, and what happens, Pablo, as beverages and cannabis can come together, there's lots of overhead sharing. There's lots of cost savings, a lot of infrastructure that we put together that's going to be beneficial for this company. The same internationally. Now as we look at different countries internationally, whether it's India, whether it's Israel, whether it's Poland, whether it's Spain, as we go in there with medical cannabis, the same team that's focusing on medical cannabis will focus with our beverage team and look for partnerships or franchises along with our BrewDog products and some of our American beers. So yes, again, as we put these 2 businesses together, they're complementary, and they both will absorb overheads that we have to put in place for 1 business. And that is the big thing for us today, scale. As we get to that billion too, listen, being a cannabis company today, we're stuck with much higher insurance costs. We're stuck with much higher IT costs, much higher grow costs in regards to R&D and quality, what Health Canada makes us do. So if we can take a lot of those costs and share them among other business. It's a big, big, big benefit for Tilray. Pablo Zuanic: And if I may, can I ask -- I want to add just 1 more. In terms of the changes in Germany on reimbursement on extracts and flower, I believe that started July 1. Can you frame that? Did you see any impact from that? Or is your business mostly cash payer versus reimbursed? Irwin Simon: So number 1, majority of our business there is flower. And most of our patients are paying customers. In regards to different oil, it is for new patients coming in, not the existing patients. So will there be some impact? Yes, but is it extremely impactful to our business? No. Operator: Our next question is from the line of Brenna Cunnington with ATB. Brenna Cunnington: So regarding the recent cultivation expansions, based on my analysis on this, like for the size of the current and pending EU-GMP facilities that Tilray has, I'm estimating that Tilray has like 1 of the largest, if not the largest EU-GMP footprint of the peer group. So I would just love to get a little bit more color on when and how you think we might be able -- or we might see the real power of this footprint show through in Tilray's international sales. Irwin Simon: So again, number 1, you're seeing the power and with Masson in Gatineau, Quebec, that just coming on now. And ultimately, within the year, that will become EU-GMP certified. And in regards to what we're growing today in Europe. As I said before, the power is we have the product. And the thing is this here, in talking to our patients and talking to the customers and distributors out there, they want consistency. It's not like they want to be buying from 5 or 6 different growers out there and not what they're getting. So again, in Portugal, I mean, from a standpoint, in regards to how many -- what do we grow? What's the size? What? We have over 40 metric tons, and then we have 4 or 5 metric tons that will come out of Germany. So we have plenty, plenty of capacity. And with that, as you can see, we're 1 of the lowest cost producers out of our Portugal facility today. So again, you're seeing it. That's why you see our margins improving, and that's what you'll continuously see. And the big thing is this here, this is 1 of our smaller quarters in regards to selling. Cannabis, you can't look at it quarter-over-quarter. So again, from a sales standpoint, as sales continuously increase. And the big thing is our margins even grew, even with price compression out there, which is pretty amazing. Brenna Cunnington: Okay. That's great color. And then just tapping on to 1 of the previous questions on the potential for THC beverages in the U.S. I would just love to get any color on what you're hearing, if there might potentially be a carve-out for this segment in the hemp bill that we're expecting in this fall. Irwin Simon: Listen, again, if I go to the Polymarket and maybe I should and get to see what they're saying is this here, and I never wanted to guess about politics. Everything we're hearing is there's 2 different things. There will be an extension, and it will go to the next Congress and the new Congress will approve. So I don't believe that hemp -- this whole hemp business will go away. There's too many jobs, and there's too much -- from the farmer's standpoint, it's too big for farmers just to be shut down on this business. So I think there will be another extension beyond December 11. And then I think the new Congress will approve where there's a certain amount of milligrams that could be sold. And I think the big thing is Tilray is hanging around the hoop there. We have products we're selling. We're not out there aggressively doing anything. We're staying in the marketplace waiting to see what happens, and we can turn on pretty quickly, depending on where it goes. Operator: The next question is from the line of Ryan Neal with TD Cowen. Ryan Neal: This is Ryan on for Derek. Just to start off, and apologies if I missed this off the top, but do you have an idea of what Beverage segment growth would have been excluding BrewDog? Irwin Simon: Our beverage business ultimately would have been down, excluding BrewDog, and that is because we've gone through SKU rationalization and brand rationalization. Ryan Neal: Okay. Great. And then just as a follow-up, I'm just curious on the gross margin compression we saw in Wellness this quarter. Is that a function of any promo spend, et cetera? And how should we think about margins in that segment moving forward? Carl Merton: So that compression was really caused by a onetime organic seed shortage that was feeding our e-commerce business, and so we had a slight change in mix. Operator: At this time, I'll turn the floor back to management for further comments. Irwin Simon: Thank you very much, everybody, for getting on our call today. As you can see, there is a lot going on at Tilray. And there's a lot to understand within Tilray, and I'm not sure on a regular basis as we try to explain our business in regards to our different businesses, as we explain our businesses in regards to our different categories. And the other thing is geographically, today, we sell in over 25 countries around the world. We deal with multiple currencies. We have wars that are going on that affect us from a utilities, from fuel standpoint. And we have different teams as we pull together. But I think the big thing is this here, as you really look at what's under the hood at Tilray, there's some incredible brands -- we have -- we produce 95% of our own products around the world. We grow, which growing cannabis in over 6 million square feet and today, over the metric tons that we really grow. And we step back and what we're doing in regards to cannabis from a medical standpoint and research out there in regards to sleep, anxiety, pain, PTSD, epilepsy are some of the exciting things that we're doing and building awareness out there. And as things expand, whether it's peptides, psychedelics, Tilray will continuously look at that. Canada is the only country in the world where cannabis is legal from a recreational standpoint. And I think that's ultimately the way it's going to stay. So we really have and we're positioned so well in the cannabis industry. We do not have to go to buy cultivation. We don't have to go buy anything for other countries. We really can expand our business today in so many different ways in flower and oils. We have a tremendous amount of research, development and scientists that work with us in regards to the cannabis industry. In regards to the U.S., listen, it's been waiting and seeing, and we're used to delays, not used to things happening. But the thing is, is here, there's 3 or 4 things. Number 1, if the U.S. happens, it will be great for Tilray, and we'd be ready to pounce and jump in for whatever way it happens. Number 2, if something happens with the hemp drinks, we're ready to go and there's a big opportunity for us there. Number 3, is this here, if nothing happens and it continues to drag along, we have businesses all over the world that will fuel our growth. We'll continuously look at acquisitions. And the proof is what we've done with BrewDog very quickly. And yes, it's not proved as quick as with our beverage business, but it's something that's a great infrastructure, and you still see acquisitions and multiples evaluations. And I think we've created something very unique up there. So there's a lot within Tilray that we're doing. We have over 40 pubs and restaurants around the world that sell our products, both BrewDog and our American beers, that we learn a lot from our consumers. We have in place tremendous amount of research that we continuously get from these pubs that we know what consumers want. In regards to cost today as a stand-alone -- as a company today that's this size, there's tremendous cost in regards to IT, AI, like I said, insurance and what we have in place today to cover it as a public company and being a small company out there today and not have a scale is difficult. And that's a big thing today. Tilray could easily absorb another $0.5 billion to $1 billion of sales with its infrastructure in place. I think that's the big advantage that a lot of companies don't have today, is the scale to absorb all the additional SG&A costs, whether it's being public or just being a company out there today that can support the growth that can support the R&D, that can support the infrastructure that can support the process of the analysis, the finance that is needed within a public company or what's needed in any company today. So I'm proud of what we're doing. Yes, sometimes there is frustration how the stock reacts just on a cannabis multiple, just on a cannabis news. But at the end of the day, when I step back and I look at our brands, I look at what we do, I look at how strong our balance sheet is, and we have opportunities and lots of levers. We have an incredible team. I'm proud of where Tilray is today and where Tilray go -- can go. So thank you very much for your support, and I look forward to speaking to you in the near future. Thank you. Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation. And have a wonderful day. Before you buy stock in Tilray Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tilray Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $375,887!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,459,146!* Now, it's worth noting Stock Advisor's total average return is 955% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 8, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy. Tilray (TLRY) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Tilray (TLRY) stock is in the red this morning even though the cannabis firm posted record revenue of $257.1 million for its first financial quarter — up 23% on a year-over-year basis. But the options market sentiment suggests the selloff is temporary, and TLRY could actually move meaningfully to the upside in the sessions ahead. While gross margin expanded to 30% in Q1, Tilray shares are down about 60% versus the start of this year. - A $40 Billion Reason Why SPCX Stock Is Down Today - Why This Wall Street Analyst Just Issued a Bold Prediction for Nebius Stock - Why Investors Are Celebrating Qualcomm Striking a Licensing Deal with Huawei — Which Is Still on the Entity List - Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Options traders seem to believe that the near-term headwinds are already priced into TLRY stock, which is now trading at a price-to-sales (P/S) multiple of about 0.56x. The put-to-call ratio on contracts expiring Oct. 16 sits at 0.25x at the time of writing, with a reading below 1.00x typically characterized as favoring bears. And the upper price on those contracts, according to Barchart, is set at $3.88 currently, indicating the cannabis stock could rally more than 8.3% from here through the end of next week. That said, Tilray has a history of closing each of the final three months of the year in the red — a seasonal pattern that makes it rather unattractive for the near term. Despite top-line gains, Tilray stock is slipping on Thursday because the cannabis firm swung to a notable net loss of $40 million in Q1 — down from net income of $1.5 million a year ago. Adjusted EBITDA also slipped slightly to over $9 million due to rising operational costs, including $1.7 million in global fuel surcharges. Further dampening sentiment, core cannabis net revenue fell 13% year-over-year to $56.1 million, illustrating persistent pricing pressures in Canada. Combined with negative free cash flow of $27.4 million and ongoing dilution concerns, investors prioritized these bottom-line headwinds over headline sales growth. Investors should note, however, that Wall Street firms haven't thrown in the towel on TLRY shares. The consensus rating on Tilray sits at "Moderate Buy," with the mean price objective of roughly $7 indicating potential upside of a whopping 90% from here. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

- Interested in Tilray Brands, Inc.? Here are five stocks we like better. - Record revenue and gross profit: Tilray's first-quarter revenue rose 23% year over year to $257.1 million, while gross profit increased 35% to $77.5 million, supported by the BrewDog acquisition, international cannabis growth and pharmaceutical distribution. - BrewDog drove beverage growth: Beverage revenue surged 82% to $101.5 million, and BrewDog became profitable during the quarter as Tilray cut costs and streamlined operations. - Mixed outlook and financial priorities: Despite stronger margins, Tilray reported a $40 million net loss and lower adjusted EBITDA of $9.2 million. Management reaffirmed fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million and is prioritizing debt reduction, cannabis-margin expansion and second-half growth. - Curaleaf's Higher Aurora Bid Raises the Stakes in Cannabis Consolidation Tilray Brands (NASDAQ:TLRY) reported record first-quarter revenue and gross profit, driven by its BrewDog acquisition, international cannabis growth and pharmaceutical distribution operations, while reaffirming fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million. Net revenue rose 23% year over year to $257.1 million, while gross profit increased 35% to $77.5 million. Consolidated gross margin expanded by about 300 basis points to 30%, CFO Carl Merton said during the company's earnings call. → 3 Stocks Chopped in Half: Why These Drops May Be Structural, Not a Dip - The Cannabis Sector's Billion-Dollar Tax Cut The company reported a net loss of $40 million, compared with net income of $1.5 million in the prior-year quarter. Tilray said its adjusted net loss, excluding non-cash and non-recurring items, was $3 million, including roughly $5 million of net cash interest expense. Adjusted EBITDA was $9.2 million, down from $10.2 million a year earlier. International cannabis revenue increased 21% to $16.2 million, supported by patient demand in Germany and contributions from U.K.-based patient access business Lyphe. Tilray said EMEA revenue, including medical cannabis, beverage and pharmaceutical distribution, rose more than 70% during the quarter. → Q3 Earnings Could Blow Past Consensus—Be Ready for What Comes Next - The 2026 Cannabis Wildcard: How Tax Reform Could Reset Stock Valuations Total cannabis revenue, however, declined to $56.1 million from $64.5 million a year earlier. Merton said the company prioritized profitable international opportunities over lower-return volume. Tilray also redirected approximately one metric ton of inventory, representing $1.1 million of potential Canadian revenue, to international markets. Cannabis gross margin rose to 39% from 36%, aided by operating efficiencies, product mix improvements in Canada and greater use of the company's Portugal facility. Those gains partly offset $8.8 million in international cannabis price compression, according to Merton. → Why Wall Street Expects Even More From SanDisk After Its 575% Rally Management said its Portugal cultivation operation has reduced operating and cultivation costs by about 40% while improving strains and potency. Tilray expects the facility to produce more than 40 metric tons of flower at full capacity during fiscal 2027. Its Aphria RX operation in Germany is operating at full capacity, the company said. Tilray said its CC Pharma distribution business offers access to more than 16,000 pharmacies and serves as a connector between pharmaceutical distribution, medical cannabis and patient access in Europe. Distribution revenue rose 14% to $84.3 million, while segment gross margin remained 11%. Beverage revenue increased 82% year over year to $101.5 million, including $55.9 million of incremental revenue from BrewDog. Beverage gross margin expanded by approximately 300 basis points to 41%. Management said BrewDog became profitable in the first quarter after Tilray stabilized operations, reduced costs, renegotiated or avoided certain leases and moved away from unprofitable activities. The company also cited a favorable summer period for its retained bars and pubs, along with improving brand sales following new marketing campaigns. "The budget for this year is profitability and some good profitability coming from BrewDog," management said in response to an analyst question. Tilray said BrewDog's Punk IPA sales at its top six off-trade retailers were up 187% over the prior-year period in the two weeks following the rollout of its latest campaigns. BrewDog also added more than 9,000 distribution points for a new craft beer product and signed eight on-trade partnerships across entertainment, sports, pubs and hotels, according to the company. In the U.S., Tilray said it continues to rationalize beer brands and SKUs, consolidate brewery operations and focus on priority channels, retailers and distributors. Management said the legacy U.S. craft beverage business would have posted a revenue decline excluding BrewDog because of those rationalization efforts. The company cited Circana data for the 14 weeks ended Aug. 30 showing Tilray was the No. 2 craft vendor in Georgia and the West and No. 4 in New York state. It said SweetWater represented 12% of craft beer sales in Georgia. Tilray also highlighted its multiyear agreement with Carlsberg Group. Beginning Jan. 1, 2027, Tilray expects to produce, market, sell and distribute Carlsberg Elephant 1664 and Kronenbourg 1664 Blanc throughout the United States. Management described the arrangement as a profit-sharing venture and said all Carlsberg products covered by the agreement would be produced in Tilray's U.S. facilities. Tilray ended the quarter with approximately $221 million in cash, restricted cash and marketable securities. The company retired $24 million of principal during the quarter and another $12 million after the quarter ended, leaving $52 million outstanding, Merton said. The company raised a modest amount through its at-the-market program and had $70 million of remaining availability. Merton said BrewDog did not require cash injections during the quarter and was self-financing after an initial funding period tied to its payment cycle. Wellness revenue was relatively stable at $15.3 million. Merton said segment margin pressure reflected a one-time shortage of organic hemp seed that affected the company's e-commerce product mix. Looking ahead, management said it expects fiscal-year results to be more heavily weighted toward the second half because of seasonality across beverage, cannabis and distribution. The company said its priorities include expanding cannabis margins through cultivation efficiencies and international scale, integrating BrewDog, optimizing its beverage manufacturing footprint, preparing for the Carlsberg transition and reducing debt and interest costs. "Market conditions remain mixed across several categories," Merton said, but he added that Tilray remains focused on "disciplined execution, profitable growth, and building a stronger global platform." Tilray Brands, Inc is a global consumer packaged goods company focused on cannabis, beverage alcohol, wellness and consumer products. The company develops, produces, distributes and markets a range of cannabis products, including dried flower, pre-rolls, vapes, edibles and medical cannabis products, subject to applicable regulations in the markets it serves. Tilray also operates beverage alcohol businesses, including craft beer, spirits and other alcoholic beverages. Its portfolio has included brands such as SweetWater Brewing Company, Montauk Brewing Company and Breckenridge Distillery. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tilray Brands Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

First-Quarter Results Reinforce Tilray's Progress Converting Global Scale, Disciplined Execution and Category Leadership into Higher Revenue, Expanded Gross Profit and Continued Momentum Record First-Quarter Net Revenue of $257 Million, Up 23% Year-Over-Year, with Gross Margin Expanding by ~300 bps to 30% International Business Accelerates as EMEA Revenue Increases 71%, Growth Led by Medical Cannabis, Beverage and Pharmaceutical Distribution Tilray's Global Beverage Business Delivers $101 Million in Revenue, Expands Gross Margin to 41% and BrewDog Achieves Profitability in Q1 Reduced Outstanding Debt by $42 Million Fiscal Year-to-Date and Ended the Q1 with a Net Cash1 Position, Strengthening Financial Flexibility and the Balance Sheet Tilray Reaffirms Fiscal 2027 Adjusted EBITDA3 Guidance of $68 Million to $75 Million NEW YORK and LONDON and LEAMINGTON, Ontario, Oct. 08, 2026 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. ("Tilray", "our", "we" or the "Company") (Nasdaq: TLRY; TSX: TLRY), a global lifestyle and consumer packaged goods company with leading positions across cannabis, beverage, hospitality and wellness, today reported financial results for its first fiscal quarter ended August 31, 2026. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated. Irwin D. Simon, Chairman and Chief Executive Officer, Tilray Brands, stated: "Tilray's record first-quarter revenue and gross profit demonstrate the power of the diversified platform we have built and the momentum we are creating across cannabis, beverage, hospitality, wellness and pharmaceutical distribution. We are no longer dependent on a single market or regulatory catalyst. We have multiple engines of growth, a scaled international footprint and the ability to convert scale into stronger margins, greater efficiency and sustainable, profitable growth." Mr. Simon continued, "Our global platform is translating into leadership positions across our core categories. In cannabis, Tilray is a leading cannabis producer, with more than 6 million square feet of cultivation capacity across Canada, Portugal and Germany, and a leading low-cost production base in the world's largest legally regulated markets, supported by one of the largest EU-GMP certified footprints in the world. In beer, the world's largest consumed alcoholic beverage category, we are the #4 craft brewer in the U.S. and #1 in the U.K., and we are very proud that Carlsberg has partnered with Tilray to begin producing and selling its iconic brands in the U.S. market starting January 1, 2027. Across beverage and wellness, we are accelerating innovation and staying closer to consumers. These leadership positions reflect the work we have done to integrate our businesses, sharpen operations and build a more focused, profitable company. Tilray is building a category-defining global platform for the next generation of wellness, healthcare and consumer products, with the brands, infrastructure and scale to lead as these markets evolve." The quarter's performance reflects Tilray's focus on building durable growth across multiple categories, strengthening profitability and maintaining a disciplined balance sheet while investing behind the long-term opportunities we believe will define the future of cannabis, beverage, wellness and healthcare. Financial Highlights All comparisons made to the prior year period - Net revenue increased 23% year-over-year to $257.1 million in the first quarter, compared to $209.5 million. - Gross profit increased 35% year-over-year to $77.5 million in the first quarter, compared to $57.5 million, while gross margin expanded to 30% from 27%. - Cannabis net revenue was $56.1 million in the first quarter compared to $64.5 million. - Cannabis gross profit was $22.0 million in the first quarter compared to $23.3 million. - Cannabis gross margin expanded to 39% in the first quarter compared to 36%. - Beverage net revenue increased 82% year-over-year to $101.5 million in the first quarter, compared to $55.7 million, reflecting the acquisition of BrewDog. - Beverage gross profit increased to $42.0 million in the first quarter compared to $21.3 million. - Beverage gross margin expanded to 41% in the first quarter compared to 38%. - Distribution net revenue increased 14% to $84.3 million in the first quarter compared to $74.0 million. - Distribution gross profit increased $9.1 million in the first quarter compared to $8.0 million. - Distribution gross margin was 11% in the first quarter and was unchanged. - Wellness net revenue was $15.3 million, consistent with the previous year period. - Wellness gross profit was $4.4 million in the first quarter compared to $4.9 million. - Wellness gross margin was 29% in the first quarter compared to 32%. - Driven predominantly by non-cash charges, net loss was $40.0 million in the first quarter and net loss per share was $0.32. Adjusted net loss2 was $3.0 million in the first quarter and adjusted net loss per share or adjusted EPS2 was $0.02. - Adjusted EBITDA3 was $9.2 million in the first quarter compared to $10.2 million; burdened by approximately $1.7 million of global fuel surcharges in this quarter. Balance Sheet Update: Tilray's balance sheet remains strong, supported by cash, restricted cash and marketable securities4 of $221.4 million at the end of the first quarter. This position gives the Company financial flexibility to invest behind strategic growth opportunities, support integration priorities and maintain disciplined capital allocation. Fiscal year to date, Tilray also reduced total outstanding debt by $42 million. Fiscal Year 2027 Guidance For its fiscal year ending May 31, 2027, the Company reaffirms its expectation to achieve adjusted EBITDA3 of $68 million to $75 million, representing double-digit growth as compared to fiscal year 2026. Historically, due to the seasonality of our business, financial results are typically more weighted toward the second half of the fiscal year, with results strengthening significantly in the fourth quarter. Management's guidance for adjusted EBITDA3 is provided on a non-GAAP basis and excludes stock-based compensation; change in fair value of contingent consideration; purchase price accounting step-up; impairments of intangible assets and goodwill; other than temporary change in fair value of convertible notes receivable; litigation costs; integration and restructuring costs; transaction-related costs; and other non-operating income (expenses) and non-recurring items that may be incurred during the Company's fiscal year 2027, which the Company will continue to identify as it reports its future financial results. The Company cannot reconcile its expected adjusted EBITDA3 to net income under "Fiscal Year 2027 Guidance" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time. ____________________________________________________________________________________________________ (1) Net (debt) cash is a non-GAAP financial measure. See "Use of Non-GAAP Measures" below for additional discussion regarding these non-GAAP measures and for a reconciliation of such Non-GAAP Measures to our most comparable GAAP measure. (2) Adjusted net income (loss) and adjusted net income (loss) per share/Adjusted EPS are a non-GAAP financial measure. See "Use of Non-GAAP Measures" below for additional discussion regarding these non-GAAP measures and for a reconciliation of such Non-GAAP Measures to our most comparable GAAP measure. (3) Adjusted EBITDA is a non-GAAP financial measure. See "Use of Non-GAAP Measures" below for additional discussion regarding these non-GAAP measures and for a reconciliation of such Non-GAAP Measures to our most comparable GAAP measure. (4) Cash, restricted cash and Marketable Securities is a non-GAAP financial measure. See "Use of Non-GAAP Measures" below for additional discussion regarding these non-GAAP measures and for a reconciliation of such Non-GAAP Measures to our most comparable GAAP measure. Live Audio Webcast Tilray Brands will host a webcast to discuss these results today at 8:30 AM Eastern Time. Investors may access the live webcast through the Events and Presentations section of Tilray's Investor Relations website, where a replay will also be available and archived. About Tilray Brands Tilray Brands, Inc. ("Tilray") (Nasdaq: TLRY; TSX: TLRY), is a leading global lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment elevating lives through moments of connection. Tilray's mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy and create memorable experiences. Tilray's unprecedented platform supports over 40 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages. For more information on how we are elevating lives through moments of connection, visit Tilray.com and follow @Tilray on all social platforms. Cautionary Statement Concerning Forward-Looking Statements Certain statements in this press release constitute forward-looking information or forward-looking statements (together, "forward-looking statements") under Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the "safe harbor" created by those sections and other applicable laws. Forward-looking statements can be identified by words such as "forecast," "future," "should," "could," "enable," "potential," "contemplate," "believe," "anticipate," "estimate," "plan," "expect," "intend," "position," "may," "project," "will," "would" and the negative of these terms or similar expressions, although not all forward-looking statements contain these identifying words. Certain material factors, estimates, goals, projections or assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this communication. Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the Company's ability to become a leading lifestyle consumer packaged goods company; the Company's ability to become a leading beverage alcohol Company; the Company's ability to achieve long term profitability; the Company's ability to achieve operational scale, market share, distribution, profitability and revenue growth in particular business lines and markets; the Company's ability to successfully achieve revenue growth, margin and profitability improvements, production and supply chain efficiencies, synergies and cost savings; the Company's ability to achieve fiscal year 2027 financial guidance, including expected Adjusted EBITDA3 of $68 to $75 million and synergy optimizations; the Company's expected revenue growth, sales volume, profitability, synergies and accretion related to any of its acquisitions; expected opportunities in the U.S., including upon U.S. federal cannabis legalization or rescheduling and the Company's ability to leverage its platform in connection therewith; the Company's ability to successfully leverage artificial intelligence strategies; the Company's anticipated investments and acquisitions, including in organic and strategic growth, partnership efforts, product offerings and other initiatives; and the Company's ability to commercialize new and innovative products. Many factors could cause actual results, performance or achievement to be materially different from any forward-looking statements, and other risks and uncertainties not presently known to the Company or that the Company deems immaterial could also cause actual results or events to differ materially from those expressed in the forward-looking statements contained herein. For a more detailed discussion of these risks and other factors, see the most recently filed annual information form of the Company and the Annual Report on Form 10-K (and other periodic reports filed with the SEC) of the Company made with the SEC and available on EDGAR. The forward-looking statements included in this communication are made as of the date of this communication and the Company does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Use of Non-U.S. GAAP Financial Measures This press release and the accompanying tables include non-GAAP financial measures, including Adjusted EBITDA3, Adjusted cash operating income (loss), Adjusted net income (loss), Adjusted net income (loss) per share and or ("Adjusted EPS"), free cash flow, adjusted free cash flow, constant currency presentations of revenue, cash, restricted cash and marketable securities, and net (debt) cash. Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company's operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures, nor should adjusted net income (loss) per share be used as a measure of liquidity. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company's Consolidated Statements of Operations and Cash Flows presented in accordance with GAAP. Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include litigation and related expenses, transaction costs, impairments of intangible assets and goodwill, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company's GAAP financial results. The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year. A reconciliation of prior year revenue to constant currency revenue, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release. Adjusted EBITDA3 is calculated as net income (loss) before income tax expense (recovery), net; interest expense, net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; project 420 optimization costs; litigation costs; restructuring costs, and transaction costs, net. A reconciliation of Adjusted EBITDA3 to net income (loss), the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Adjusted cash operating income (loss) is calculated as operating loss, less; amortization; stock-based compensation; and change in fair value of contingent consideration. A reconciliation of adjusted cash operating income (loss) to operating loss, the most directly comparable GAAP measure, has been included below in this press release. Adjusted cash operating income (loss) is not calculated in accordance with GAAP and should not be considered an alternative for GAAP operating income or as a measure of liquidity. Adjusted net income (loss) is calculated as net loss attributable to stockholders of Tilray Brands, Inc., less; non-operating income (expense), net; amortization; deferred income tax expense (benefits), net; stock-based compensation; Accretion of convertible debt discount; change in fair value of contingent consideration; project 420 optimization costs; litigation costs; restructuring costs and transaction costs, net. A reconciliation of Adjusted net income (loss) to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release. Adjusted net income (loss) per share (and or adjusted EPS) is calculated as adjusted net income (loss) divided by weighted average number of common shares outstanding. A reconciliation of Adjusted net income (loss) per share to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release. Adjusted net income (loss) per share is not calculated in accordance with GAAP and should not be considered an alternative for GAAP net income (loss) per share or as a measure of liquidity. Free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net. A reconciliation of net cash flow provided by (used in) operating activities to free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release. Adjusted free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net, and the exclusion of growth CAPEX from investments in capital and intangible assets, net, which excludes the amount of capital expenditures that are considered to be associated with growth of future operations rather than to maintain the existing operations of the Company, and excludes cash paid for litigation settlements. A reconciliation of net cash flow provided by (used in) operating activities to adjusted free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release. Cash, restricted cash and marketable securities are comprised of three GAAP measures, cash and cash equivalents and restricted cash added to marketable securities. The Company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its short-term liquidity position by combining these three GAAP metrics. Net (debt) cash is comprised of GAAP measures and reduces bank indebtedness, current and non-current portions of long-term debt, the principal balance of convertible debt by cash and cash equivalents and marketable securities. The Company believes this metric provides useful information to management, analysts, and investors regarding its liquidity and the Company's ability to repay all of its debt. Contacts: Investor Relations [email protected] [email protected] Media [email protected] The accompanying excerpts of the interim condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. GAAP. Consolidated Statements of Financial Position | | | | August 31, | | May 31, (in thousands of US dollars) | 2026 | | 2026 Assets | | | Current assets | | | Cash and cash equivalents | $ | 214,960 | | | $ | 225,977 | Restricted cash | | 3,383 | | | | 3,365 | Marketable securities | | 3,047 | | | | 5,289 | Accounts receivable, net | | 190,617 | | | | 189,170 | Inventory | | 328,973 | | | | 301,192 | Prepaids and other current assets | | 64,160 | | | | 64,692 | Assets held for sale | | 2,449 | | | | 2,449 | Total current assets | | 807,589 | | | | 792,134 | Capital assets | | 665,923 | | | | 680,225 | Operating lease, right-of-use assets | | 42,030 | | | | 42,318 | Digital assets | | 720 | | | | 674 | Intangible assets | | 42,468 | | | | 42,779 | Goodwill | | 752,350 | | | | 752,350 | Long-term investments | | 6,365 | | | | 6,551 | Other assets | | 10,509 | | | | 10,981 | Total assets | $ | 2,327,954 | | | $ | 2,328,012 | Liabilities | | | Current liabilities | | | Bank indebtedness | $ | 8,688 | | | $ | 8,775 | Accounts payable and accrued liabilities | | 335,415 | | | | 318,088 | Current portion of lease liabilities | | 11,902 | | | | 13,357 | Current portion of long-term debt | | 15,457 | | | | 18,160 | Current portion of convertible debentures payable | | 59,224 | | | | — | Total current liabilities | | 430,686 | | | | 358,380 | Long - term liabilities | | | Lease liabilities | | 158,610 | | | | 158,155 | Long-term debt | | 118,046 | | | | 120,425 | Convertible debentures payable | | — | | | | 79,529 | Deferred tax liabilities, net | | 9,746 | | | | 12,256 | Other liabilities | | 4,192 | | | | 4,400 | Total liabilities | | 721,280 | | | | 733,145 | Stockholders' equity | | | Common stock ($0.0001 par value; 1,416,000,000 common shares authorized; 144,936,074 and 131,683,075 common shares issued and outstanding, respectively) | | 145 | | | | 132 | Treasury Stock (1,124,869 and 589,217 treasury shares issued and outstanding, respectively) | | — | | | | — | Preferred shares ($0.0001 par value; 10,000,000 preferred shares authorized; nil and nil preferred shares issued and outstanding, respectively) | | — | | | | — | Additional paid-in capital | | 6,674,469 | | | | 6,627,056 | Accumulated other comprehensive loss | | (39,492 | ) | | | (44,233 | ) Accumulated deficit | | (5,011,764 | ) | | | (4,968,623 | ) Total Tilray Brands, Inc. stockholders' equity | | 1,623,358 | | | | 1,614,332 | Non-controlling interests | | (16,684 | ) | | | (19,465 | ) Total stockholders' equity | | 1,606,674 | | | | 1,594,867 | Total liabilities and stockholders' equity | $ | 2,327,954 | | | $ | 2,328,012 | | | | Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) | | | | | For the three months ended | | | | | August 31, | | August 31, | | Change | | % Change (in thousands of U.S. dollars, except for per share data) | 2026 | | 2025 | | 2026 vs. 2025 Net revenue | $ | 257,147 | | | $ | 209,501 | | | $ | 47,646 | | | 23 | % Cost of goods sold | | 179,638 | | | | 152,032 | | | | 27,606 | | | 18 | % Gross profit | | 77,509 | | | | 57,469 | | | | 20,040 | | | 35 | % Operating expenses: | | | | | | | General and administrative | | 57,608 | | | | 41,053 | | | | 16,555 | | | 40 | % Selling | | 13,593 | | | | 12,923 | | | | 670 | | | 5 | % Amortization | | 6,500 | | | | 3,929 | | | | 2,571 | | | 65 | % Marketing and promotion | | 15,736 | | | | 10,155 | | | | 5,581 | | | 55 | % Research and development | | 89 | | | | 41 | | | | 48 | | | 117 | % Change in fair value of contingent consideration | | — | | | | (15,000 | ) | | | 15,000 | | | (100 | )% Litigation costs, net of recoveries | | 787 | | | | 1,007 | | | | (220 | ) | | (22 | )% Restructuring costs | | 2,447 | | | | 869 | | | | 1,578 | | | 182 | % Transaction costs, net | | 4,802 | | | | 400 | | | | 4,402 | | | 1101 | % Total operating expenses | | 101,562 | | | | 55,377 | | | | 46,185 | | | 83 | % Operating income (loss) | | (24,053 | ) | | | 2,092 | | | | (26,145 | ) | | (1250 | )% Interest expense, net | | (6,480 | ) | | | (6,696 | ) | | | 216 | | | (3 | )% Non-operating income (expense), net | | (7,773 | ) | | | 3,832 | | | | (11,605 | ) | | (303 | )% (Loss) before income taxes | | (38,306 | ) | | | (772 | ) | | | (37,534 | ) | | 4862 | % Income tax expense (recovery), net | | 1,725 | | | | (2,285 | ) | | | 4,010 | | | (175 | )% Net income (loss) | $ | (40,031 | ) | | $ | 1,513 | | | $ | (41,544 | ) | | (2746 | )% Total net income (loss) attributable to: | | | | | | | Stockholders of Tilray Brands, Inc. | | (43,141 | ) | | | (322 | ) | | | (42,819 | ) | | 13298 | % Non-controlling interests | | 3,110 | | | | 1,835 | | | | 1,275 | | | 69 | % Other comprehensive gain (loss), net of tax | | | | | | | Foreign currency translation gain (loss) | | 4,412 | | | | (188 | ) | | | 4,600 | | | (2447 | )% Comprehensive income (loss) | $ | (35,619 | ) | | $ | 1,325 | | | $ | (36,944 | ) | | (2788 | )% Total comprehensive income (loss) attributable to: | | | | | | | Stockholders of Tilray Brands, Inc. | | (38,400 | ) | | | (489 | ) | | | (37,911 | ) | | 7753 | % Non-controlling interests | | 2,781 | | | | 1,814 | | | | 967 | | | 53 | % Weighted average number of common shares - basic1 | | 133,340,533 | | | | 106,027,190 | | | | 27,313,343 | | | 26 | % Weighted average number of common shares - diluted1 | | 133,340,533 | | | | 106,027,190 | | | | 27,313,343 | | | 26 | % Net loss per share - basic1 | $ | (0.32 | ) | | $ | (0.00 | ) | | $ | (0.32 | ) | | 10553 | % Net loss per share - diluted1 | $ | (0.32 | ) | | $ | (0.00 | ) | | $ | (0.32 | ) | | 10553 | % | | | | | | | 1The prior year share and amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. See Note 1 (Basis of presentation and summary of significant accounting policies) within the Form 10-Q for the period ended August 31, 2026. | | | | | | | Condensed Consolidated Statements of Cash Flows | | | | | | | | For the three months ended | | | | | August 31, | | August 31, | | Change | | % Change (in thousands of US dollars) | 2026 | | 2025 | | 2026 vs. 2025 Cash provided by (used in) operating activities: | | | | | | | Net income (loss) | $ | (40,031 | ) | | $ | 1,513 | | | $ | (41,544 | ) | | (2746 | )% Adjustments for: | | | | | | | Income tax expense (recovery), net | | 1,725 | | | | (2,285 | ) | | | 4,010 | | | (175 | )% Unrealized foreign exchange (gain) loss | | 4,524 | | | | (2,328 | ) | | | 6,852 | | | (294 | )% Amortization | | 18,638 | | | | 15,561 | | | | 3,077 | | | 20 | % Accretion of convertible debt discount | | 1,465 | | | | 1,976 | | | | (511 | ) | | (26 | )% Unrealized (gain) loss on digital assets | | (46 | ) | | | 8 | | | | (54 | ) | | (675 | )% Other non-cash items | | (1,745 | ) | | | 282 | | | | (2,027 | ) | | (719 | )% Stock-based compensation | | 6,584 | | | | 5,052 | | | | 1,532 | | | 30 | % Loss (gain) on long-term investments | | 27 | | | | (39 | ) | | | 66 | | | (169 | )% Loss on derivative instruments | | — | | | | 3,670 | | | | (3,670 | ) | | (100 | )% Change in fair value of contingent consideration | | — | | | | (15,000 | ) | | | 15,000 | | | (100 | )% Change in non-cash working capital: | | | | | | | Accounts receivable | | (1,319 | ) | | | 14,414 | | | | (15,733 | ) | | (109 | )% Prepaids and other current assets | | 1,004 | | | | (7,133 | ) | | | 8,137 | | | (114 | )% Inventory | | (27,781 | ) | | | (11,905 | ) | | | (15,876 | ) | | 133 | % Accounts payable and accrued liabilities | | 20,414 | | | | (5,127 | ) | | | 25,541 | | | (498 | )% Net cash used in operating activities | | (16,541 | ) | | | (1,341 | ) | | | (15,200 | ) | | 1133 | % Cash provided by (used in) investing activities: | | | | | | | Investment in capital and intangible assets | | (11,009 | ) | | | (9,523 | ) | | | (1,486 | ) | | 16 | % Proceeds from disposal of capital and intangible assets | | 101 | | | | 293 | | | | (192 | ) | | (66 | )% Investment in digital assets | | — | | | | (1,000 | ) | | | 1,000 | | | (100 | )% Sale (purchase) of marketable securities, net | | 2,242 | | | | 34,697 | | | | (32,455 | ) | | (94 | )% Proceeds from long-term investments | | 133 | | | | — | | | | 133 | | | NM Business acquisitions, net of cash acquired | | (720 | ) | | | — | | | | (720 | ) | | NM Net cash used in investing activities | | (9,253 | ) | | | 24,467 | | | | (33,720 | ) | | (138 | )% Cash provided by (used in) financing activities: | | | | | | | Share capital issued, net of cash issuance costs | | 22,338 | | | | 22,491 | | | | (153 | ) | | (1 | )% Repayment of long-term debt | | (5,846 | ) | | | (2,653 | ) | | | (3,193 | ) | | 120 | % Repayment of lease liabilities | | (2,438 | ) | | | (994 | ) | | | (1,444 | ) | | 145 | % Net (increase) decrease in bank indebtedness | | (87 | ) | | | 1,004 | | | | (1,091 | ) | | (109 | )% Net cash provided by financing activities | | 13,967 | | | | 19,848 | | | | (5,881 | ) | | (30 | )% Effect of foreign exchange on cash and cash equivalents | | 828 | | | | 188 | | | | 640 | | | 340 | % Net increase (decrease) in cash and cash equivalents | | (10,999 | ) | | | 43,162 | | | | (54,161 | ) | | (125 | )% Cash and cash equivalents, beginning of period | | 229,342 | | | | 221,666 | | | | 7,676 | | | 3 | % Cash and cash equivalents and restricted cash, end of period | $ | 218,343 | | | $ | 264,828 | | | $ | (46,485 | ) | | (18 | )% | | | | | | | Net Revenue by Operating Segment | | | | | | | | For the three months ended | | For the three months ended (In thousands of U.S. dollars) | August 31, 2026 | | % of Total Revenue | | August 31, 2025 | | % of Total Revenue Beverage business | $ | 101,496 | | | 39% | | $ | 55,739 | | | 27% Cannabis business | | 56,109 | | | 22% | | | 64,511 | | | 31% Distribution business | | 84,266 | | | 33% | | | 74,007 | | | 35% Wellness business | | 15,276 | | | 6% | | | 15,244 | | | 7% Total net revenue | $ | 257,147 | | | 100% | | $ | 209,501 | | | 100% | | | | | | | | | | | | | | Net Revenue by Operating Segment in Constant Currency | | | | | | | | | | | | | | For the three months ended | | For the three months ended | August 31, 2026 | | | | August 31, 2025 | | (In thousands of U.S. dollars) | as reported in constant currency | | % of Total Revenue | | as reported in constant currency | | % of Total Revenue Beverage business | $ | 101,777 | | | 39% | | $ | 55,739 | | | 27% Cannabis business | | 56,873 | | | 22% | | | 64,511 | | | 31% Distribution business | | 85,188 | | | 33% | | | 74,007 | | | 35% Wellness business | | 15,433 | | | 6% | | | 15,244 | | | 7% Total net revenue | $ | 259,271 | | | 100% | | $ | 209,501 | | | 100% | | | | | | | | | | | | | | Net Cannabis Revenue by Market Channel | | | | | | | | For the three months ended | | For the three months ended (In thousands of U.S. dollars) | August 31, 2026 | | % of Total Revenue | | August 31, 2025 | | % of Total Revenue Revenue from Canadian medical cannabis | $ | 4,717 | | | 8% | | $ | 6,146 | | | 10% Revenue from Canadian adult-use cannabis | | 53,564 | | | 95% | | | 64,067 | | | 99% Revenue from wholesale cannabis | | 673 | | | 1% | | | 4,155 | | | 6% Revenue from international cannabis | | 16,237 | | | 29% | | | 13,367 | | | 21% Less excise taxes | | (19,082 | ) | | (33)% | | | (23,224 | ) | | (36)% Total | $ | 56,109 | | | 100% | | $ | 64,511 | | | 100% | | | | | | | | | | | | | | Net Cannabis Revenue by Market Channel in Constant Currency | | | | | | | For the three months ended | | For the three months ended | August 31, 2026 | | | | August 31, 2025 | | (In thousands of U.S. dollars) | as reported in constant currency | | % of Total Revenue | | as reported in constant currency | | % of Total Revenue Revenue from Canadian medical cannabis | $ | 4,804 | | | 8% | | $ | 6,146 | | | 10% Revenue from Canadian adult-use cannabis | | 54,575 | | | 96% | | | 64,067 | | | 99% Revenue from wholesale cannabis | | 685 | | | 1% | | | 4,155 | | | 6% Revenue from international cannabis | | 16,252 | | | 29% | | | 13,367 | | | 21% Less excise taxes | | (19,443 | ) | | (34)% | | | (23,224 | ) | | (36)% Total | $ | 56,873 | | | 100% | | $ | 64,511 | | | 100% | | | | | | | Other Financial Information: Key Operating Metrics | | | | For the three months ended | August 31, | | August 31, (in thousands of U.S. dollars) | 2026 | | 2025 Net beverage revenue | $ | 101,496 | | | $ | 55,739 | Net cannabis revenue | | 56,109 | | | | 64,511 | Distribution revenue | | 84,266 | | | | 74,007 | Wellness revenue | | 15,276 | | | | 15,244 | Beverage costs | | 59,489 | | | | 34,413 | Cannabis costs | | 34,087 | | | | 41,241 | Distribution costs | | 75,143 | | | | 66,008 | Wellness costs | | 10,919 | | | | 10,370 | Gross profit | | 77,509 | | | | 57,469 | Beverage gross margin | | 41 | % | | | 38 | % Cannabis gross margin | | 39 | % | | | 36 | % Distribution gross margin | | 11 | % | | | 11 | % Wellness gross margin | | 29 | % | | | 32 | % Adjusted EBITDA | $ | 9,205 | | | $ | 10,181 | Cash and cash equivalents, restricted cash and marketable securities as at the period ended: | | 221,390 | | | | 264,828 | Working capital as at the period ended: | $ | 376,903 | | | $ | 433,508 | | | | Other Financial Information: Gross Margin and Adjusted Gross Margin | | | | | | | | | For the three months ended August 31, 2026 (In thousands of U.S. dollars) | Beverage | | Cannabis | | Distribution | | Wellness | | Total Net revenue | $ | 101,496 | | | $ | 56,109 | | | $ | 84,266 | | | $ | 15,276 | | | $ | 257,147 | Cost of goods sold | | 59,489 | | | | 34,087 | | | | 75,143 | | | | 10,919 | | | | 179,638 | Gross profit | | 42,007 | | | | 22,022 | | | | 9,123 | | | | 4,357 | | | | 77,509 | Gross margin | | 41 | % | | | 39 | % | | | 11 | % | | | 29 | % | | | 30 | % | | | | | | | | | | For the three months ended August 31, 2025 (In thousands of U.S. dollars) | Beverage | | Cannabis | | Distribution | | Wellness | | Total Net revenue | $ | 55,739 | | | $ | 64,511 | | | $ | 74,007 | | | $ | 15,244 | | | $ | 209,501 | Cost of goods sold | | 34,413 | | | | 41,241 | | | | 66,008 | | | | 10,370 | | | | 152,032 | Gross profit | | 21,326 | | | | 23,270 | | | | 7,999 | | | | 4,874 | | | | 57,469 | Gross margin | | 38 | % | | | 36 | % | | | 11 | % | | | 32 | % | | | 27 | % | | | | | | | | | Other Financial Information: Adjusted Earnings Before Interest, Taxes and Amortization | | | | | For the three months ended | | | | | August 31, | | August 31, | | Change | | % Change (In thousands of U.S. dollars) | 2026 | | 2025 | | 2026 vs. 2025 Net income (loss) | $ | (40,031 | ) | | $ | 1,513 | | | $ | (41,544 | ) | | (2746 | )% Income tax expense (recovery), net | | 1,725 | | | | (2,285 | ) | | | 4,010 | | | (175 | )% Interest expense, net | | 6,480 | | | | 6,696 | | | | (216 | ) | | (3 | )% Non-operating expense (income), net | | 7,773 | | | | (3,832 | ) | | | 11,605 | | | (303 | )% Amortization | | 18,638 | | | | 15,561 | | | | 3,077 | | | 20 | % Stock-based compensation | | 6,584 | | | | 5,052 | | | | 1,532 | | | 30 | % Change in fair value of contingent consideration | | — | | | | (15,000 | ) | | | 15,000 | | | (100 | )% Project 420 business optimization | | — | | | | 200 | | | | (200 | ) | | (100 | )% Litigation costs, net of recoveries | | 787 | | | | 1,007 | | | | (220 | ) | | (22 | )% Restructuring costs | | 2,447 | | | | 869 | | | | 1,578 | | | 182 | % Transaction costs, net | | 4,802 | | | | 400 | | | | 4,402 | | | 1101 | % Adjusted EBITDA | $ | 9,205 | | | $ | 10,181 | | | $ | (976 | ) | | (10 | )% | | | | | | | Other Financial Information: Adjusted cash operating income (loss) | | | | | | | | For the three months ended | | | | | August 31, | | August 31, | | Change | | % Change | 2026 | | 2025 | | 2026 vs. 2025 Operating income (loss) | $ | (24,053 | ) | | $ | 2,092 | | | $ | (26,145 | ) | | (1250 | )% Change in fair value of contingent consideration | | — | | | | (15,000 | ) | | | 15,000 | | | (100 | )% Amortization | | 18,638 | | | | 15,561 | | | | 3,077 | | | 20 | % Stock-based compensation | | 6,584 | | | | 5,052 | | | | 1,532 | | | 30 | % Adjusted cash operating income (loss) | $ | 1,169 | | | $ | 7,705 | | | $ | (6,536 | ) | | (85 | )% | | | | | | | Other Financial Information: Adjusted net income (loss) and Adjusted net income (loss) per share ("Adjusted EPS") | | | August 31, | | August 31, | | Change | | % Change | 2026 | | 2025 | | Change Net loss attributable to stockholders of Tilray Brands, Inc. | $ | (43,141 | ) | | $ | (322 | ) | | $ | (42,819 | ) | | 13298 | % Non-operating expense (income), net | | 7,773 | | | | (3,832 | ) | | | 11,605 | | | (303 | )% Amortization | | 18,638 | | | | 15,561 | | | | 3,077 | | | 20 | % Stock-based compensation | | 6,584 | | | | 5,052 | | | | 1,532 | | | 30 | % Deferred income tax expense (benefits), net | | (2,344 | ) | | | (2,537 | ) | | | 193 | | | (8 | )% Accretion of convertible debt discount | | 1,465 | | | | 1,976 | | | | (511 | ) | | (26 | )% Change in fair value of contingent consideration | | — | | | | (15,000 | ) | | | 15,000 | | | (100 | )% Project 420 business optimization | | — | | | | 200 | | | | (200 | ) | | (100 | )% Litigation costs, net of recoveries | | 787 | | | | 1,007 | | | | (220 | ) | | (22 | )% Restructuring costs | | 2,447 | | | | 869 | | | | 1,578 | | | 182 | % Transaction costs, net | | 4,802 | | | | 400 | | | | 4,402 | | | 1101 | % Adjusted net income (loss) | $ | (2,989 | ) | | $ | 3,374 | | | $ | (6,363 | ) | | (189 | )% Adjusted net income (loss) per share - basic and diluted | $ | (0.02 | ) | | $ | 0.03 | | | $ | (0.05 | ) | | (167 | )% | | | | | | | Other Financial Information: Free Cash Flow | | | | | | | | For the three months ended | | | | | August 31, | | August 31, | | Change | | % Change (In thousands of U.S. dollars) | 2026 | | 2025 | | 2026 vs. 2025 Net cash used in operating activities | $ | (16,541 | ) | | $ | (1,341 | ) | | $ | (15,200 | ) | | 1133 | % Less: investments in capital and intangible assets, net | | (10,908 | ) | | | (9,230 | ) | | | (1,678 | ) | | 18 | % Free cash flow | $ | (27,449 | ) | | $ | (10,571 | ) | | $ | (16,878 | ) | | 160 | % Add: growth CAPEX | | 3,025 | | | | 3,009 | | | | 16 | | | 1 | % Add: cash paid for litigation settlements | | 1,000 | | | | 2,804 | | | | (1,804 | ) | | (64 | )% Adjusted free cash flow | $ | (23,424 | ) | | $ | (4,758 | ) | | $ | (18,666 | ) | | 392 | % | | | | | | |

This article first appeared on GuruFocus. - Net Revenue: Record first-quarter revenue of $257.1 million, up 23% year over year from $209.5 million. - Gross Profit: Record first-quarter gross profit of $77.5 million, up 35% year over year. - Gross Margin: Consolidated gross margin expanded approximately 300 basis points to 30%. - Net Loss: Net loss of $40 million, compared with net income of $1.5 million in the prior-year quarter. - Adjusted Net Loss: Approximately $3 million, including roughly $5 million of net cash interest expense. - Adjusted EBITDA: $9.2 million, compared with $10.2 million in the prior-year quarter; fiscal 2027 guidance reaffirmed at $68 million to $75 million. - Cannabis Net Revenue: $56.1 million, compared with $64.5 million in the prior-year quarter. - International Cannabis Revenue: Up 21% year over year to $16.2 million. - Cannabis Gross Margin: Increased approximately 300 basis points year over year to 39% from 36%; cannabis gross profit of $22 million. - Beverage Net Revenue: $101.5 million, up 82% year over year from $55.7 million, including $55.9 million of incremental BrewDog revenue. - Beverage Gross Margin: Expanded approximately 300 basis points to 41%. - Distribution Net Revenue: Up 14% to $84.3 million from $74 million; gross margin consistent at 11%. - Wellness Revenue: $15.3 million, relatively stable. - EMEA Revenue: Increased over 70% year over year (medical cannabis, beverage, and pharmaceutical distribution combined). - Cash Position: Approximately $221 million in cash, restricted cash, and marketable securities. - Debt Reduction: Retired $24 million of principal during the quarter and a further $12 million after quarter-end, leaving $52 million of principal outstanding; more than $42 million of debt settled fiscal year to date. - Warning! GuruFocus has detected 2 Warning Signs with TLRY. - Is TLRY fairly valued? Test your thesis with our free DCF calculator. Release Date: October 08, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Tilray Brands Inc (NASDAQ:TLRY) delivered record first-quarter revenue of $257 million, up 23% year over year, with record first-quarter gross profit and a 300 basis point expansion in gross margin to 30%. - International cannabis revenue grew 21% year over year, with EU-GMP medical cannabis flower volumes up 110% and oil volumes up 150%, driven by strong demand in Germany and the UK. - Beverage revenue surged 82% to $101.5 million, largely due to the BrewDog acquisition, which became profitable in Q1 and is self-financing with no cash injections required. - Tilray Brands Inc (NASDAQ:TLRY) reaffirmed its fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million, citing confidence in its diversified platform and cost controls. - The company strengthened its balance sheet by reducing debt by $24 million in Q1 and an additional $12 million after quarter-end, ending with approximately $221 million in cash, restricted cash, and marketable securities. - Tilray Brands Inc (NASDAQ:TLRY) reported a net loss of $40 million in Q1, compared to net income of $1.5 million in the prior-year quarter, impacted by higher marketing costs and fuel surcharges. - Adjusted EBITDA declined to $9.2 million from $10.2 million in the prior-year quarter, due to $8.8 million of international cannabis price compression and $1.7 million in higher fuel costs. - Canadian adult-use cannabis revenue was affected by planned strain rotations, temporary supply constraints, and the decision to redirect approximately 1 metric ton of inventory to international markets, reducing potential Canadian revenue by $1.1 million. - The legacy US craft beverage business faced challenges, with the Beverage segment declining excluding BrewDog, due to SKU rationalization and brand rationalization amid distributor consolidation. - Wellness segment gross margin compressed due to a one-time organic hemp seed shortage that impacted e-commerce channels, and the segment's revenue remained relatively flat at $15.3 million. Q: Bill Kirk of Roth Capital asked how BrewDog was able to quickly turn years of losses into a profit in Q1, and whether it would stay profitable.A: CEO Irwin Simon credited not being saddled with money-losing bars and pubs, right-sizing headcount, renegotiating or avoiding leases through the administration process, strong cost controls, and shutting down unprofitable operations like the spirits business. He also pointed to a strong summer with the World Cup at BrewDog's open venues and the new marketing campaign reversing double-digit brand declines. He said BrewDog is budgeted for profitability this year, with expansion opportunities in the UK, Australia, the US, and through pub and distribution partnerships abroad. Q: Pablo Zuanic of Zuanic & Associates asked for color on the revenue upside from the Carlsberg partnership, who previously produced or distributed Carlsberg in the US, and what "strengthen and evolve over time" means.A: CEO Irwin Simon said the deal is a profit-sharing venture under which all Carlsberg products will be produced in Tilray's US plants, with Tilray holding distribution, marketing, and selling rights across the US. He highlighted Carlsberg's global scale, innovation, and brewing capabilities as assets Tilray can tap, plus future opportunities for additional innovation, other markets, and Carlsberg distributing Tilray products internationally. He noted Carlsberg wants a bigger foothold in the US, the world's largest beer market. Q: Aaron Grey of Alliance Global Partners asked how Tilray views the international cannabis competitive landscape, given two of the largest players may combine, and how it ensures durable sales growth.A: CEO Irwin Simon said Tilray has ample cultivation capacity in Cantanhede, Portugal and Germany, seven years of international market presence, doctor relationships, and country expansion. He cited CC Pharma's pharmaceutical distribution into 16,000 drugstores as a differentiator, and noted Canada can supply product if needed. He said he is not concerned about a potential combination among competitors. Q: Aaron Grey asked about gross margin evolution in the alcohol segment given distributor consolidation and structural challenges.A: CEO Irwin Simon said Tilray is consolidating from 8-10 breweries down to five or six strategically located, high-capacity facilities, which drives savings on hops, ingredients, and cans. He said the company is consolidating distributors to reduce shipping points, shifting to calling on retailers like Kroger and Walmart directly, and adding national brands Carlsberg and Shock Top. He also flagged future innovation in seltzer, energy drinks, water, and the potential billion-dollar opportunity of selling cannabis or hemp drinks in the US. Q: Bill Kirk asked whether the Canadian adult-use revenue contraction was driven by one-time Q1 decisions or would persist as a deliberate headwind.A: CEO Irwin Simon attributed the decline mainly to seasonal strain transitions and a deliberate focus on margin over volume. He said Canada's growth depends on shifting consumers away from the illicit market, and highlighted pending opportunities to sell cannabis drinks in restaurants, bars, and beer stores in Ontario and other provinces. He noted Tilray pays over CAD100 million in excise tax and that governments are looking to cannabis to replace declining alcohol and American brand sales. Q: Pablo Zuanic asked whether future M&A will focus on cannabis or beverages, given beverages were 54% of gross profit versus 28% for cannabis in Q1.A: CEO Irwin Simon said the two segments are complementary, with shared overhead, cost savings, and infrastructure. He cited cross-selling opportunities in Canada and internationally, where medical cannabis teams can work with the beverage team on partnerships and franchises for BrewDog and American beers in markets like India, Israel, Poland, and Spain. He said scale lets Tilray absorb high insurance, IT, R&D, and quality costs, and that the platform could absorb another $0.5 billion to $1 billion in sales. Q: Brenna Cunnington of ATB Capital Markets asked when Tilray's large EU-GMP cultivation footprint would show through in international sales.A: CEO Irwin Simon said the power of the footprint is already visible, citing the new Masson facility in Gatineau, Quebec, which should become EU-GMP certified within the year, plus over 40 metric tons of capacity in Portugal and 4-5 metric tons in Germany. He said patients and distributors want consistency from a single supplier, and that Tilray is among the lowest-cost producers in Portugal, which is driving margin improvement even amid price compression. Q: Brenna Cunnington asked about the potential for a THC beverage carve-out in the expected fall hemp bill.A: CEO Irwin Simon said he expects another extension beyond December 11, with the new Congress then approving a milligram limit for hemp-derived products. He said the hemp business will not disappear given jobs and farmer interests, and that Tilray is staying in the market with products and can scale quickly depending on the outcome. Q: Ryan Neal of TD Cowen asked what Beverage segment growth would have been excluding BrewDog.A: CEO Irwin Simon said the legacy Beverage business would have been down excluding BrewDog, due to SKU and brand rationalization. Q: Ryan Neal asked about the gross margin compression in Wellness and how margins should trend going forward.A: CFO Carl Merton said the compression was caused by a one-time organic seed shortage affecting the e-commerce business, which led to a slight change in mix. Q: Pablo Zuanic asked about the impact of Germany's July 1 reimbursement changes for extracts and flower.A: CEO Irwin Simon said the majority of Tilray's German business is flower and most patients are cash payers. The reimbursement change affects oils for new patients rather than existing patients, so while there will be some impact, it is not extremely impactful to the business. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management is pivoting the corporate identity from a pure-play cannabis operator to a diversified global consumer brands platform to mitigate regulatory and market-specific risks. - The BrewDog acquisition serves as a strategic blueprint for buying distressed or under-managed assets, stabilizing operations, and leveraging Tilray's global distribution to return them to profitability. - International cannabis growth is being driven by a vertically integrated model in Europe, utilizing low-cost cultivation in Portugal and Germany to offset global price compression. - In Canada, the company is prioritizing margin protection over volume, intentionally redirecting inventory to higher-return international medical markets to optimize capital allocation. - The U.S. beverage strategy is undergoing a structural turnaround, focusing on SKU rationalization and distributor consolidation to improve route-to-market efficiency. - Management attributes the record Q1 revenue to the successful integration of BrewDog and the scale of its pharmaceutical distribution network, CC Pharma, which provides direct access to 16,000 pharmacies. - The multi-year partnership with Carlsberg Group, effective January 2027, is expected to provide immediate scale and premium brand positioning within the U.S. market. - Management expects the second half of fiscal 2027 to be seasonally stronger across beverage, cannabis, and distribution segments, supporting the reaffirmed adjusted EBITDA guidance. - Future growth in Canada is contingent on potential regulatory shifts, specifically the expansion of THC beverages into traditional hospitality and retail channels. - The company plans to expand the BrewDog brand globally through a franchise model and local partnerships in markets like India, Poland, and the Middle East. - Capital allocation will remain focused on reducing the interest burden by retiring debt maturities through 2027 and investing in high-margin innovation like functional beverages. - The $40 million net loss was primarily driven by non-cash and non-recurring items; excluding these, the adjusted net loss was $3 million, including $5 million in net cash interest. - Geopolitical factors led to a $1.7 million increase in fuel surcharges, acting as a discrete headwind to adjusted EBITDA during the quarter. - International cannabis markets experienced $8.8 million in price compression, which was partially mitigated by a 40% reduction in operating and cultivation costs at the Portugal facility. - A temporary organic hemp seed supply shortage impacted the Wellness segment's e-commerce channels, leading to slight margin compression. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management expressed no concern regarding peer mergers, citing their established infrastructure, 6 million square feet of cultivation, and the unique advantage of the CC Pharma distribution network. - The strategy relies on being a low-cost producer with existing doctor relationships and regulatory expertise that new entrants cannot easily replicate. - Profitability was achieved by avoiding unprofitable leases during administration, rightsizing the workforce, and focusing on high-performing hospitality venues during the World Cup. - Management expects BrewDog to remain profitable throughout the fiscal year as they transition from cost-cutting to brand growth via new marketing campaigns. - Tilray is actively consolidating its 18 beer brands and reducing its brewery footprint to 5 or 6 high-capacity, strategically located facilities to capture manufacturing efficiencies. - The company is shifting its go-to-market strategy to include direct calls on major retailers like Walmart and Kroger rather than relying solely on third-party distributors. - Management noted that changes to reimbursement for oil primarily affect new patients, while their core business remains focused on flower for existing cash-paying patients. - The overall impact is expected to be minimal relative to the broader growth in patient demand following German legalization.

Tilray Brands (NASDAQ: TLRY) started out as a marijuana company. When it first came public, investors were enamored of pot stocks and the shares rose dramatically. But the marijuana story didn't live up to investors' elevated expectations, and Tilray's stock, along with the rest of the marijuana sector, plunged. Today, Tilray is taking a different approach, and it is starting to show positive results. But investors appear unwilling to give the stock the benefit of the doubt. Here's what's going on. The big story with Tilray Brands right now really isn't marijuana. What investors really need to pay attention to is management's efforts to add other products to the portfolio, including alcoholic beverages and CBD-infused items. Moreover, Tilray has been focusing heavily on its brands as it seeks to transition into "a global lifestyle and consumer packaged goods company leading at the nexus of the beverage, cannabis, and wellness industries." Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » This is a major corporate overhaul, with Tilray effectively seeking to compete with consumer staples companies. It is a highly competitive industry where scale can be an important differentiator. That's an issue, since Tilray's market cap is a tiny $600 million. Distribution, marketing, research and development all involve material costs. It can be difficult to differentiate a company if its revenues are a rounding error relative to larger peers. And that's very much the case here, considering that Coca-Cola (NYSE: KO) generated $13.4 billion in sales in the second quarter of 2026. That puts Tilray's record fiscal 2026 revenues of $915 million into perspective. Coca-Cola made over 13x that in just a single quarter. While it is true that comparing Tilray to one of the world's largest consumer-staples companies probably isn't fair, it does help to show just how small Tilray really is as a business. The next big issue is that Tilray isn't profitable. Despite record revenues, the company still lost $1.09 per share in fiscal 2026. That was a vast improvement over the $24.56-per-share loss in fiscal 2025, but a tiny, money-losing company in the middle of a business overhaul isn't the type of stock most investors should buy. Tilray is only appropriate for risk takers. That said, it has done a very good job of diversifying its business beyond marijuana. At this point, it also has a significant business in the craft-brew niche, which it recently expanded through the acquisition of BrewDog. Moreover, revenues increased across all its business segments in fiscal 2026, suggesting the company is executing fairly well. Management just has to find a way to turn that success into profits. From a big-picture perspective, Tilray's diversification effort and focus on becoming a consumer-staples brand manager are probably good choices. However, given the history of the marijuana industry and the company's ongoing losses, investors aren't willing to afford the company the benefit of the doubt as it looks to turn itself into a profitable business. That's entirely understandable. At the end of the day, Tilray needs to prove it can be a sustainably profitable business. Record revenues are moving the company in the right direction, as is its effort to diversify. However, until earnings turn positive, most investors are unlikely to buy Tilray stock. So, for now, Tilray remains a business that only the most aggressive investors should buy. But given the changes it is making, it might still be one you want to keep on your watch list, even if you aren't willing to own it right now. 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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy. Tilray Trades Below $5 With Record Fiscal Revenue on the Books. What's Holding the Stock Back? was originally published by The Motley Fool