SNDL - Tilray spikes as bottom line improves amid Q4 revenue beat

2023-07-26 08:00:07 ET

Canadian cannabis player Tilray Brands ( NASDAQ: TLRY ) traded ~10% higher pre-market Wednesday after its Q4 results for fiscal 2023 exceeded expectations thanks to a solid revenue beat and a decline in net loss.

Tilray ( TLRY ), which acquired its Canadian rival HEXO ( HEXO ) in June, reported $184M in revenue for the quarter, with ~20% YoY growth as its major business segments grew revenue by ~$10M from the prior-year period.

"The recent closing of the HEXO transaction has boosted our competitive positioning in Canada, the largest federally legalized cannabis market in the world," CEO Irwin Simon noted as the company's market share improved to ~13% following the acquisition.

TLRY’s cannabis, beverage alcohol, and distribution businesses brought $67M, $64M, and $32.4M in net revenue during the period, reflecting ~21% YoY, ~43% YoY, and ~19% YoY growth, respectively.

While gross margin improved to 37% during the quarter from -4% in the prior-year period, the annualized run-rate savings from the company’s $30M cost optimization plan reached ~22M during FY23.

However, during the quarter, TLRY narrowed its loss by ~74% YoY to $120M, while its adj. EBITDA for the period grew ~93% YoY to $22M.

Despite ~20% YoY growth for the quarter, the company’s full-year revenue remained mostly unchanged at $627M while net loss rose over threefold to $1.4B and adj. EBITDA rose ~28% YoY to $61M.

For fiscal 2024, Tilray ( TLRY ) projects $68M–$78M in adj. EBITDA, indicating 11%–27% YoY growth with positive adj. free cash flow.

Shares of Tilray’s ( TLRY ) Canadian peers, Canopy Growth ( CGC ), Cronos ( CRON ), Aurora Cannabis ( ACB ), Sundial Growers ( SNDL ) and OrganiGram ( OGI ) will be in focus given the company’s strong Q1 performance.

More on Tilray

• Hexo extends slide as Tilray deal closure nears
• Tilray Could Break $1
• Tilray: New Low On Debt Offering
• Tilray Brands: A Costly And Painful Move

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