Mr. Miguel Martin reports

AURORA CANNABIS ANNOUNCES FISCAL 2024 SECOND QUARTER RESULTS AND DELIVERS RECORD POSITIVE ADJUSTED EBITDA

Aurora Cannabis Inc. today released its financial and operational results for the second quarter of fiscal year 2024. As the fiscal year 2023 consisted of three quarters, the year-over-year comparison quarter for Q2 2024 ending Sept. 30, 2023, is Q1 2023 ending Sept. 30, 2022.

"This is our strongest fiscal year to date, led by robust net revenue growth in our high-margin medical cannabis segment, coupled with positive adjusted EBITDA for the fourth consecutive quarter," stated Miguel Martin, chief executive officer of Aurora. "We are experiencing the benefits of diversification across our cannabis and non-cannabis platforms characterized by stability in Canada, record revenue in Europe and Australia, and early success with our most recent acquisition, Bevo Farms."

Mr. Martin continued: "We are also proceeding with capturing $40-million in annualized cost efficiencies during fiscal 2024, in addition to the approximate $400-million savings we delivered over the last three years. By executing on our plan to deliver top-line growth and increased profitability, we are moving closer to reaching our target of positive free cash flow in calendar year 2024."

Mr. Martin added: "Our balance sheet is in a strong net cash position to pursue profitable growth opportunities through M&A, and we will repay the remainder of our $5.3-million (U.S.) of convertible senior notes in February, 2024. The combination of industry-leading margins, a strong balance sheet and a proven track record of execution point to Aurora's best days laying squarely ahead."

Second quarter 2024 highlights

(Unless otherwise stated, comparisons are made between fiscal Q2 2024, Q1 2024 and Q1 2023 results, and are in Canadian dollars.)

Consolidated revenue and adjusted gross profit

Total net revenue was $63.4-million, as compared with $48.6-million in the prior-year period. The increase from the prior period is mainly due to growth in the company's global medical cannabis business and quarterly revenue in the company's plant propagation business.

Excluding the impact of the non-core bulk wholesale, adjusted gross margin before fair value adjustments on cannabis net revenue for Q2 2024 remained strong and steady, and well above the industry average at 55 per cent.

Consolidated adjusted gross margin before fair value adjustments was 51 per cent in Q2 2024 (Q1 2023: 51 per cent). Adjusted gross profit before FV adjustments was $32.1-million in Q2 2024 (Q1 2023: $24.3-million), an increase of 32 per cent.

Medical cannabis

Medical cannabis net revenue was $43.8-million, a 42-per-cent increase from the prior-year quarter, delivering 69 per cent of Aurora's Q2 2024 consolidated net revenue and 85 per cent of adjusted gross profit before fair value adjustments.

The increase in net revenue of $12.8-million was primarily due to growth in the company's European business, which benefited from the introduction of new proprietary high-potency cultivars, and higher volumes sold to Australia, a key export market for the company.

Adjusted gross margin before fair value adjustments on medical cannabis net revenue remained strong at 63 per cent for the three months ended Sept. 30, 2023, as compared with 68 per cent in the prior-year period and within the company's target range of 60 per cent and above. The continuing positive impact of Aurora's new higher-yielding, higher-potency cultivars, in addition to the decision to close the company's Nordic facility and supply the European markets from Aurora's EU-GMP (European Union good manufacturing practice) facilities in Canada, are expected to further improve margins for the company's medical business through the remainder of this fiscal year.

Consumer cannabis

Aurora's consumer cannabis net revenue was $12.0-million, compared with $13.7-million in the prior-year quarter. The change is partially due to the exit from the U.S. CBD business, as well as a refocus on supporting premium categories and the timing of new innovation launches.

Adjusted gross margin before fair value adjustments on consumer cannabis net revenue was 27 per cent, increasing by 2 per cent compared with the prior-year quarter. The sequential increase is largely due to higher efficiency in production operations and product sales with higher margins relative to the comparative prior periods.

Plant propagation

Plant propagation net revenue was wholly comprised from the Bevo business, contributing $7.2-million of net revenue. The seasonality of the current Bevo business delivers 65 to 75 per cent of its annual revenues in the first half of a calendar year as orders are fulfilled.

Adjusted gross margin before fair value adjustments on plant propagation revenue was 22 per cent for the Q2 2024 period.

Selling, general and administrative (SG&A)

Adjusted SG&A was $27.7-million in Q2 2024, which excludes $7.6-million of restructuring, non-recurring and out-of-period costs. Adjusted SG&A continues to be well controlled and in line with the company's current target of $30-million.

Adjusted R&D (research and development), was $900,000 in Q2 2024, which is relatively consistent as compared with the prior-year quarter.

Net income/loss

Net income from continuing operations for the three months ended Sept. 30, 2023, was $300,000 compared with a net loss of $45.5-million for the same period in the prior year. The decrease in net loss of $45.7-million from the comparative prior-year quarter was primarily attributable to an increase in gross profit of $33.5-million, an increase in other income of $19.1-million, and a decrease in G&A expense of $6.1-million.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)

Adjusted EBITDA was $3.4-million for the three months ended Sept. 30, 2023, as compared with a loss of $6.2-million in the prior-year quarter. The significant improvement in adjusted EBITDA is primarily attributable to higher adjusted gross profits before fair value adjustments of $7.7-million, and reduction in adjusted SG&A and R&D expenses of $2.1-million.

Fiscal Q3 2024 expectations

In Q3 fiscal 2024

• The company expects cannabis net revenue to be largely similar to fiscal Q2 2024, with the geographical mix slightly weighted further toward the international medical segment.
• For plant propagation, the company expects to see seasonally reduced revenues and gross profit in fiscal Q3 2024 that will be consistent with fiscal Q2 2024 and in line with historical performance.

Aurora's achievement of significant and sustainable operating cost and SG&A reductions has now resulted in four consecutive quarters with positive adjusted EBITDA. This has paved the path toward positive free cash flow in calendar year 2024.

During the three months ended Sept. 30, 2023, the company settled approximately $41.2-million (U.S.) $30.5-million) aggregate principal amount of convertible senior notes, with the issuance of 53,901,522 common shares.

Subsequent to Sept. 30, 2023, the company repurchased approximately $23.1-million ($17.0-million (U.S.)) aggregate principal amount of convertible senior notes, for aggregate consideration, including accrued interest, of approximately $23.2-million ($17.1-million (U.S.)). The remaining convertible debenture balance as of the date hereof is approximately $7.3-million ($5.3-million (U.S.)) and is expected to be settled at or prior to maturity.

Conference call

Aurora will host a conference call today, Thursday, Nov. 9, 2023, to discuss these results. Miguel Martin, chief executive officer, and Glen Ibbott, chief financial officer, will host the call starting at 5 p.m. Eastern Time/3 p.m. Mountain Time. A question and answer session will follow management's presentation.

Conference call details

Date:  Thursday, Nov. 9, 2023

Time:  5 p.m. Eastern Time/3 p.m. Mountain Time

This weblink has also been posted to the company's investor info link on the company website under events.

About Aurora Cannabis Inc.

Aurora Cannabis is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alta., Aurora Cannabis is a pioneer in global cannabis, dedicated to helping people improve their lives. The company's adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, Tasty's, Whistler, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co., as well as international brands, Pedanios, Bidiol and CraftPlant. Aurora Cannabis also has a controlling interest in Bevo Farms Ltd., North America's leading supplier of propagated agricultural plants. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora Cannabis's brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched.

Aurora Cannabis's common shares trade on the Nasdaq and the Toronto Stock Exchange under the symbol ACB.

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