Mr. Miguel Martin reports

AURORA CANNABIS ANNOUNCES FISCAL 2024 THIRD QUARTER RESULTS; GENERATES RECORD ADJUSTED EBITDA OF $4.3 MILLION

Aurora Cannabis Inc. has released its financial and operational results for the third quarter of fiscal year 2024. As the fiscal year 2023 consisted of three quarters, the year-over-year comparison quarter for Q3 2024 ending Dec. 31, 2023, is Q2 2023 ended Dec. 31, 2022.

In a separate press release issued today before the markets opened, Aurora also announced that a wholly owned subsidiary of the company has acquired the remaining approximately 90-per-cent equity interest of Indica Industries Pty. Ltd. (MedReleaf Australia). MedReleaf Australia has been a strategic partner of Aurora since 2017 and holds the No. 2 position in the rapidly growing approximately $400-million (Australian) Australian medical cannabis market.

"Fiscal 2024 is on track to be our strongest to date, driven by the continued strength of our differentiated business model and our focus on profitable global medical cannabis markets. Our international medical net revenue grew 41 per cent year over year in Q3, demonstrating Aurora's ability to meet diverse patient needs in markets across the world," stated Miguel Martin, chief executive officer of Aurora.

Mr. Martin added: "The acquisition of MedReleaf Australia will make Aurora the largest global medical cannabis company in nationally legal markets and will allow us to leverage our success in providing pharmaceutical-grade cannabis across 15 countries. MedReleaf Australia is expected to be immediately accretive to adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] while accelerating our path to generate positive free cash flow this calendar year."

Mr. Martin continued: "Q3 marks our fifth consecutive quarter of positive adjusted EBITDA, driven by consistent performance in our Canadian business and substantial revenue growth internationally. We are now on the cusp of achieving positive adjusted EBITDA on an annualized basis for the first time in fiscal 2024, a critical milestone for us, supported by our previously announced goal of realizing $40-million in annualized cost-efficiencies by the end of the fiscal year."

Third quarter 2024 highlights (unless otherwise stated, comparisons are made between fiscal Q3 2024, Q2 2024 and Q2 2023 results)

Consolidated revenue and adjusted gross profit

Total net revenue was $64.4-million, as compared with $61.1-million in the prior-year period. The increase from the prior-year period is mainly due to growth in the company's global medical cannabis business and higher quarterly revenue in the company's plant propagation business, partially offset by a decline in the company's consumer cannabis net revenue.

Consolidated adjusted gross margin before fair-value adjustments was 50 per cent in Q3 2024 compared with 46 per cent in the prior-year quarter. Adjusted gross profit before fair-value adjustments was $32.4-million in Q3 2024 (versus $28-million in the prior-year quarter, an increase of 15.7 per cent).

Medical cannabis

Medical cannabis net revenue was $45.1-million, a 16-per-cent increase from the prior-year quarter, delivering 70 per cent of Aurora's Q3 2024 consolidated net revenue and 86 per cent of adjusted gross profit before fair-value adjustments.

The increase in net revenue of $6.2-million was primarily due to higher sales to Australia and Europe in the current period following the success of newly launched innovative cultivars in these markets.

Adjusted gross margin before fair-value adjustments on medical cannabis net revenue remained strong at 62 per cent for the three months ended Dec. 31, 2023, compared with 63 per cent in the prior-year quarter and within the company's target range of 60 per cent and above. The adjusted gross margins before fair-value adjustments held steady through sustainable cost reductions and improved efficiency in production operations with a partial shift to supplying Europe from Canada as the impact of closing the company's Nordic production facility begins to flow through, partially offset by slightly higher mix toward the international export market, which averages a slightly lower adjusted gross margin before fair-value adjustments than the Canadian and European Union medical markets.

Consumer cannabis

Aurora's consumer cannabis net revenue was $11.6-million, compared with $14.6-million in the prior-year quarter. The decrease was due to the decision to allocate product to higher-margin markets.

Adjusted gross margin before fair-value adjustments on consumer cannabis net revenue was 26 per cent, increasing from 20 per cent compared with the prior-year quarter. The increase from the prior-year comparative quarter 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 wholly comprised the Bevo business, contributing $7.3-million of net revenue compared with $6.6-million in the prior-year quarter. Historically, approximately 65 per cent to 75 per cent of plant propagation revenue and up to 80 per cent of EBITDA have been earned in the first half of the calendar year.

Adjusted gross margin before fair-value adjustments on plant propagation revenue was 18 per cent for the Q3 2024 period and 15 per cent for the prior-year quarter, due to the seasonality of the business and sales mix of vegetables and ornamental plants.

Selling, general and administrative expenses (SG&A)

Adjusted SG&A was $27.5-million in Q3 2024, which excludes $6.8-million of restructuring and non-recurring 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 expenses) was $800,000 in Q3 2024, which is relatively consistent as compared with the prior-year quarter.

Net loss

Net loss from continuing operations for the three months ended Dec. 31, 2023, was $25.2-million, compared with net loss of $62.4-million for the same period in the prior year. The decrease in net loss of $37.2-million compared with the same period in the prior year is primarily due to an increase in gross profit of $32.7-million, a decrease in operating expenses of $10.4-million, offset with an increase in other expenses of $5.9-million.

Adjusted EBITDA

Adjusted EBITDA was $4.3-million for the three months ended Dec. 31, 2023, as compared with $3-million in the prior-year quarter.

Fiscal Q4 2024 expectations:

• In fiscal Q4 2024, the company expects revenue from Canadian medical and consumer segments to be steady quarter over quarter while Europe and Australia should provide modest growth in their regions.
• For plant propagation, the company expects to see seasonally higher revenues and gross profit that should be in line with historical performance in the comparable prior-year period.
• Revenue increases, combined with continuing cost control, are expected to result in continued positive adjusted EBITDA in Q4 2024.

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

During the three months ended Dec. 31, 2023, the company repurchased approximately $23.1-million ($17-million (U.S.)) in principal amount of convertible debentures at a 0.08-per-cent average discount to par value for total approximate consideration of $23.2-million ($17.1-million (U.S.)), including accrued interest of approximately $100,000 ($100,000 (U.S.)). The remaining convertible debenture balance as of the date hereof is approximately $7.3-million ($5.3-million (U.S.)) and will be settled in cash at maturity in late February, 2024, at which point Aurora's cannabis business will be debt-free.

Conference call

Aurora will host a conference call today, Thursday, Feb. 8, 2024, to discuss these results. Mr. Martin, chief executive officer, and Glen Ibbott, chief financial officer, will host the call starting at 8 a.m. Eastern Time (6 a.m. Mountain Time). A question-and-answer session will follow management's presentation.

Conference call details

Date:   Thursday, Feb. 8, 2024

Time:   8 a.m. Eastern Time (6 a.m. Mountain Time)

A link to the webcast has also been posted to the company's website in the investors section under "Events."

About Aurora Cannabis Inc.

Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alta., Aurora 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, 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 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's brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched.

Aurora's common shares trade on Nasdaq and the Toronto Stock Exchange under the symbol ACB, and the company is a constituent of the S&P/TSX Composite Index.

We seek Safe Harbor.