Mr. Miguel Martin reports

AURORA CANNABIS ANNOUNCES FISCAL 2025 SECOND QUARTER RESULTS

Aurora Cannabis Inc. has released its financial and operational results for the second quarter fiscal 2025.

Highlights:

• Record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) of $10.1-million, a year-over-year (YOY) increase of 210 per cent;
• Quarterly net revenue (1) up 29 per cent YOY to $81.1-million, with 41-per-cent growth in global medical cannabis;
• Reaffirms target of positive free cash flow (1) in the quarter ending Dec. 31, 2024;
• Maintains strong balance sheet with approximately $152-million of cash and a debt-free cannabis business (2).

"Our strong quarterly results demonstrate Aurora's leadership in global medical cannabis and ability to capitalize on opportunities within rapidly growing markets such as Australia, Germany, Poland and the U.K. International revenue increased 93 per cent to $35-million, exceeding Canadian medical revenue for the first time and contributing 57 per cent to total global medical cannabis revenue. The Bevo plant propagation segment also grew a robust 21 per cent during its seasonally lowest quarter, proving the efficacy of our diversified operating model," said chairman and chief executive officer Miguel Martin.

"With two quarters remaining in the fiscal year, we are proud to have delivered record adjusted EBITDA (1), and believe fiscal 2025 is anchored by our commitment to strategic growth, operational excellence and the continued strength of our balance sheet," Mr. Martin concluded.

(1) This news release includes certain non-GAAP (generally accepted accounting principles) financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures.

(2) Aurora's only remaining debt is non-recourse debt of $57.5-million relating to Bevo Farms Ltd. as detailed in the fiscal year (FY) 2025 Q2 (second quarter) financial statements.

Second quarter 2025 highlights

(Unless otherwise stated, comparisons are made between fiscal Q2 2025, Q1 (first quarter) 2025 and Q2 2024 results and are in Canadian dollars.)

Consolidated revenue and adjusted gross profit

Total net revenue (1) was $81.1-million, as compared with $63.1-million in the prior-year period. The 29-per-cent increase from the prior period was mainly due to 41-per-cent growth in the company's global medical cannabis business and 21-per-cent growth in its plant propagation business, slightly offset by lower quarterly revenue in its consumer cannabis business.

Consolidated adjusted gross margin before fair value adjustments (1) was 54 per cent in Q2 2025 and 51 per cent in the prior-year quarter. Adjusted gross profit before fair value (FV) adjustments (1) was $42.6-million in Q2 2025, versus $32.0-million in the prior-year quarter, an increase of 33 per cent.

Medical cannabis

Medical cannabis net revenue (1) was $61.3-million, a 41-per-cent increase from the prior-year quarter, delivering 76 per cent of Aurora's Q2 2025 consolidated net revenue (1) and 98 per cent of adjusted gross profit before fair value adjustments (1).

The increase in net revenue (1) of $17.8-million was primarily due to higher sales to Australia, Germany, Poland and the United Kingdom, and stabilized sales in Canada.

Adjusted gross margin before fair value adjustments (1) on medical cannabis net revenue reached 68 per cent for the three months ended Sept. 30, 2024, compared with 63 per cent in the prior-year quarter. The adjusted gross margins before fair value adjustments improved through sustainable cost reductions, higher selling prices in Australia and improved efficiency in production operations, including sourcing for Europe from Canada.

Consumer cannabis

Aurora's consumer cannabis net revenue (1) was $10.4-million, a 13-per-cent decrease compared with $12-million in the prior-year quarter. The decrease was due to the company's decision to prioritize the supply of its GMP (good manufacturing practice) manufactured products to its high-margin international business rather than the consumer business, which offers lower margins.

Adjusted gross margin before fair value adjustments (1) on consumer cannabis net revenue (1) was 14 per cent, decreasing from 27 per cent compared with the prior-year quarter. The decrease from the prior-year comparative quarter is largely due to higher fixed overhead costs allocated to the consumer channel as a result of lower volumes manufactured for products sold by the channel. The company strategically decided to allocate less internally produced cannabis for the consumer channel in favour of increasing its overall cannabis allocation for both its domestic and international medical channels.

Plant propagation

Plant propagation net revenue (1) wholly comprised the Bevo business and contributed $8.6-million of net revenue (1), a 21-per-cent increase compared with $7.2-million in the prior-year quarter. The increase was a result of organic growth and increased product offerings, both arising from increased capacity.

Adjusted gross margin before fair value adjustments1 on plant propagation revenue was 19 per cent for Q2 2025 and 22 per cent for the prior-year quarter. The fluctuations in the plant propagation adjusted gross margin before fair value adjustments is due to the seasonal timing of lower-margin product revenue and ramp-up of the orchid business.

Selling, general and administrative (SG&A)

Adjusted SG&A (1) was $31.7-million in Q2 2025, which excludes $4.0-million of business transformation costs. The increase compared with the three months ended Sept. 30, 2023, relates to higher freight and logistics costs, notably from sales to Europe with the increase in sourcing from Canada and incremental costs following the acquisition of MedReleaf Australia.

Net income (loss)

Net income from continuing operations for the three months ended Sept. 30, 2024, was $1.7-million compared with a net income of $400,000 for the prior-year period. The increase in net income of $1.2-million compared with the three months ended Sept. 30, 2023, primarily relates to a decrease in other income of $8.4-million and decrease of operating expenses of $700,000, offset by an increase in gross profit of $7.8-million.

Adjusted EBITDA

Adjusted EBITDA (1) increased 210 per cent to $10.1-million for the three months ended Sept. 30, 2024, compared with $3.3-million for the prior-year quarter.

Fiscal Q3 (third quarter) 2025 expectations

In Q3 2025, the company expects to see continued strong net revenue (1) and adjusted gross margins (1) across its global medical cannabis business, supported by net revenue (1) growth in Europe and Australia.

For plant propagation, the company expects to see seasonally reduced net revenues (1) and adjusted gross profit (1) that will be in line with historical seasonal trends as 25 per cent to 35 per cent of revenues are normally earned in the second half of a calendar year.

Positive adjusted EBITDA (1) is expected to continue, while free cash flow (1) is projected to be positive due to strong net revenue (1) and continued spend discipline, resulting in strong adjusted gross margins.

Conference call

Aurora will host a conference call today, Wednesday, Nov. 6, 2024, to discuss these results. Mr. Martin and Simona King, 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.

Date:  Wednesday, Nov. 6, 2024

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

Webcast:  A webcast will be available on the company's website.

About Aurora Cannabis Inc.

Aurora is opening the world to cannabis, serving both the medical and consumer markets across Canada, Europe, Australia and South America. 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 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, IndiMed and CraftPlant. Aurora also has a controlling interest in Bevo Farms, 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, wellness and adult recreational markets wherever they are launched.

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

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