Last week, Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) reported second quarter financial results and received a mixed reaction from the market.
Although Aurora Cannabis issued several positive updates from the quarter, the cannabis sector has recently come under pressure and we believe this impacted the company.
Today, we have highlighted 4 key takeaways from Aurora Cannabis’ earnings report and believe our readers should be aware of these developments:
- During the quarter, Aurora Cannabis recorded a $67.2 million net loss on $61.7 million of revenue. When compared to the same period last year, the company recorded a larger net loss and higher revenues. The management team attributed the higher revenue to growth across all cannabis business segments and a full quarter contribution of $6.6 million from Bevo (which was acquired in August 2022). The company attributed the higher net loss to a larger gross loss and an impairment of property, plant and equipment.
- International markets are starting to have a larger impact on Aurora Cannabis’ business and we are favorable on this aspect of the story. Although total medical cannabis sales in Canada declined on a year-over-year basis, international markets were a bright spot for the company. During the quarter, the company recorded an increase in net medical cannabis revenue from international markets and attributed the growth to international export markets such as Australia, Poland, the United Kingdom (UK), and Cayman Islands.
- Adjusted EBITDA is a key metric for Aurora Cannabis as the management team is highly focused on becoming a profitable business. During the quarter, the company recorded $1.4 million of positive Adjusted EBITDA1. During the prior quarter, Aurora Cannabis recorded an Adjusted EBITDA loss of $7.4 million. The management team attributes the improvement to lower selling, general and administrative (SG&A) expenses and this is a metric that we are highly focused on.
- According to the management team, Aurora Cannabis has one of the strongest balance sheets in the Canadian cannabis industry. As of February 8th, the company reported to have approximately $310 million of cash, including $65 million of restricted cash. Aurora Cannabis is highly focused on raising capital and we consider this to be an important aspect of the story
During the last year, Aurora Cannabis has been under considerable pressure and we continue to have a cautiously optimistic outlook on the business. Although we are favorable on the company reporting positive adjusted EBITDA, the business needs to be able to consistently generate a profit. Going forward, we want to see if Aurora Cannabis can continue to report positive adjusted EBITDA and our readers should keep an eye on this metric.
If you are interested in learning more about Aurora Cannabis, please send an email to email@example.com with the subject “Aurora Cannabis Earnings Highlights” to be added to our distribution list.
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