Aurora Cannabis Reports Q1 FY2026 Financial Results

EDMONTON – Aurora Cannabis Inc. (ACB), a leading Canadian Cannabis producer, announced its financial and operational results for the first quarter of fiscal 2026, ending June 30, 2025, showcasing robust growth in its medical Cannabis segment alongside challenges at its Bevo Agtech subsidiary.

The company reported a 17% year-over-year increase in net revenue to $98 million, driven by a strategic focus on high-margin medical Cannabis, though profitability was tempered by a 35% quarter-over-quarter decline in adjusted EBITDA and covenant breaches at Bevo.

Aurora’s global medical Cannabis net revenue surged 37% year-over-year to $64.8 million, with international markets, particularly Germany and Poland, leading the charge with an 85% increase to $37.1 million. This growth, fueled by regulatory reforms in Germany and strong demand in Australia, contributed 57% to the medical Cannabis segment’s revenue, with an adjusted gross margin of 69%. The consumer Cannabis segment saw a 32% revenue decline to $7.9 million as Aurora prioritized medical markets, though its adjusted gross margin improved to 33% from 20% due to optimized product mix and operational efficiencies.

The company generated $9.2 million in positive free cash flow, a 42% increase from $6.5 million in the prior-year quarter, reflecting higher revenue, improved margins, and reduced capital expenditures. Adjusted EBITDA grew 209% year-over-year to $10.8 million, driven by strong gross profit growth, though it fell 35% from the prior quarter due to seasonal weakness in the plant propagation business and a $1.6 million inventory write-off at Bevo. Aurora’s balance sheet remains robust, with $186 million in cash and a debt-free Cannabis operation, providing financial flexibility.

Bevo, Aurora’s 50.1%-controlled plant propagation subsidiary, contributed $23.9 million in revenue but faced significant challenges. A quality issue and surplus crops led to the inventory write-off, reducing Bevo’s adjusted gross margin to 6% from 18%. More critically, Bevo breached its fixed charge coverage ratio covenant as of June 30, 2025, and a non-financial covenant post-quarter by failing to provide audited financial statements. This triggered the reclassification of $59.8 million in term loans and a $16.4 million revolver to current liabilities, raising concerns about liquidity and future capital access. Aurora is in discussions for a waiver, but the outcome remains uncertain. Additionally, adjusted selling, general, and administrative expenses rose 19% to $37.4 million, driven by higher freight costs for European sales and Bevo’s operational ramp-up.

Despite a 5.43% premarket stock decline to $4.35 on August 6, 2025, Aurora outperformed revenue expectations of $70.33 million. Looking ahead, the company projects 8-12% growth in medical Cannabis revenue for Q2 2026, with continued positive free cash flow, though significant cash outflows may impact Q2 results. Investors will likely monitor waiver negotiations and Q2 cash flow closely, as these factors could shape Aurora’s trajectory in a competitive global market.