Tilray Brands Q1 2027 Earnings Call Transcript

Tilray Brands (NASDAQ: TLRY ) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Tilray Brands reported record Q1 2027 revenue of $257 million, up 23% year over year, with increased gross profit and margin expansion. The company's strategic focus is on building a diversified global business with category leadership in cannabis, beverage, wellness, and pharmaceutical distribution, leveraging both organic growth and strategic acquisitions. International cannabis operations saw significant growth, with EMEA revenues increasing over 70% and Tilray expanding its market presence in Europe and beyond.

Tilray's acquisition of BrewDog has transformed its beverage business, contributing to an 82% year-over-year increase in beverage revenue and achieving profitability in Q1. The company reaffirmed its fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million, despite industry headwinds and geopolitical challenges. Tilray's management highlighted its strong infrastructure and strategic partnerships, including with Carlsberg, to enhance its beverage segment and leverage international growth opportunities. In Canada, Tilray emphasized its leadership in the THC beverage market and the potential for legal cannabis beverages to drive growth.

Management remains optimistic about future opportunities, including potential cannabis reform in the US and the expansion of THC beverages. Tilray ended the quarter with $221 million in cash and marketable securities, continuing to reduce debt and focus on strengthening its balance sheet. Full Transcript OPERATOR Tilray Brands' financial results for the first quarter 2027 ended August 31, 2026. All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer session for analysts conducted via audio. I'll now turn the call over to Ms. Berrin Noorata, Tilray Brands' Chief Communications and Corporate Affairs Officer. Thank you.

You may now begin. Berrin Noorata, Chief Communications and Corporate Affairs Officer Thank you, operator, and good morning, everyone. com and has been filed with the SEC and SEDAR. Please note that during today's call we will be referring to various non-GAAP financial measures that can provide useful information for investors.

However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. In addition, we will be making numerous forward-looking statements during our remarks and in response to your questions. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties, which may prove to be incorrect.

Actual results could differ materially from those described in those forward-looking statements. The text in our earnings press release includes many of the risks and uncertainties associated with such forward-looking statements. Today we will be hearing from key members of our senior leadership team, beginning with Irwin Simon, Chairman and Chief Executive Officer, who will provide opening remarks and commentary, followed by Carl Merton, Chief Financial Officer, who will review our financial results for the first quarter 2027. And now I'd like to turn the call over to Tilray Brands' Chairman and CEO, Irwin Simon.

Irwin D. Simon — Chairman of the Board & CEO Thank you, Berrin, and good morning, everyone. Before I discuss the quarter, I want to frame how investors should think about Tilray Brands. Today we're building a larger, more diversified global business with multiple engines of growth, category leadership across cannabis, beverage, wellness and pharmaceutical distribution, and a clear focus on converting that platform into stronger margins, cash generation and long-term shareholder value.

Tilray is not a single-category company, and we're not dependent upon one market, one regulatory catalyst or one product cycle. That matters for shareholders because diversification gives us more ways to grow, more ways to manage risk and more opportunities to create value as consumer cannabis, beverage, wellness and pharmaceutical distribution markets evolve around the world. 2 billion global business today, reflecting our ability to identify opportunities, acquire strategically, integrate assets and build platforms with greater reach. We are not done.

We will continue to grow Tilray organically and through focused M&A, using our infrastructure, operating capabilities and brand-building expertise to create more value from the assets that we acquire. Today, Tilray operates from a position of global scale and category leadership that few companies in our categories can replicate. We believe we're the world's largest cannabis grower with more than 6 million square feet of cultivation capacity and a leading low-cost production base. We are a market leader in the largest federally legal cannabis markets, including Canada and across Europe.

We're the number one craft beer supplier in the UK and the fourth-largest total beer category supplier in the UK grocery market, the fourth-largest craft brewer in the United States and a global leader in hemp foods, beverage and wellness. Overall, we operate nearly 40 hospitality venues, including pubs, bars and hotels, that showcase our beers and beverages, deepen consumer engagement and give Tilray a differentiation platform to bring our brands to life in markets around the world. In the US, consumers can find Tilray products in almost every major supermarket, and our beer is now available on tap in approximately 28,000 on-premise accounts. Go try one.

This scale matters because it gives Tilray the infrastructure and commercial network to buy attractive assets, integrate them effectively, improve how they run and expand their distribution, and make them stronger and more profitable businesses. With BrewDog, Tilray did more than acquire a beer company. We acquired one of the world's most recognized craft beer brands, a passionate global consumer community, a scaled hospitality footprint and a powerful platform for international beverage growth. For shareholders, BrewDog is a clear example of our acquisition strategy in action.

We can buy a valuable brand, stabilize the business, return it to profitability, reinvest behind growth and use Tilray's global platform to expand its reach globally. Investors should also understand the cadence of our business. Not every quarter will look the same because parts of our portfolio are seasonal and our fiscal year is more heavily weighted to the second half across beverage, cannabis and distribution. What matters is where we are going.

Tilray is becoming larger, more diversified and more globally recognized with multiple levers to drive growth, expand margins and improve profitability over time. In the US, we continue to believe cannabis reform will create significant opportunities over time, and when it does, Tilray is prepared to act from a position of strength. But our strategy is not dependent upon one regulatory event. Delays in rescheduling have impacted sentiment towards cannabis stocks, including ours, and we believe the market too often evaluates Tilray as if we are just a pure-play US cannabis operator, but we are not.

Tilray is a global diversified business with established positions in cannabis, beverage, wellness and pharmaceutical distribution, and we will continue to grow with or without a single regulatory outcome. In Q1 we delivered record revenue of $257 million, up 23% year over year, and a record first-quarter gross profit. We also expanded gross margin year over year, demonstrating that Tilray is not only getting larger but also building a stronger financial profile. That progress reinforces our confidence as we move into the seasonally stronger second half of our fiscal year, and we're maintaining our adjusted EBITDA guidance for the year.

Turning to international, this is one of Tilray's most important growth engines and one of the clearest examples of why our global platform matters. In Q1, EMEA revenues, including medical cannabis, beverage and pharmaceutical distribution combined, increased over 70%, reflecting momentum across our markets where Tilray already has infrastructure, regulatory expertise and commercial reach. International cannabis revenue grew 21% year over year, while EU-GMP medical cannabis shipments accelerated, with flower volumes up 110% and oil volumes up 150% year over year.

This is where Tilray is built to lead: regulated markets where demand is growing, standards are high and operating expertise matters, including scale, low cost and quality. The leadership is backed by a vertically integrated global cannabis supply chain that gives Tilray control across cultivation, production, distribution and patient access. Approximately 90% of our international cannabis supply comes from our Portugal facility, which anchors our European cannabis operations and is one of the most strategic assets in our global network.

Together with low-cost production in Canada, EU-GMP capabilities in Portugal and Germany, pharmaceutical distribution through CC Pharma, direct patient access through LYPHE in the UK and a proprietary genetics bank, Tilray has built an end-to-end cannabis operating model designed to compete and win across regulated medical markets. Our strategy is to leverage global scale, regulatory expertise and our patient access model to capture growing demand, improve product mix and drive greater profitability as these markets scale.

Europe has become one of Tilray's most important growth markets, with opportunities across Germany, Poland, the UK and Italy, and our international opportunities extend beyond Europe. We are also expanding in Australia and New Zealand, creating additional pathways to scale our medical cannabis business and capture growing patient demand. In the UK, LYPHE gives Tilray a powerful strategic advantage: direct access to patients. We are focused on improving and shortening the patient journey, doubling LYPHE's patient base and scaling Tilray medical products through an integrated pharmaceutical distribution network across Europe.

We continue to strengthen the economics and performance of our medical cannabis operation. In Portugal, we reduced our operating and cultivation costs by approximately 40% while improving strains, process and potency. We believe Portugal is now among the lowest-cost cannabis producers in Europe, and we expect this facility to deliver more than 40 metric tons of flower at full capacity in our fiscal year 2027. In Germany, Aphria RX is operating at 100% capacity.

Portugal and Germany, combined with our low-cost production position in Canada, give Tilray one of the strongest global cannabis operating models in the industry. With this scale, we have the cost structure, quality standards and operating discipline to compete and win across regulated medical cannabis markets. And importantly, our advantage extends well beyond cultivation. CC Pharma provides Tilray with pharmaceutical distribution infrastructure, commercial relationships and market access in one of Europe's most important regulated medical markets.

With distribution to over 16,000 pharmacies, CC Pharma is more than a growing distribution business. It is a strategic connector across pharmaceutical distribution, medical cannabis and patient access in Europe, strengthening our competitive position and creating additional avenues for profitable growth. In Canada, Tilray is built to gain share and strengthen profitability through scale, low-cost cultivation, low-cost processing operations and focused commercial management. Our scaled cultivation operation gives us a meaningful advantage, particularly as we come out of the summer transition to new cultivars.

These strains are improving yields, lowering costs and giving consumers the potency and terpene profiles they expect. Even with inflation in cannabis input costs, we have continued to reduce cost per gram and improve our margins. We're harvesting these cultivars now across our network, and we expect to see a larger impact late in Q2 and beyond. This cost leadership, together with our brand portfolio and sharper market focus, gives us a clear path to gain share in Canada while protecting profitability.

It also positions us well as the market evolves beyond traditional cannabis formats into new consumer occasions. Cannabis beverages are one of the most exciting and compelling examples of that opportunity. Today, Tilray pays over 100 million Canadian dollars in excise tax, and the legal cannabis industry has become an increasingly important contributor to government revenue across Canada. And as governments look for responsible ways to expand that revenue base while strengthening the regulated market, cannabis beverages represent a clear opportunity for that.

Tilray is the largest producer of THC beverages in Canada with over a 40% market share, and broader access through bars, restaurants and other regulated outlets would be a meaningful win for consumers, governments, hospitality operators and, of course, the legal cannabis industry. It would give consumers a safe, regulated environment to try THC cannabis beverages, help drive traffic to hospitality venues and create a stronger and more accessible legal cannabis market. In beverages, BrewDog gives Tilray more than a global brand.

It gives us a passionate consumer following, a scaled hospitality footprint and significant runway to expand across beer, spirits, non-alcoholic beverages and ready-to-drink formats. We see BrewDog as a major growth engine for Tilray, a brand with global reach, cultural relevance and the potential to help reshape our beverage alcohol business over time. 5 million in Q1, largely driven by BrewDog. BrewDog also contributed to sequential growth in the beverage segment, reinforcing the early impact of the acquisition and the momentum we're building.

Importantly, BrewDog became profitable in Q1. Since taking ownership, we have stabilized operations, invested behind the brand, returned BrewDog to profitability and begun unlocking new growth. We recently launched BrewDog's first major campaign under new ownership, followed by the UK-wide Choose Craft campaign, which celebrates the quality, flavor and character that make craft beer worth choosing. The early response has been strong.

Since the Under New Ownership campaign launched and Choose Craft began rolling out, Punk IPA sales across BrewDog's top six off-trade retailers are up 187% over the last two weeks compared with the same period last year. At the same time, BrewDog has also secured over 9,000 new distribution points with the launch of its latest craft beer innovation. BrewDog has also launched eight new on-trade partnerships across live entertainment, sports pubs and hotels. This is exactly the kind of momentum we expected when we acquired BrewDog: a globally recognized consumer brand that Tilray can stabilize, reinvest behind and scale across markets, channels and locations.

We see a major opportunity to make BrewDog an even larger part of Tilray's international growth story. Our strategy is to grow BrewDog globally through a combination of expanded distribution, local market partnerships and a franchise system of BrewDog pubs and bars around the world. As Tilray expands across global medical cannabis markets, we're also building relationships, infrastructure and market knowledge that can support the broader international growth of our beverage businesses.

Through strategic partnerships, we plan to expand BrewDog operations and build bars across key markets where Tilray already has a presence or sees attractive long-term opportunities, including India, Poland, France, Israel and the Middle East. This is how we can use Tilray's global reach to take BrewDog into more markets, create new consumer touch points and strengthen the international growth profile of our beverage business. Long term, we see room for top-line synergies between beverage and cannabis globally.

We're already using BrewDog's reach to expand the beverage portfolio globally, including the launch of over 20 Tilray-owned American craft beers and functional beverages across the UK. BrewDog also delivered strong brand proof points at the 2024 World Beer Awards, with Hazy Jane, Wingman and Mackie's Two Scoops earning gold and Scotland Country Winner honors. Looking ahead, our focus is clear: continue integrating BrewDog, strengthening the business and investing behind its global brand, hospitality platform and consumer experience.

With BrewDog, we're not just building a stronger beer business; we're building a broader global consumer experience rooted in great beer, powered by new innovation, connecting with today's dynamic consumers across craft beer, non-alcoholic beverages, ready-to-drink formats, food, digital engagement and live experience. This is how we take BrewDog beyond beer, deepen our connection with consumers around the world and build one of the most dynamic global beverage and hospitality platforms in the industry.