Tilray reported positive adjusted EBITDA of $10 million (12.5 million Canadian dollars) for the three months ended Feb. 28, about 24% lower than the previous quarter after its cannabis sales tumbled to $55 million in the three-month period.
It was the 12th consecutive quarter of positive adjusted EBITDA, a measure of profitability in which the New York-headquartered company is an industry leader.
However, net sales for the December-February quarter were $151.9 million, slightly lower than analysts’ consensus expectations.
Net income was $52.5 million.
Tilray’s sales continued to fall in some of its key reporting segments.
Gross sales of Canadian adult-use cannabis products were $43.5 million in the quarter, down from the previous quarter’s $49.5 million.
Canadian medical sales fell 10% to $7.1 million in the third quarter.
Wholesale cannabis sales rose to $2.8 million in the third quarter, from $2.3 million in the second.
Distribution revenue, consisting of sales by its German medical shipping subsidiary, CC Pharma, was $62.5 million, 9% lower than the previous quarter.
Beverage alcohol revenue rose substantially over the previous quarter to $19.6 million.
Wellness revenue also grew from the previous period, rising 6.5% to $14.7 million in the December-February quarter.
Revenue from international cannabis products rose 15% quarter-over-quarter to $15.8 million.
The main takeaway for Pablo Zuanic, an analyst for New York-based investment banking firm Cantor Fitzgerald, “is the continued strength in the international business,” he wrote in a note to clients.
“We realize the domestic business is going through a transition, but international was certainly the bright spot this quarter,”
Cannabis accounted for 36% of total revenue.
The rest were:
- Distribution: 41%.
- Beverage alcohol: 13%.
- Wellness: 10%.
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Despite the falling cannabis revenue, Tilray CEO Irwin Simon said the company’s latest quarter reflects “progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4 billion in revenue by the end of fiscal 2024.”
“We also continued sourcing and executing strategic and shareholder-friendly transactions that provide value with notable upside,” he said in a news release.
“As the global economy re-opens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands’ value proposition will deliver sustained and tangible shareholder value.”
Tilray shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.
