Executive Summary

Q4 FY2025 was mixed: net revenue fell 11% year-over-year to $65.0MM CAD with gross margin compressing to 16%, while adjusted EBITDA loss improved to $(9.25)MM, helped by cost controls; Canada medical grew 13% y/y, but Storz & Bickel (S&B) and international declined .
Versus S&P Global consensus, CGC missed on revenue and EPS but beat on EBITDA: Revenue $45.24MM USD vs $49.10MM USD*, EPS $(0.92) vs $(0.38), EBITDA $5.23MM vs $(2.18)MM, with EPS pressured by “other expense” and margin headwinds, while EBITDA benefitted from cost actions [Values retrieved from S&P Global].
Strategy reset under new CEO: unified global medical business, streamlined Canada adult-use (SKU rationalization, focus on pre-rolls/vapes/high-THC), centralized global operations, and new $20MM annualized cost-reduction program; total debt reduced by $293MM in FY2025 to $304MM .
Outlook: management targets positive adjusted EBITDA “near term” but no specific timing; expects Canada margin improvement in FY2026, S&B softness in 1H FY2026 with a new device in fall, and ~C$38MM FY2026 interest expense—key catalysts alongside improving Germany supply, Canada adult-use execution, and progress on Canopy USA/Acreage issues .

What Went Well and What Went Wrong

What Went Well

Canada medical momentum: Q4 Canada medical revenue rose 13% y/y to $20.0MM CAD on larger average order size; Canada total cannabis +4% y/y to $40.4MM CAD .
Cost discipline and EBITDA trajectory: Q4 adjusted EBITDA loss improved 39% y/y to $(9.25)MM; FY2025 adjusted EBITDA loss improved 60% to $(23.50)MM .
Strategic focus and execution improvements: CEO emphasized simplification and “executional excellence,” unifying global medical, tightening Canada adult-use focus, and centralizing global ops; “we’re on track to reduce operating expenses… by at least $20 million over the next 12 to 18 months” .

What Went Wrong

S&B and international headwinds: Q4 S&B revenue fell 23% y/y to $17.1MM CAD on softer device demand; international cannabis declined 35% y/y to $7.5MM CAD, impacted by Poland online prescription ban and Australia competition .
Canada margin pressure: Q4 Canada adjusted gross margin was 11%; margin hit by initial higher costs for Claybourne infused pre-rolls and inventory write-downs tied to portfolio streamlining .
Large “other expense” drove wider net loss: Q4 net loss from continuing ops was $(221.5)MM CAD, including $(202.9)MM “other expense”; free cash outflow of $(36.24)MM increased y/y on working capital .

Financial Results

Headline metrics (CAD, reported)

Metric	Q2 FY2025	Q3 FY2025	Q4 FY2025
Net Revenue ($CAD MM)	$63.0	$74.761	$65.031
Gross Margin (%)	35%	32%	16%
Net Loss from Continuing Ops ($CAD MM)	$(131.6)	$(121.896)	$(221.501)
Adjusted EBITDA ($CAD MM)	$(5.5)	$(3.469)	$(9.248)
Free Cash Flow ($CAD MM)	$(56.441)	$(28.181)	$(36.241)
EPS (Basic & Diluted, Continuing, $CAD)	$(1.52)	$(1.11)	$(1.43)

Segment revenue (CAD)

Segment ($CAD MM)	Q4 FY2024	Q3 FY2025	Q4 FY2025
Canadian adult-use cannabis	$21.0	$21.2	$20.4
Canadian medical cannabis	$17.7	$19.6	$20.0
International markets cannabis	$11.6	$12.0	$7.5
Storz & Bickel	$22.2	$22.0	$17.1
Net Revenue	$72.8	$74.8	$65.0

KPIs and balance sheet (CAD)

KPI	Q4 FY2025
Canada cannabis adjusted gross margin (%)	11%
Storz & Bickel gross margin (%)	37%
Total Debt (period-end) ($CAD MM)	$304
Cash & Equivalents (period-end) ($CAD MM)	$113.811
Cost savings identified (annualized)	≥$20MM over 12–18 months
Fill rates	“mid-90s” in Mar/Apr (improved S&OP)

Results vs Wall Street consensus (USD, S&P Global)

Metric	Q4 FY2025 Consensus	Q4 FY2025 Actual	Delta
Revenue ($USD MM)	$49.10*	$45.24*	Miss ~($3.86)MM (~7.9%)*
Primary EPS ($USD)	$(0.381)*	$(0.921)*	Miss (~$0.54)*
EBITDA ($USD MM)	$(2.18)*	$5.23*	Beat ~$7.41MM*
EPS – # of Estimates	4*	—	—
Revenue – # of Estimates	6*	—	—

Note: Asterisks denote values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA	FY2026 (timing)	Not provided	“Committed to achieving positive Adjusted EBITDA in the near-term,” no specific date	Qualitative only
Free Cash Flow drivers	FY2026	Not provided	Expect significant FCF improvement via lower interest (~$38MM FY2026), better working capital, lower restructuring and capex	Qualitative only
Interest expense	FY2026	Not provided	~C$38MM for full year	New outlook
Canada gross margin	FY2026	Not provided	Expect improvement over FY2026	Qualitative only
Storz & Bickel revenue cadence	FY2026	Not provided	Decline in 1H; improvement in 2H with new device in fall	Qualitative only
Cost reductions	Next 12–18 months	Not provided	≥$20MM annualized savings underway	New program

No formal revenue/EPS guidance was issued; management provided qualitative priorities and operational targets .

Earnings Call Themes & Trends

Topic	Q2 FY2025 (Q-2)	Q3 FY2025 (Q-1)	Q4 FY2025 (Current)	Trend
Global medical supply/expansion	EU cultivator agreements to boost EU medical supply	Poland/Germany growth; int’l margin +100 bps to 41%	Unified global medical under one unit; Germany portfolio expansion; Poland prescriptions hit by online ban	Mixed: structural fix, but Poland headwind
Canada adult-use execution	Pipeline: Wana reintroduction; focus on vapes/pre-rolls/concentrates	Claybourne launch, #3 infused pre-roll in BC/ON; adult-use +15% q/q	SKU rationalization (~1/3 cut), focus on high-THC flower/pre-rolls/vapes; CCELL AIO vapes; adult-use −3% y/y	Improving focus; near-term margin pressure
S&B macro/device demand	+32% y/y in Q2	+19% y/y in Q3	−23% y/y; DTC down >50% on 4/20; 1H FY26 weakness; new device in fall	Turning down; potential 2H catalyst
Cost actions/EBITDA	Adj. EBITDA −$5.5MM; cost discipline	Best Adj. EBITDA to date (−$3.47MM)	≥$20MM savings identified/executing; interest reduced via prepayment	Strengthening
Canopy USA/Acreage	Wana/Jetty progress; Acreage closing plan	—	FV declines; Acreage default forbearance to June 1, 2025; run-rate ~USD $210MM vs prior $300MM	Deteriorated
Regulatory/legal	—	—	Poland online prescription ban hit prescriptions; Germany expansion	Headwind (Poland), tailwind (Germany)

Management Commentary

“Since taking over as CEO in January, we took decisive actions to accelerate growth and profitability… unifying our medical cannabis businesses globally… and streamlining our product portfolio.” — Luc Mongeau, CEO .
“We demonstrated marked year-over-year improvement in Adjusted EBITDA and cash flow in FY2025, while fortifying our balance sheet. We are committed to achieving positive Adjusted EBITDA in the near-term and positive Free Cash Flow over time…” — Judy Hong, CFO .
“We’re on track to reduce operating expenses on an annual basis by at least $20 million over the next 12 to 18 months… at the end of the fourth quarter, we made an additional USD 100 million early prepayment [of our term loan], reducing annual interest expense by approximately USD 13 million.” — Luc Mongeau, CEO .
“For fiscal ’26, we expect to achieve significant improvement in free cash flow driven by interest expenses of approximately $38 million for the full year… improvement in working capital… lower restructuring and capex.” — Judy Hong, CFO .

Q&A Highlights

Path to positive adjusted EBITDA: Near-term target driven by ≥$20MM cost reductions and growth in global medical and focused Canada adult-use; emphasis on execution and portfolio focus (Claybourne traction) .
Differentiation vs prior cost programs: Management restructuring to “fighting business units,” fewer layers, faster decision-making; not just cost-cutting but cultural/operating model change .
International supply consistency: Centralized S&OP and supply allocation to ensure consistent EU-GMP supply, reducing “false starts” in Germany; no major capex needed near term .
Canada medical market: Outperforming a mid-single-digit declining market; CGC believes #2 share with 16% growth FY2025 in Canada medical, aided by Spectrum online store experience .
Acreage underperformance: Ohio adult-use rollout delays and liquidity constraints hurt Acreage and broader Canopy USA fair values; default forbearance through June 1, 2025 under discussion .

Estimates Context

Q4 FY2025 actuals vs S&P Global consensus (USD): Revenue $45.24MM vs $49.10MM (miss ~7.9%); EPS $(0.92) vs $(0.38) (miss); EBITDA $5.23MM vs $(2.18)MM (beat). Street likely revises down on top-line/earnings pressure from S&B softness and Poland, partially offset by stronger cost delivery underpinning EBITDA [Values retrieved from S&P Global].
Estimate depth: 6 revenue and 4 EPS estimates contributed to consensus, indicating moderate coverage [Values retrieved from S&P Global].

Key Takeaways for Investors

Near-term: Mixed print with revenue/EPS misses but EBITDA beat; tactical focus on cost savings (≥$20MM) and interest reduction supports EBITDA trajectory even as S&B and Poland weigh on top line near term .
Canada medical is CGC’s growth/margin anchor; execution improvements and unified global medical structure should stabilize EU supply and support Germany growth in FY2026 .
Canada adult-use reset (SKUs, pre-rolls/vapes/high-THC) is the right playbook; watch for margin rebuild as Claybourne costs normalize and inventory discipline tightens .
S&B is cyclical and macro-sensitive; management telegraphed 1H FY2026 weakness and a new device in fall—2H FY2026 recovery is a key catalyst to monitor .
Balance sheet risk improved but not eliminated: debt down to $304MM; cash $114MM; continued access to ATM ($173MM remaining) provides flexibility, but dilution risk exists .
Canopy USA/Acreage is an overhang: fair value markdowns and Acreage default forbearance inject uncertainty; Ohio/New Jersey ramp and liquidity solutions are critical .
Setup: Trading stance depends on confidence in cost/CF delivery vs top-line headwinds; near-term trades may hinge on S&B demand inflection and Germany medical traction.

Citations:

Q4 FY2025 press release and financials .
Q4 FY2025 Form 8-K with exhibits and detailed schedules .
Q4 FY2025 earnings call transcript .
Q3 FY2025 press release .
Q2 FY2025 press release .
Germany Tweed brand expansion .

Note: S&P Global consensus comparisons and actuals in USD marked with asterisks are Values retrieved from S&P Global.

Canopy Growth Corp (CGC)·Q4 2025 Earnings Summary