Sign in

You're signed outSign in or to get full access.

TB

Tilray Brands, Inc. (TLRY)·Q1 2026 Earnings Summary

Executive Summary

  • Record Q1 revenue and return to profitability: Net revenue rose 5% YoY to $209.5M; GAAP net income was $1.5M ($0.00 EPS) versus a $(34.7)M loss (−$0.04 EPS) last year .
  • Mixed vs Street: Revenue beat consensus ($209.5M vs $205.8M, ~+1.8%); EPS beat ($0.00 vs −$0.03). However, S&P Global EBITDA came in below consensus ($4.93M vs $10.29M), despite company-reported Adjusted EBITDA of $10.18M (+9% YoY). Significant variance likely reflects differing EBITDA definitions (GAAP vs company-adjusted)* .
  • Margins compressed: Consolidated gross margin fell to 27% (from 30%) on mix effects in cannabis (re‑entering lower-margin categories) and lower beverage margins post acquisitions .
  • Balance sheet stronger; guidance reaffirmed: Cash $264.8M; net debt ~ $4M; net debt/TTM Adj. EBITDA 0.07x; FY26 Adjusted EBITDA guidance maintained at $62–$72M .
  • Near-term stock catalysts: EPS/revenue beats and reaffirmed guidance vs softer margins and S&P EBITDA miss; international medical momentum (Germany/Italy), Project 420 savings ($25M annualized to date; $33M target) progress, and U.S. rescheduling optionality discussed on the call .

What Went Well and What Went Wrong

What Went Well

  • Canadian and International cannabis momentum: Cannabis net revenue +5% YoY to $64.5M, driven by +12% adult‑use gross revenue; international cannabis +10% YoY to $13.4M .
  • Market share and category leadership in Canada: “Number one” Canadian cannabis producer by revenue with gains in key categories, and reaching #1 in flower by quarter-end (management) .
  • Cost actions and integration: Project 420 delivered $25M in annualized savings toward $33M goal; management emphasized SKU rationalization and distributor focus to rebuild authorizations and improve brand velocity .
  • Quote: “We achieved net income of $1,500,000 and earnings per share of zero... Overall, total revenue increased by 5% year over year to a Q1 record $210,000,000” — CEO .

What Went Wrong

  • Margin compression: Gross margin fell to 27% (30% LY) as cannabis margin declined to 36% (40% LY) on mix shift (infused pre‑rolls, vapes) and beverage margin declined to 38% (41% LY) post‑acquisition mix .
  • Beverage softness and profitability pressure: Beverage revenue was flat YoY at $55.7M; margins down; management cited category headwinds and relisting cycle timing, with more “wood to chop” on procurement and footprint optimization .
  • Europe permit and quota timing: Backlogged permits in Portugal and German import quota constraints delayed some international shipments, potentially shifting sales from Q2 to Q3 FY26 (management) .

Financial Results

Headline metrics vs prior year, prior quarter, and estimates

MetricQ1 FY2025 (Aug 2024)Q4 FY2025 (May 2025)Q1 FY2026 (Aug 2025)Q1 FY2026 Consensus Est*
Net Revenue ($M)200.0 224.5 209.5 205.8*
GAAP EPS ($)-0.04 -1.30 0.00 -0.03*
Gross Margin (%)30% 30% 27% —
Adjusted EBITDA ($M, company)9.33 27.64 10.18 —
EBITDA ($M, S&P Global)*N/AN/A4.93*10.29*
  • Q/Q: Revenue declined from seasonally stronger Q4 FY25 ($224.5M) to $209.5M; Gross margin held ~flat vs Q4 (30%) but down YoY to 27%; company Adjusted EBITDA improved YoY (+9%) to $10.18M .
  • Vs estimates*: Revenue and EPS beat; S&P Global EBITDA missed consensus, reflecting definitional differences with company Adjusted EBITDA*.

Segment revenue and margins (YoY)

SegmentQ1 FY2025 Revenue ($M)Q1 FY2026 Revenue ($M)YoYQ1 FY2025 GM%Q1 FY2026 GM%
Cannabis61.25 64.51 +5% 40% 36%
Beverage55.97 55.74 -0% 41% 38%
Distribution68.07 74.01 +9% 12% 11%
Wellness14.75 15.24 +3% 32% 32%

Cannabis net revenue by channel (YoY)

ChannelQ1 FY2025 ($M)Q1 FY2026 ($M)YoY
Canadian Medical6.26 6.15 ~flat
Canadian Adult‑Use (gross)57.24 64.07 +12% (gross)
Wholesale5.51 4.16 Down
International12.19 13.37 +10%
Less: Excise Taxes(19.95) (23.22) Higher

Balance sheet and cash flow KPIs

KPIQ1 FY2025Q4 FY2025Q1 FY2026
Cash & Cash Equivalents ($M)205.2 221.7 264.8
Net Debt ($M)——~4.0 (press) ; 3.9 (call)
Net Debt / TTM Adj. EBITDA—0.3x (FY25) 0.07x
Cash used in Operations ($M)(35.3) (12.8) (Q4) (1.3)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (company)FY 2026$62M–$72M (Q4 FY25) $62M–$72M (reaffirmed) Maintained
Project 420 Annualized SavingsFY 2026 Target$33M target; $24M realized by Q4 FY25 $33M target; $25M realized to date Progressing

No explicit revenue, margin, opex, tax, or dividend guidance was issued. Management did note European medical distribution expansion plans (Germany) and broader international growth opportunities (qualitative) .

Earnings Call Themes & Trends

TopicQ3 FY2025 (Feb 2025)Q4 FY2025 (May 2025)Q1 FY2026 (Aug 2025)Trend
AI/TechnologyIntroduced AI in greenhouse ops; crypto acceptance plans Reiterated AI initiatives across operations No new specifics; focus on ops execution [call context]Stable
Supply chain/PermitsNo tariff impact; focus on cost and SKU rationalization Integration and cost saves Portugal permits improving; Germany quota timing may shift sales Q2→Q3 Improving permits; quota timing risk
Product performance (Beverage)SKU rationalization; +36% GM in Q3 Q4 bev margin 38% vs 53% LY; integration ongoing Brand relistings and co‑brands; margins still pressured; $25M saves to date Gradual improvement from low base
Regional trends (EU Med)Strong growth; 10-state HDD9 U.S. rollout International cannabis +71% in Q4; FY plan Germany new strains; Italy Molteni partnership; Panama JV; EU capacity Expanding
Regulatory/LegalHDD9 positioning; revised FY25 revenue guide FY26 Adj. EBITDA guide $62–$72M U.S. rescheduling optimism; German Rx framework watch Watchful positive bias

Management Commentary

  • “We achieved net income of $1,500,000 and earnings per share of zero... total revenue increased by 5% year over year to a Q1 record $210,000,000” — CEO .
  • “Through Project 420, we've realized $25,000,000 in annual savings, moving closer to our goal of $33,000,000” — CEO .
  • “Cannabis gross margin was 36%... decline... from a higher mix... such as infused pre‑rolls and vapes... We believe the decline this quarter is temporary” — CFO .
  • “During the quarter, we reduced our outstanding debt by $7.7 million... net debt... $3.9 million; net debt to TTM adjusted EBITDA 0.07x; cash $265 million” — CFO .
  • “We expect to increase our medical cannabis distribution footprint by threefold in fiscal 2026 [Germany]” — CEO .

Q&A Highlights

  • EU timing and permits: Management reported progress in Portugal permits and highlighted German quota timing could shift sales into Q3 FY26; majority of EU sales currently supplied from EU GMP facilities with optionality from Canada via Portugal .
  • U.S. rescheduling optionality: Company sees multiple pathways—leveraging medical infrastructure, potential pharma partnerships or acquisitions—should Schedule III occur .
  • Beverage profitability path: $25M of $33M savings captured; further SKU rationalization, facility consolidation, procurement efficiencies, and retail relistings expected to support margin improvement amid category headwinds .
  • Digital assets: Company purchased ~$1M of Bitcoin; exploring acceptance on websites and potential tokenization, positioned as adjacent marketing/commerce initiatives rather than a strategy pivot .
  • Canada adult‑use dynamics: Market pricing −1.3% with volumes +6.5%; TLRY pricing +2% and volume ahead of market; seeks excise reform and expanded THC beverage on‑premise channels .

Estimates Context

  • Q1 FY2026 vs S&P Global consensus*: Revenue $209.5M vs $205.8M (beat); EPS $0.00 vs −$0.03 (beat); EBITDA $4.93M vs $10.29M (miss). The company’s Adjusted EBITDA was $10.18M (non‑GAAP), explaining much of the variance with S&P’s EBITDA framework .
  • FY2026 outlook*: Street EBITDA at ~$61.1M vs company guidance $62–$72M; reaffirmation suggests upside risk if execution/mix normalize; margin recovery remains the swing factor*.

Key Takeaways for Investors

  • Revenue/EPS beats and return to profitability underpin confidence; margin compression and S&P EBITDA miss are the primary debate points .
  • Cannabis momentum (Canada adult‑use +12% gross; international +10%) and distribution scale (CC Pharma) provide growth levers as EU permitting normalizes .
  • Beverage turnaround continues: $25M of $33M cost saves captured; relistings and brand activations should support gradual margin repair, but category headwinds persist near term .
  • Strong liquidity (cash $264.8M) and minimal net leverage (0.07x) create flexibility to pursue international expansion and selective M&A .
  • Watch Q2–Q3 cadence: German quota timing and Portugal permit flow may shift sales; management flagged potential Q2→Q3 shift .
  • U.S. rescheduling optionality is meaningful (3–5% share of a potential ~$10B medical market implies $300–$500M opportunity), but timing remains uncertain .
  • For modeling: Keep company Adjusted EBITDA vs S&P EBITDA definitions distinct; if mix normalizes and Project 420 completes by Q3 FY26, FY26 EBITDA could track toward guidance mid‑point, but margin execution is key .

Footnotes and sources:

  • Company filings and press releases: Q1 FY2026 8‑K/Ex.99.1 and press release ; Q4 FY2025 press release ; Q3 FY2025 press release .
  • Earnings call transcript (Q1 FY2026) for management commentary and Q&A .
  • Additional Q1‑period press releases: Germany strains , Italy partnership , Panama JV , HDD9 lineup expansion .
  • Estimates marked with an asterisk (*) are Values retrieved from S&P Global.