- Net Revenue: $789 million, a 26% increase year-over-year.
- Adjusted Gross Profit: $236 million, a record high.
- Adjusted EBITDA: $60.5 million, a record high.
- Adjusted Net Income: $6.2 million.
- Adjusted Free Cash Flow: $7 million for the year.
- Net Convertible Debt Reduction: Approximately $300 million.
- Net Debt-to-EBITDA Ratio: Reduced to 1.73.
- Cost Saving Synergies: $35 million, exceeding the target by 31%.
- Canadian Cannabis Revenue (Q4): $58.8 million, the highest revenue quarter of the year.
- Canadian Cannabis Volume: 140 metric tons, a 60% increase.
- Unit Sales: 35 million units, a 130% increase.
- International Cannabis Revenue: $53 million, a 22% increase year-over-year.
- CC Pharma Revenue: $259 million, flat year-over-year.
- Beverage Segment Revenue: $200 million, with an annualized projection of $300 million.
- Wellness Segment Revenue: $55.3 million, a 5% increase year-over-year.
- Wellness Segment Gross Margin: 30%, up from 29% last year.
- Q4 Net Revenue: $229.9 million, a 25% increase year-over-year.
- Q4 Beverage Alcohol Revenue: $76.7 million, a 137% increase year-over-year.
- Q4 Net Cannabis Revenue: $71.9 million, a 12% increase year-over-year.
- Q4 Distribution Revenue: $65.6 million, a 10% decrease year-over-year.
- Q4 Wellness Revenue: $15.7 million, a 6% increase year-over-year.
- Q4 Adjusted EBITDA: $29.5 million, a 37% increase year-over-year.
- Cash and Marketable Securities: $260.5 million as of May 31.
Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tilray Brands Inc (TLRY, Financial) achieved a record net revenue of $789 million for fiscal year 2024, marking a 26% growth year-over-year.
- The company reported a record adjusted gross profit of $236 million and adjusted EBITDA of $60.5 million.
- Tilray Brands Inc (TLRY) significantly reduced its net convertible debt by approximately $300 million, improving its net debt-to-EBITDA ratio to 1.73.
- The acquisition of HEXO and Redecan has expanded Tilray's cannabis product portfolio, contributing to an 85% year-over-year increase in mainstream flower sales in adult-use cannabis.
- Tilray Brands Inc (TLRY) is now the fifth largest craft brewer in the US, with a 4.5% share of the craft beer market, following the acquisition of eight iconic beer and beverage brands from ABI.
Negative Points
- Tilray Brands Inc (TLRY) faced approximately $10 million in cannabis price compression and paid around $100 million in excise tax and regulatory fees in Canada, impacting the bottom line.
- The company incurred higher operating insurance rates of nearly $7 million due to its cannabis businesses.
- Despite the growth, the Canadian government did not resolve the issue of cannabis excise taxes, which remains a significant financial burden.
- The integration of acquired brands into Tilray's production facilities is ongoing, with some brands still under co-manufacturing agreements, affecting gross margins.
- The international cannabis market, particularly in Germany, is experiencing bottlenecks with import permits and prescription fulfillment, which could hinder growth.
Q & A Highlights
Highlights from Tilray Brands Inc (TLRY) Q4 2024 Earnings Call
Q: Can you explain the decision regarding EBITDA guidance for fiscal '25?
A: Irwin Simon, Chairman and CEO: We focus on sales and organic growth, which drive our financials. While we don't provide specific EBITDA guidance, our sales and margin targets should help analysts estimate EBITDA.
Q: What are the next steps for integrating the ABI brands and improving gross margins?
A: Irwin Simon, Chairman and CEO: Key steps include growing the brands, increasing manufacturing efficiency, leveraging our 500 distributors, and exploring international opportunities. Improving gross margins by a few points can significantly impact our bottom line.
Q: How should we think about EBITDA margin expansion and free cash flow outlook for next year?
A: Irwin Simon, Chairman and CEO: We expect double-digit growth in cannabis and beverage segments, with stable CapEx around $30 million. Carl Merton, CFO: We don't anticipate significant working capital growth, and we aim to maintain or improve free cash flow.
Q: Can you provide more details on the growth in Germany's cannabis market post-regulation changes?
A: Denise Faltischek, Chief Strategy Officer: We saw a 65% increase in sales since April 1. Challenges include longer permit processing times and prescription fulfillment delays, but these are expected to be temporary.
Q: What is the outlook for hemp-derived Delta-9 beverages in the US?
A: Irwin Simon, Chairman and CEO: We plan to launch in select states like Texas and New Jersey, leveraging our existing distribution network. There's strong interest from distributors and retailers.
Q: How do you plan to compete in the energy drinks market?
A: Irwin Simon, Chairman and CEO: We will focus on our HiBall brand, which has strong consumer demand. We also have new products like Liquid Love water and non-alcoholic beers that have received positive feedback.
Q: Are you planning to sell Delta-9 beverages through e-commerce?
A: Irwin Simon, Chairman and CEO: Yes, we will sell Delta-9 beverages online and through retail channels where legally permissible.
Q: What is the supply situation in Germany's cannabis market, and are you seeing any price changes?
A: Denise Faltischek, Chief Strategy Officer: The market is not saturated, and there's room for more supply, especially in whole flower. We expect market segmentation into premium, mainstream, and value products.
Q: Can you provide more color on the organic growth guidance across your segments?
A: Irwin Simon, Chairman and CEO: We expect double-digit growth in cannabis and beverage segments, low to mid-single-digit growth in wellness, and no significant growth in our CC Pharma distribution business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
