Aurora Cannabis (NASDAQ:ACB) reported fiscal third-quarter 2026 results that management said reflect its long-running focus on global medical cannabis and a strategy centered on profitability and sustainable growth. The company’s fiscal Q3 ended December 31, 2025.
Quarterly results highlight international medical growth
CEO Miguel Martin said net revenue increased 7% year over year, driven by record growth in global medical cannabis. Medical cannabis revenue rose 12% to CAD 76.2 million, including 17% international growth, with increased distribution in Germany and new product offerings in Poland cited as key contributors. Aurora noted that more than half of total net revenue was generated outside of Canada during the quarter.
Margins and profitability remain strong, free cash flow positive
Aurora reported consolidated adjusted gross margin of 62%, up 100 basis points year over year, while adjusted gross profit increased 6% to CAD 55.6 million. The medical cannabis segment posted an adjusted gross margin of 69%, which management attributed to the mix shift toward higher-margin international markets as well as sustainable cost reductions and operational efficiencies, including sourcing for Europe from Canada.
Adjusted EBITDA was CAD 18.5 million, compared with CAD 19.4 million in the prior-year quarter. King said the year-over-year decline was primarily tied to lower adjusted gross profit in the plant propagation segment and higher adjusted SG&A. Adjusted net income was CAD 7.2 million versus CAD 7.4 million a year earlier.
The company generated positive free cash flow of CAD 15.5 million, down from CAD 27.4 million in the prior-year quarter. King attributed the change largely to a smaller working capital recovery, down CAD 9.2 million year over year.
Aurora ended the quarter with CAD 154 million in cash, cash equivalents, and short-term investments and reported no cannabis business-related debt.
Strategic changes: Canadian consumer pullback, Bevo divestiture, and new ATM program
Martin said Aurora will begin exiting select markets within Canada’s lower consumer cannabis segment to further prioritize product allocation and resources toward higher-margin global medical cannabis. He said the consumer segment carries higher sales and marketing expenses than medical cannabis and that the shift is expected to benefit adjusted SG&A and consolidated adjusted gross margins in coming quarters.
Management cautioned that the initiative is expected to come with some one-time costs impacting cash flow in fiscal Q4, but Martin said the company anticipates higher adjusted EBITDA contribution once the changes are complete. In response to analyst questions, Martin said the company is still evaluating what the consumer exit will look like and did not rule out a full exit from Canadian consumer cannabis over time, emphasizing that decisions will be based on profitability and growth.
Aurora also announced plans to divest its controlling stake in Bevo, describing the plant propagation business as lower margin relative to the company’s medical cannabis focus. Martin said the transaction would sell Aurora’s majority share to Bevo’s other principal shareholders and noted that the deal structure includes economics that allow Aurora to continue participating in Bevo’s success, including earn-outs and facilities that were contributed previously.
King said that following the divestiture, Aurora will no longer consolidate Bevo’s results and expects the business to be treated as discontinued operations. She told analysts the company would provide more clarity on implications for financials as closing conditions are finalized, and emphasized that investors should focus modeling efforts on the global medical cannabis business.
Separately, Aurora said it filed a prospectus supplement to establish a new at-the-market (ATM) equity program allowing issuance of up to $100 million of common shares at the company’s discretion. Martin said any proceeds would be used only for “strategic and accretive” purposes, including increased cultivation capacity and potential M&A, and not for operations.
Market commentary: Germany expansion, Australia mix shift, and Poland execution
Martin highlighted Germany as a primary driver of Aurora’s double-digit international revenue growth and described it as Europe’s largest individual medical cannabis market. He said Aurora continues to gain share, supported by its reputation with wholesalers, distributors, and pharmacists, along with a broad portfolio of core and premium products. Aurora also introduced a new brand aimed at affordability to expand patient options, while management said baseline pricing for its core and premium products has remained largely unaffected despite price pressure in the value segment.
The company said it is doubling production at its German manufacturing site, with management pointing to expected yield improvements and operational efficiencies. Martin also noted that Aurora’s German site is part of a manufacturing network that includes Canadian facilities recently recertified under GMP standards for another three years.
In Australia, Martin said Aurora holds the number two share in its largest international market and characterized the market as heavily concentrated in value-priced products. He said Aurora is working to “premiumize” its sales mix toward core and premium offerings and expand patient access through additional distribution agreements, but acknowledged expected near-term pressure on sales and gross profit during the transition. In Q&A, Martin said the strategy is not disruptive and is consistent with Aurora’s global approach.
In Poland, management said Aurora gained market share and held the number one position in calendar year 2025. Martin said the company successfully navigated regulatory-driven shifts in prescriptions from telehealth platforms to clinics by relying on product registration, distribution, and patient connectivity through clinics. He also said Aurora expanded its Poland portfolio with a third proprietary cultivar manufactured in GMP-certified facilities.
Aurora said the U.K. business remains focused on premium and super-premium segments, but fiscal Q3 sales declined year over year due to an influx of value products. Management said its strategy centers on expanding distribution and clinic relationships through new partnerships.
Guidance and outlook: medical cannabis growth expected to continue
For fiscal year 2026 (ending March 31), King said Aurora expects annual global medical cannabis net revenue to increase year over year to between CAD 269 million and CAD 281 million, driven primarily by 10% to 15% growth in the global medical cannabis segment. Consolidated adjusted gross margins are expected to remain strong, supported by favorable mix and operational efficiencies, while annual consolidated adjusted EBITDA is anticipated to rise year over year to a range of CAD 52 million to CAD 57 million, which King said represents 5% to 10% annual growth.
During Q&A, management reiterated its expectation for a strong fiscal Q4 while acknowledging potential headwinds in some markets. Martin said Aurora’s overarching goal is to capitalize on what he described as a rapidly evolving global medical cannabis opportunity, leveraging regulatory capabilities, genetics, and GMP manufacturing and distribution to expand in existing and emerging markets.
About Aurora Cannabis (NASDAQ:ACB)
Aurora Cannabis Inc (NASDAQ: ACB) is a Canadian licensed producer of medical and consumer cannabis products headquartered in Edmonton, Alberta. Established in 2013, the company operates under Health Canada’s regulations to cultivate, process and distribute a range of cannabis-based offerings. Since its initial public listing in 2017, Aurora has grown into one of the country’s largest growers by cultivation capacity and production output.
The company’s core business spans the cultivation of dried flower, the extraction of cannabis oils and the development of value-added products such as softgels, capsules and topical treatments.
