Aurora Cannabis Posts Record EBITDA But Free Cash Flow Remains In The Red
Aurora Cannabis Inc. (TSX: ACB) reported strong results in its fiscal Q2 2025 earnings, posting a 29% year-over-year increase in total revenue, reaching $81.1 million compared to $63.1 million in Q2 2024. Notably, this represented a slight decrease from the $83.4 million reported in the previous quarter.
The revenue boost from last year came predominantly from the medical cannabis segment, which grew 41% to $61.3 million, up from $43.5 million in Q2 2024. International revenue increased 93% year-over-year to $35 million, outpacing domestic Canadian medical revenue and making up 57% of the company’s total medical cannabis revenue. The rapid growth is derived from international markets such as Germany, Australia, and Poland.
Aurora’s consumer cannabis segment, however, continued to struggle, posting revenue of $10.4 million, down 13% year-over-year from $12 million and a 10% sequential decrease from $11.5 million in Q1 2025. The company attributes this decline to its strategy of prioritizing higher-margin international medical cannabis over consumer cannabis. Still, this decline has affected profitability in the segment, with adjusted gross margin falling sharply to 14%, down from 27% in Q2 2024 and 24% in the previous quarter.
The firm’s plant propagation business, driven by its Bevo Farms unit, saw moderate growth, with revenue reaching $8.6 million—up 21% from $7.2 million in Q2 2024. However, this was a steep decline from $23.1 million in Q1 2025, underscoring the seasonality of this segment and raising questions about its long-term growth potential. The adjusted gross margin for plant propagation also decreased slightly to 19%, from 22% in Q2 2024.
SG&A expenses rose to $31.7 million, up from $27.7 million in Q2 2024 and $31.4 million in Q1 2025, consistent with increased freight and logistics expenses from international sales. Aurora’s acquisition of MedReleaf Australia and increased exports to Europe have also added incremental costs that could impact the company’s ability to reach its free cash flow targets.
The company achieved a record adjusted EBITDA of $10.1 million, a 210% year-over-year increase from $3.3 million in Q2 2024 and more than doubling the $4.9 million posted in the previous quarter. However, the company reported a negative free cash flow of $26.4 million, reflecting a decrease from a positive free cash flow of $6.5 million in the prior quarter, although it was a modest improvement from a negative $29.5 million in Q2 2024.
On the balance sheet, Aurora reported $152 million in cash, and a positive working capital position of $308.6 million, up 54% year-over-year from $200.8 million. This strong cash position reflects a balance sheet significantly improved from Aurora’s previous struggles with high debt, with its only remaining debt tied to non-recourse obligations at Bevo Farms. However, the company’s total assets fell slightly to $808.8 million, down from $838.7 million in the prior quarter and $818.4 million a year ago.
Looking ahead, Aurora is aiming to continue strong adjusted EBITDA, along with positive free cash flow by the end of Q3 2025. Management has forecasted sustained growth in its global medical cannabis segment, particularly in Europe and Australia. However, plant propagation is expected to experience seasonal declines, and the company has not projected a turnaround in the consumer cannabis segment, which could remain a drag on profitability.
Aurora Cannabis last traded at $8.46 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
