Tilray Brands (TSX: TLRY) has reported its financial results for Q3 of fiscal 2025, ending February 28. The company’s net revenue stood at $185.8 million, inching down from $188.3 million in the same period last year.
On a constant-currency basis, net revenue reached approximately $193 million, but strategic initiatives and the discontinuation of certain low-margin SKUs weighed on overall sales. Notably, Tilray says it saw a $13 million shortfall resulting from SKU rationalization efforts.
In terms of gross profit, Tilray recorded $52.0 million, a 5% improvement over $49.4 million in last year’s third quarter. This gain yielded a gross margin of 28%, up from 26% a year ago.
Tilray’s cannabis segment generated $54.3 million in net revenue, down from $63.4 million in the prior-year period. Cannabis gross margins, however, rose to 41% from 33% last year. This notable margin expansion came partly from Tilray’s decision to redirect product from Canada to higher-margin international markets—though that strategy deferred some Canadian revenue from the third quarter into the forthcoming period.
The beverage segment reported net revenue of $55.9 million, up from $54.7 million last year, despite a $6 million reduction tied to SKU rationalization. Gross margin in this business also strengthened to 36%, compared to 34% in the third quarter of fiscal 2024. Tilray’s wellness division, which includes Manitoba Harvest, posted a modest year-over-year revenue increase to $14.1 million from $13.4 million, while pushing gross margins up to 32% from 30%.
Despite currency headwinds, Tilray’s distribution business saw net revenue of $61.5 million, an 8% year-over-year rise that becomes a 15% increase when viewed on a constant-currency basis. Gross margin edged down to 9% from 10% previously.
The most striking figure, however, was the net loss of $793.5 million, which dwarfed the prior year’s loss of $105.0 million. Management attributed roughly $700 million of that loss to non-cash impairment charges, driven by broader macroeconomic challenges and a decline in market capitalization.
Adjusted net loss was $2.9 million, down from an adjusted net income of $0.9 million a year ago, and adjusted EBITDA came in at $9.0 million compared to $10.2 million in the same quarter of fiscal 2024.
A key focus for management this quarter was fortifying the balance sheet. Tilray reduced total debt by $71 million, including a $58 million reduction in convertible notes, which helped bring the company’s net debt to trailing 12-month EBITDA below 1.0x. Tilray also ended the quarter with $248 million in cash and marketable securities.
Tilray revised its fiscal year 2025 net revenue guidance to a range of $850 million–$900 million, reflecting updated currency assumptions and the financial impact of SKU rationalizations. The company indicated that without the combined $50 million impact from currency and SKU discontinuations, net revenue would likely have landed in the $900 million–$950 million range.
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