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Shares of Canopy Growth (NASDAQ:CGC) lost ~12% in the premarket on Friday after the Canadian cannabis player reported its Q4 results for fiscal 2025, falling well short of Street forecasts as its international operations and Storz & Bickel segment underperformed,
The Ontario-based company reported C$65.0M in net revenue for the quarter, missing the consensus by $5.5M with ~11% YoY growth, even as Canopy’s (NASDAQ:CGC) Canadian segment offset a sharp decline in the other segments.
While Canada cannabis sales improved ~4% YoY to C$40M, backed by ~13% growth in medical cannabis, CGC’s international cannabis segment contracted ~35% YoY to generate C$8M in net revenue, and the company’s Storz & Bickel brand added C$17M, implying a ~23% drop.
CGC’s adjusted gross margin fell 200 bps from the prior year period to ~19%, driving its adjusted EBITDA and GAAP loss per share to C$9M and C$1.43. According to Bloomberg data, both figures missed Wall Street forecasts of $3.9M and $0.49, despite ~39% YoY and ~35% YoY improvement, respectively.
While the company’s free cash outflow worsened by ~60% YoY to C$36M during Q4, its full-year free cash outflow fell ~24% YoY to C$177M, mainly due to lower interest payments as the company’s total debt reached C$304M as of Mar. 31 compared to C$597M a year ago.
“We are committed to achieving positive adjusted EBITDA in the near term and positive free cash flow over time as we accelerate growth across our global medical cannabis businesses and improve margins,” CEO Luc Mongeau remarked.
The company announced plans to improve gross margin and adj. EBITDA, driven by annualized cost savings of at least C$20M over the next 12–18 months from cost reduction opportunities identified in SG&A and Cost of Sales during Q4.