Earnings Call Insights: Tilray Brands, Inc. (TLRY) Q4 2025
Management View
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CEO Irwin David Simon highlighted, “We reached a record revenue of $22.4 million in the international cannabis business in Q4, up 71% year-over-year. Total cannabis gross margin increased by 400 basis points and reached to 44% in Q4, and cannabis gross margin increased by 700 basis points in the fiscal year. And in Q4, we also achieved our second highest ever quarterly consolidated adjusted EBITDA of almost $28 million.”
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Simon stated that full-year consolidated revenue reached $821 million, reflecting a 4% increase year-over-year on a constant currency basis, and $834 million, a 6% increase year-over-year. He noted that strategic initiatives to improve margin and profitability impacted revenue by $35 million, with adjusted revenue potentially reaching $870 million if not for these actions and currency fluctuations. Gross profit for the year hit a record $241 million, up 8% year-over-year.
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Simon emphasized strength in Tilray’s international cannabis business, with European cannabis revenue (excluding Australia) increasing organically 112% in Q4 and German revenue growing 134% over the prior year quarter. The company maintained the #1 position in THC beverages, chocolate edibles, oils and capsules, and non-infused pre-rolls in Canada.
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Strategic changes in the beverage division included the acquisition of four craft brands from Molson Coors and ongoing integration efforts, which contributed to $24 million in annualized savings toward a $33 million goal. The beverage segment reported net revenue of $65.6 million in Q4, with leadership changes and restructuring underway to address underperformance.
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Simon announced the appointment of Rajnish Ohri as Managing Director of International to drive market growth across international medical cannabis, beverages, and wellness, particularly in Asia, the Middle East, India, and Turkey.
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CFO Carl A. Merton reported, “Net revenue for fiscal 2025 grew by 4%, reaching a record $821.3 million or $833.7 million on a constant currency basis. This growth was primarily driven by a 71% increase in international revenue during the fourth quarter. While this figure represents an improvement over the prior year’s $788.9 million, it is below the lower end of our revised guidance of $850 million. This was mainly due to reduced beverage volumes and delayed export permits, which led to lower-than-expected international revenue in the fourth quarter.”
Outlook
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Tilray provided fiscal 2026 guidance for adjusted EBITDA between $62 million and $72 million. Merton stated, “We anticipate adjusted EBITDA between $62 million and $72 million.”
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Management expects continued growth from international cannabis and margin expansion, with Project 420 cost savings flowing through in the beverage segment.
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Simon noted plans to strengthen the balance sheet through additional debt restructuring in fiscal 2026.
Financial Results
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Record annual revenue was $821.3 million, up from $788.9 million the prior year. Gross profit increased to $240.6 million and gross margin improved to 29% from 28%.
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Cannabis gross margin rose to 40% from 33% the year prior. Beverage gross margin decreased to 39% from 44%, reflecting lower Q4 demand and integration of acquired brands. Wellness gross margin improved to 32% from 30%.
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Net loss for fiscal 2025 increased to $2.2 billion, primarily due to non-cash impairment charges totaling $2 billion, including $1.4 billion in Q4. Adjusted net income was $9 million for the year. Adjusted EBITDA was $55 million, down from $60.5 million.
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Q4 net revenue was $224.5 million, with net cannabis revenue at $67.8 million, net beverage revenue at $65.6 million, wellness revenue at $17 million, and distribution revenue at $74.1 million. Q4 gross profit was $67.6 million.
Q&A
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Kaumil S. Gajrawala, Jefferies: Asked about timing of import permits and revenue recognition. Simon replied that the permit delays in Portugal and Spain were largely resolved and expects the $8 million in revenue from trapped shipments to be recognized in Q1 and Q2.
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Gajrawala, Jefferies: Inquired about stabilization in Canada. Simon explained, “The consumer now — is now skewed to go into Canada stores and not buying from the illicit market… I’m really seeing the market, you’re seeing consumers now enjoying more and more cannabis products.”
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Xin Ma, TD Cowen: Questioned international growth outlook and Project 420. Simon clarified, “It’s $8 million, not $6 million, and it was trapped shipments, and you should see that predominantly in Q1, and also we’ll start to see maybe there’s a little in Q2.” Regarding Project 420, Simon detailed ongoing facility consolidation, distributor rationalization, and procurement agreements.
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Aaron Thomas Grey, Alliance Global Partners: Sought color on 2026 EBITDA drivers and Germany dynamics. Merton explained growth is expected from international business with additional benefits from Project 420 cost savings. Faltischek addressed German price compression, noting focus on cost reductions and supply chain ramp-up.
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Pablo Ernesto Zuanic, Zuanic & Associates: Asked about U.S. cannabis rescheduling impact. Simon responded that rescheduling would allow Tilray to enter the U.S. medical market and facilitate institutional investment and retail banking.
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Frederico Yokota Choucair Gomes, ATB Capital Markets: Asked about beverage/wellness expansion and cultivation ramp. Simon said international expansion efforts are imminent, with a focus on protein-rich hemp foods for the Middle East and Asia. Most cultivation ramp will serve Canadian demand.
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Nicholas Steven Anderson, ROTH Capital Partners: Inquired about proposed German telemedicine legislation and U.S. reform optimism. Faltischek stated the company is actively working with industry groups to address potential legislative changes, while Simon expressed cautious optimism on U.S. regulatory progress.
Sentiment Analysis
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Analysts were focused on regulatory risks, execution of cost savings, and international expansion, adopting a questioning but constructive tone.
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Management maintained a confident and optimistic stance, repeatedly stressing “we are confident,” “we see tremendous opportunities,” and “we feel good about the top line growth.”
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Compared to the previous quarter, management’s tone remained assertive during prepared remarks and transitioned to detailed, reassuring answers in Q&A. Analyst sentiment remained neutral, with persistent inquiries about regulatory and execution risks.
Quarter-over-Quarter Comparison
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The company’s adjusted EBITDA guidance for 2026 and explicit discussion of large non-cash impairment charges represent new focal points versus Q3.
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International cannabis growth accelerated, and German revenue growth was highlighted as materially higher this quarter.
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Management continued to prioritize margin and profitability, with the beverage segment’s ongoing reset and Project 420 cost savings remaining central.
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Analysts sustained their interest in international market expansion, regulatory changes, and the trajectory of cost savings.
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Management confidence in international growth and cost controls increased, while analyst skepticism regarding execution and regulatory headwinds persisted.
Risks and Concerns
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Management cited ongoing regulatory risks and delays in export permits, especially in Europe, but indicated these issues are being resolved.
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Large non-cash impairment charges driven by share price declines and regulatory uncertainty in the U.S. were explained as accounting requirements, not changes to business fundamentals.
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Analysts probed potential legislative changes in Germany and the U.S. and the impact of price compression and competition in key markets.
Final Takeaway
Tilray Brands closed fiscal 2025 with record international cannabis revenue growth, margin improvements, and robust expansion in wellness products despite headwinds in the beverage segment and significant non-cash impairment charges. The company signaled confidence in capturing international market share and optimizing operations, with 2026 adjusted EBITDA guidance set between $62 million and $72 million and continued strategic focus on profitability and balance sheet strength.