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By Karen Roman
Our favorite plug’s strategy is paying off: Net revenue is increasing and earnings quality keeps improving.
Aurora Cannabis Inc. (Nasdaq: ACB) reported that net revenue grew C$7 million to an impressive C$94.2 million for the quarter, thanks to contributions from the global medical cannabis and plant propagation segments. In line with ACB’s decision to prioritize the higher-margin medical cannabis business, the segment’s revenue rose 12% to C$76.2 million, led by 17% growth in international markets such as Germany and Poland. Medical cannabis accounted for a significant 81% of total revenue, underscoring the company’s focus on regulated, physician-led channels.
Margins remained resilient while profitability metrics decreases just slightly. Adjusted gross margin improved to 62%, while adjusted EBITDA declined 5% year over year to C$18.5 million, pressured by higher operating expenses and weaker plant propagation margins. Management confirmed the full year 2026 adjusted EBITDA guidance of C$52–57 million, despite a more cautious outlook for the fourth quarter.
Strategically, ACB is refocusing on higher-return medical markets. The company is divesting the less-profitable plant propagation business and exiting select Canadian consumer cannabis markets, reallocating resources toward international medical opportunities.
Meanwhile, ACB’s balance sheet remains one of the strongest in the industry with C$154 million in cash and no debt. For additional capital flexibility, ACB recently filed for an at-the-market offering up to C$100 million.
Looking ahead, management expects fiscal year 2026 to be a record revenue year, with estimates forecasting continued top-line growth and margin expansion through fiscal year 2028. Aurora’s valuation remains discounted relative to peers and its own history, reflecting market caution, despite top-line growth and improved margins.
Check out the report below and see for yourself why ACB could be a candidate for a rerating in 2026.
