Aurora Cannabis Misses Revenue Target After the Company Reports Q4 Earnings

Shares of ACB are Down 9% in After-Hours Trading Following the Company’s Earnings Miss

Aurora Cannabis (TSX: ACB) (NYSE: ACB) released its fiscal Q4 financial results today aftermarket. The company reported net revenue of $98.9 million for the quarter, an increase of 52% over the previous quarter. Net revenue from cannabis jumped 61% compared to the previous quarter coming in at $94.6 million. Aurora also posted gross margin on cannabis net revenue of 58%, a 3% increase.

The company reported an adjusted EBITDA loss of $11.7 million, a 68% improvement over Q3 2019’s loss of $36.6 million. Unfortunately, some of Aurora’s key numbers weren’t in line with analyst expectations. According to the FactSet survey of 11 analysts, the number two Canadian licensed producer was pegged by analysts to report an adjusted EBITDA loss of $0.06 per share on revenues of $108 million.

In early August, Aurora reported its preliminary numbers in which it anticipated net revenues coming in at between $100 million and $107 million. The company also forecasted net cannabis revenue of $90 million to $95 million in addition to stating they were moving toward positive EBITDA.

Other highlights of Aurora’s fiscal Q4 earnings included an increase of 52% on Canadian consumer cannabis revenue which came in at $44.9 million. The company announced its medical cannabis revenue increased by 10% to $29.7 million while its wholesale revenues came in at $20.1 million.

Other Key FQ4 Highlights

Cash cost to produce per gram sold dropped 20% to $1.14 per gram during the quarter.
Production volume jumped 86% to 29,034 kgs.
Medical patient base increased by 10% to 84,729.
Aurora currently has roughly 89,700 active registered patients, up 6%.

For the full-year fiscal 2019, Aurora posted net revenue of $247.9 million, an increase of 349% year-over-year. Gross margin on cannabis net revenue for the fiscal FY2019 was 55% compared to 65% in fiscal FY2018. Also highlighted in Aurora’s full-year numbers was an increase of 920% on kilograms produced and 629% on kilograms sold. Those numbers came in at 57,442 kgs and 36,628 kgs respectively.

Source: Shutterstock

Management Commentary

In 2019 Aurora took its place as the global leader in cannabis production, research, innovation, and international market development. We are executing on all our strategic priorities. Our best in class cultivation methods allow us to grow consistent, high-quality cannabis at scale. Because of this, we’ve delivered solid revenue growth in the fourth quarter. We are working to extend our reach in the U.S. markets. Our partnership with the UFC is a basis to explore CBD-from-hemp and hemp food products. We are also exploring additional opportunities and leveraging our Strategic Advisor. We are focused on building a sustainable, high-margin business while providing patients and consumers with access to safe and reliable medicine.”- Aurora Cannabis CEO Terry Booth

“We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive production costs lower and improve gross margins. Aurora’s diversified product portfolio remains in demand with patients and consumers alike. With the Canadian launch of derivative products in the coming months, we have made the necessary investments to ensure readiness and focus on a variety of value added products. We are very excited to supply an expanded consumer market with premium cannabis and new product forms.” – Aurora Cannabis CFO Glen Ibbott, CFO

ACB Earnings Call

Aurora will host a conference call tomorrow, September 12, 2019, to discuss the results of today’s earnings report. On the call will be CEO Terry Booth, CFO Glen Ibbott, COO Cam Battley, and Executive Chairman Michael Singer.

The call will begin at 9am EST and will include an opportunity for investors to ask quesstions following the presentation.

Investors can register for Aurora’s earnings webcast here or take part in the call via telephone by calling (416) 849-0833 or (855) 859-2056. Use the reference number 6084057.

Today’s Price Action

Shares of ACB stock outperformed the majority of the sector today in anticipation of this evening’s earnings report. Aurora stock closed trading today at $8.51 per share, up 3.2% on the day. In afterhours trading on the U.S. side, shares of Aurora Cannabis are currently trading down 9.4% at $5.88 USD per share. It will be interesting to see how the stock reacts tomorrow as well as the rest of the sector.