Tilray BrandsTLRY

The company finished its fiscal year with record revenue of $915 million. While it reported a larger-than-expected loss per share of 43 cents, the underlying business is showing signs of progress. Sales from international medical cannabis grew 34 percent, which helps offset the difficult and crowded market in Canada.

For the upcoming year, management expects adjusted EBITDA, a measure of profit that excludes certain one-time costs, to be between $68 million and $75 million. The company is leaning heavily into its beverage business, including the recent BrewDog acquisition, to provide steadier cash flow while it waits for wider cannabis legalization. With about $235 million in cash and very little net debt, the business has enough of a cushion to continue this transition.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Beverage business scaling fast: Drink sales grew 61% to $105.6 million this quarter, making it the company's largest division by revenue. The segment now accounts for 38% of total sales, up from 29% a year ago, as the company buys brands like BrewDog to move beyond its roots in the cannabis market.
• International medical cannabis momentum: Revenue from medical cannabis outside North America rose 34% for the full year, helping the company establish a distribution network across Europe. This growth is critical as it offsets a flatter performance in the Canadian adult-use market, where annual revenue grew just 5.5% to $236.4 million.
• Beverage margins rebounding: Gross margins for the drink division reached 38% in the fourth quarter, staying level with last year and showing a recovery from the 32% reported in the previous quarter. Maintaining these profit levels on each dollar of sales is key as the company integrates its recent craft beer acquisitions.
• Balance sheet strength: The company ended the year with $235 million in cash and marketable securities while reducing its net debt, which is total debt minus cash, to $0.7 million. This financial cushion provides the flexibility to invest in the U.S. market if federal regulations for cannabis are loosened as expected.
• Guidance for growth ahead: Management expects adjusted EBITDA, a measure of core operating profit, to reach between $68 million and $75 million for the 2027 fiscal year. This target represents a double-digit increase over the $61.1 million the company earned on that same basis this year.

Our take: A strong finish to the year that proves the pivot to beverages is working. Rapid 61% growth in the drink business is successfully transforming Tilray into a diversified consumer goods company rather than a pure cannabis play. This shift stabilizes the business and makes the long-term case much more predictable.