Tilray Brands Q2 Earnings Call Highlights

08 Jan 2026, 23:38 by Danessa Lincoln · The Markets Daily

Tilray Brands (NASDAQ:TLRY) executives said the company delivered record second-quarter fiscal 2026 revenue and pointed to improving performance across its global cannabis and European distribution businesses, while acknowledging continued pressure in its U.S. craft beer portfolio. The company reported results for the quarter ended Nov. 30, 2025.

Record quarterly revenue and improved cash flow metrics

Chairman and CEO Irwin Simon said the quarter was “marked by record results,” with Tilray posting its highest-ever second-quarter net revenue and a “meaningful year-over-year improvement” in net income and free cash flow. Tilray reported net revenue of $218 million in prepared remarks, while CFO Carl Merton cited net revenue of $217.5 million for the quarter.

Tilray reported adjusted EBITDA of $8.4 million and an EPS loss of $0.02 (reverse stock split adjusted). Merton said net loss was $43.5 million, a 49% improvement from a $85.3 million loss in the prior year period, and that the company’s cash flow used in operations improved to $8.5 million from $40.7 million a year ago, largely due to working capital reductions.

The company ended the quarter with $291.6 million in cash and marketable securities, plus $0.8 million in digital assets, and moved from a net debt position in the prior quarter to a net cash position of almost $30 million, according to Merton. Simon said Tilray reduced debt by about $4 million during the quarter and ended with a net cash position “exceeding our debt by almost $30 million.”

Cannabis: international growth offsets market headwinds

Tilray’s global cannabis revenue rose to about $68 million, driven by international expansion and Canadian adult-use growth. Simon said international cannabis revenue increased 36% year-over-year and 51% sequentially to $20 million, despite “permit challenges, regulatory transitions in Portugal and Germany, and continued price compression, especially in flower.”

Merton said the company viewed the growth as evidence that prior-quarter international results were temporarily affected by import and export permit timing, adding that the company intentionally scaled back supply into Canada’s lower-priced wholesale market to redeploy inventory into higher-margin European markets over the remainder of the year.

In Canada, Simon said adult-use and medical channel sales net of excise tax grew to $46 million, with recreational cannabis up 6% in the quarter. In response to analyst questions, Simon said the growth was not driven by price and noted a British Columbia strike that “ultimately hurt us,” while adding Tilray gained “a little bit of share” and posted its highest quarterly unit volume in two years with more than 5.5 million units shipped.

Simon also highlighted product and capacity developments in Canada, including:

Launch of Redecan “Live Resin Liquid Diamond” vapes and entry into Quebec’s vape market with Good Supply, which he said reached a top-three SKU position in the province.
Completion of the first harvest from a restarted outdoor grow in Cayuga, Ontario, which he said exceeded expectations on THC content and raised cultivation capacity to 200 metric tons annually.
A stated focus on margin-accretive participation in categories such as vapes and infused pre-rolls, alongside leadership positions in dried flower, non-infused pre-rolls, beverages, oils, and chocolate edibles.

On long-term Canadian market growth expectations, Simon said he would be “very, very happy” with mid- to high-single-digit growth, emphasizing a shift toward profitable product mix rather than selling “tons of wholesale product.”

Tilray Pharma distribution: record quarter and expansion plans

Tilray’s European distribution business, referred to as Tilray Pharma, posted what management called its biggest quarter ever. Simon said revenue grew 26% year-over-year and 15% sequentially to $85 million, and Merton reported distribution net revenue of $85.3 million. Executives attributed the increase to competitive pricing, portfolio optimization, increased focus on medical device sales, buying power on medicines, and foreign exchange impacts.

Simon said the company is using its pharmacy distribution platform and sales organization to expand medical cannabis reach in Germany, with an expectation to triple its medical cannabis distribution footprint in fiscal 2026. He also said Tilray has modernized the business with technology investments and labor cost reductions, and that tighter German rules requiring patients to visit pharmacies could create incremental opportunity for the company’s pharmacy-based model.

Asked whether Tilray Pharma might distribute competitors’ medical cannabis products, Simon said it was not something the company had pursued, but called it “something we definitely should look at,” noting the company is “in the business to sell and make profit.”

Beverage: cost-savings progress amid category headwinds

Tilray’s beverage revenue was $50 million in the quarter, with Merton reporting beverage net revenue of $50.1 million. Management said the segment faced craft-beer category headwinds and impacts from Tilray’s own SKU rationalization and margin initiatives under “Project 420.”

Simon said Tilray delivered $27 million in annualized cost savings in the first half of the year and remains on track for a $33 million target. Merton said Tilray expects to achieve $33 million in annualized savings by the fourth quarter of fiscal 2026.

While management said spring retailer “product resets” should improve brand visibility and product mix, Simon emphasized the company is not relying solely on resets and is also focused on gaining share in convenience stores and on-premise accounts. He defended the strategic rationale for the beverage portfolio as part of a diversified consumer packaged goods model and reiterated Tilray’s view that its beverage infrastructure could be an advantage if THC drinks become federally legal in the U.S., noting Tilray’s stated 45% share of Canada’s THC beverage market.

On hemp-derived THC beverages, Simon said Tilray is working with lawmakers, lobbyists, and industry associations to influence a better regulatory outcome, including potential extensions or regulated milligram limits. He added that job losses would be a concern if restrictive rules are implemented.

Merton reaffirmed Tilray’s full-year fiscal 2026 adjusted EBITDA guidance of $62 million to $72 million, while executives repeatedly pointed to liquidity and balance sheet flexibility as strategic advantages in a shifting regulatory environment.

About Tilray Brands (NASDAQ:TLRY)

Tilray Brands, Inc is a global cannabis-lifestyle and consumer packaged goods company engaged in the cultivation, production, distribution and sale of cannabis and cannabinoid-based products. The company develops and markets a diverse portfolio of branded products spanning medical cannabis, adult-use recreational products and wellness offerings. Through state-of-the-art cultivation facilities, research and development efforts, and quality control systems, Tilray Brands aims to deliver consistent, scalable products for a range of patient and consumer needs.