Why Aurora Cannabis Looks Cheaper Than Its International Growth Suggests – Quarterly Update Report

International medical cannabis revenue increased 17% to C$43.3 million in 1Q FY27, reinforcing ACB's leadership across global medical markets.

Adjusted gross margin reached 58%, the high end of FY27 guidance, despite the full initial impact of the ~30% Canadian reimbursement cut.

Safari contributed positively to adjusted EBITDA in its first quarter, while three-year EU-GMP certification expands internal supply for high-margin international markets.

Management expects higher 2Q revenue and adjusted EBITDA, while Street estimates point to FY28 growth and positive FCF as international scale and efficiencies build.

Valuation remains attractive at 0.92x FY27E P/S and 4.95x FY27E EV/EBITDA despite strengthening international fundamentals and a debt-free balance sheet.

International medical cannabis growth continued to strengthen ACB's global medical-first platform and reinforce the durability of its growth strategy . ACB reported 1Q FY27 (q/e June 30, 2026) net revenue of C$67.6 million, down 9% from C$74.1 million in the prior-year period and down 20% sequentially from C$84.8 million in 4Q FY26. The decline was principally attributable to the April 1 reduction in Canadian federal medical reimbursement rates and the planned wind-down of the consumer cannabis business rather than weakening international demand. Medical cannabis revenue was broadly stable at C$64.0 million versus C$64.8 million y/y, as a C$6.2 million increase in International medical revenue offset C$7.0 million of Canadian medical pressure. Medical cannabis represented approximately 95% of consolidated net revenue, up from 87% in the prior-year quarter and 91% in 4Q FY26, demonstrating that the Bevo divestiture and consumer wind-down have substantially advanced ACB's transition into a focused global medical cannabis company.

International medical cannabis remained the primary growth engine, increasing 17% to C$43.3 million from C$37.1 million, driven by higher sales in Germany . International medical revenue represented 64% of total net revenue compared with approximately 50% in the prior-year period and 58% in 4Q FY26, reflecting both organic growth abroad and the contraction of lower-return Canadian channels. Germany remained ACB's largest and fastest-growing international market, supported by increased patient demand, two proprietary cultivars ranking among the five highest-selling products, and continued strength in the core and premium price tiers. Pricing pressure remains concentrated in the value segment, while core and premium pricing has held relatively well because increasingly stringent GMP requirements constrain qualified supply. ACB has responded by selectively expanding its value offering without abandoning the core and premium categories that comprise most of its German volume.

Strong operating discipline kept adjusted EBITDA positive despite the full initial impact of the Canadian reimbursement reset. Adjusted EBITDA was C$3.4 million, down 68% from C$10.8 million y/y and 63% from C$9.2 million in 4Q FY26, with the adjusted EBITDA margin declining to 5.1% from 14.6% a year ago and 10.8% sequentially. The C$7.4 million y/y decline primarily reflected an C$8.3 million reduction in adjusted gross profit, partly offset by C$1.0 million of adjusted SG&A savings. Adjusted SG&A declined 3% to C$35.1 million from C$36.1 million, as lower general and administrative spending more than offset an 8% increase in sales and marketing to C$15.6 million. The higher selling investment was directed toward international growth markets, while the broader cost base remained controlled through the transition.