Tilray Brands (NASDAQ:TLRY) reported record third-quarter fiscal 2026 revenue and reaffirmed its full-year adjusted EBITDA outlook, as management pointed to accelerating international cannabis growth, continued progress in its European distribution business, and cost-saving efforts in beverages ahead of recently announced strategic moves involving Carlsberg and BrewDog.
Record quarterly revenue as international cannabis drives growth
Chairman and CEO Irwin Simon said the company posted “record results” in the third quarter, with net revenue reaching $207 million and gross profit increasing to $55 million despite “ongoing industry and macroeconomic headwinds.” CFO Carl Merton reported net revenue of $206.7 million, up 11% year-over-year, and said the quarter produced “strong year-over-year improvements in gross profit and adjusted EBITDA.”
Germany, Tilray’s largest international market, grew 43% year-over-year, according to Simon, who said the business overcame roughly $7 million in price pressure that “flows directly to the bottom line.” Merton also cited price compression, noting that international pricing reduced international cannabis revenue by about $7 million despite higher gram equivalents sold.
Europe distribution business grows, supported by partnerships and SKU focus
Tilray’s European distribution segment expanded meaningfully during the quarter. Simon said Tilray Pharma revenue grew 35% year-over-year to $83 million, marking its “highest ever third quarter for sales and profitability,” driven by portfolio optimization, mix, positive market trends, and increased medical device sales. Merton similarly reported distribution net revenue increased 35% to $83 million, aided by a focus on higher-velocity and higher-margin SKUs and favorable foreign exchange impacts.
Management highlighted new and expanded partnerships aimed at broadening reach. Simon said an agreement with Alliance Healthcare expands pharmacy reach in Germany to more than 16,000 pharmacies from 13,000 previously, and a partnership with Smartway is intended to expand pharmaceutical product availability in the U.K.
During Q&A, President and Managing Director International Rajnish Ohri described efforts at CC Pharma to prioritize approximately 50 top SKUs from a broader base of roughly 2,800 SKUs, focusing on both velocity and gross margin. Ohri said adding medical cannabis products is helping improve both revenue and margins, and he noted automation in purchasing systems to improve decision-making and support pricing pattern predictions.
Canadian cannabis leadership maintained; cultivation modernization underway
In Canada, Simon said Tilray maintained its position as the country’s leading cannabis company by revenue on a trailing twelve-month basis. He reported Canadian adult-use and medical net revenue grew 8% year-over-year to “almost $40 million,” and said Tilray held the No. 1 market share position in dried flower, pre-rolls, beverages, oils, and chocolate edibles.
Simon highlighted brand and product performance, including Broken Coast’s strongest quarter in the past two fiscal years, up 16% year-over-year. He also cited new strain launches and the introduction of a new brand, Portal, featuring vapes and infused pre-rolls, which began a national rollout late in the quarter.
Management also discussed operational initiatives designed to improve yield and efficiency. Simon said Tilray is transforming its cultivation platform through “AI-driven growing systems, next-generation genetics, and improved yields,” describing an “end-to-end upgrade” that is underway. In response to analyst questions about balancing Canadian and international supply, Simon said Tilray expects increased capacity as it brings on its Maison facility in Gatineau, Quebec, and outdoor cultivation in Cayuga, while citing strong yields from facilities in Portugal and Germany. He emphasized the importance of consistent supply in Europe and said permitting timelines in Portugal have improved significantly.
Beverage results reflect restructuring; Carlsberg partnership and BrewDog acquisition framed as strategic accelerants
Beverage net revenue declined year-over-year, reflecting the company’s margin-focused actions and industry softness. Simon said beverage net revenue was $43 million in the quarter and was impacted by deliberate initiatives intended “to reset the business for profitable long-term growth.” Merton reported beverage net revenue of $42.6 million compared to $55.9 million in the prior-year quarter.
Management pointed to Project Four Twenty as a key driver of cost reduction. Simon said Tilray delivered more than $6.2 million in annualized savings during the quarter and completed a target synergy program totaling $33 million. Merton said the company “successfully completed Project Four Twenty” and that the savings helped improve the underlying cost structure, though he added that margin benefits have been offset by higher aluminum costs and lower overhead utilization.
Gross margin in the beverage segment was 32% versus 36% a year ago, which Merton attributed to lower overhead absorption and higher input costs, including aluminum. During Q&A, Merton said Tilray is hedging 65% to 75% of its aluminum purchases on a month-to-month basis, a year out. When asked about beverage profitability, Merton said current margins represent “the bottom” and that improving overhead utilization is central to recovery, while noting potential headwinds such as fuel surcharges.
After the quarter, Tilray announced a licensing partnership with Carlsberg set to begin in January 2027. Simon said the partnership will allow Tilray to “produce, market, and distribute” Carlsberg brands in the U.S., leveraging Tilray’s brewing network and distribution footprint. Merton described the arrangement as a way to improve overhead utilization “without deploying capital to acquire a brand,” while creating operational leverage and supplier scale.
Tilray also acquired BrewDog after quarter-end, a deal Simon said positions Tilray as an approximately $1.2 billion global revenue company on an annualized basis. Simon said Tilray acquired BrewDog’s global IP and certain brewing and brewpub assets across the U.K., Ireland, Australia, and the U.S. for approximately GBP 40 million, calling it “a fraction of its replacement cost.” In response to an analyst question, Simon said Tilray took on roughly $225 million to $250 million in BrewDog sales tied to the acquired assets.
Profitability, cash position, and guidance reaffirmation
Merton said Tilray delivered a record third-quarter gross profit of $55 million, up 6% year-over-year, with consolidated gross margin of 27% compared to 28% a year earlier. By segment, cannabis gross margin was 40%, distribution rose to 12% from 9%, beverage was 32%, and wellness was 33%.
Net loss was $25.2 million, a substantial improvement from a $793.5 million loss in the prior-year quarter, which Merton said was primarily driven by a one-time non-cash impairment recorded last year. Adjusted net income improved to $2.4 million, or $0.02 per share, and adjusted EBITDA increased 19% to $10.7 million.
Tilray ended the quarter with $264.8 million in cash, restricted cash, and marketable securities, and a net cash position of $3.5 million. Operating cash flow used was $21.9 million, which Merton attributed largely to inventory build ahead of a seasonally stronger fourth quarter and higher accounts receivable tied to international cannabis growth; excluding working capital impacts, Tilray generated $3.4 million in operating cash flow.
Merton said the company reaffirmed fiscal 2026 adjusted EBITDA guidance of $62 million to $72 million.
- Q3 net revenue: $206.7 million (up 11% year-over-year)
- Q3 gross profit: $55 million (up 6% year-over-year)
- Q3 adjusted EBITDA: $10.7 million (up 19% year-over-year)
- Cash, restricted cash, and marketable securities: $264.8 million
- FY2026 adjusted EBITDA guidance reaffirmed: $62 million to $72 million
In closing remarks, Simon said Tilray is focused on further modernizing its Canadian cultivation operations, stabilizing and scaling its beverage platform, and expanding its international cannabis and pharmaceutical distribution capabilities amid ongoing regulatory complexity across markets.
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.
Tilray’s product lineup includes cannabis flower, pre-rolls, oils and tinctures, vapes, edibles and topicals, as well as hemp-derived cannabidiol (CBD) products.
