Tilray Brands (Nasdaq and TSX: TLRY) reported fiscal Q1 2027 net revenue of $257.1 million, up 23% year over year, while its GAAP diluted loss per share widened to $0.32 from a reported $0.00. Beverage growth following the BrewDog acquisition lifted revenue and gross margin, but higher operating expenses, weaker adjusted earnings and increased cash use limited the benefit.
Core Earnings Data
For the quarter ended August 31, 2026, Tilray generated record first-quarter revenue and gross profit. Gross profit grew faster than revenue, expanding gross margin by three percentage points to 30%.
That improvement did not extend to operating or net earnings. Total operating expenses increased 83% to $101.6 million, producing an operating loss of $24.1 million, while adjusted EBITDA declined 10%.
| Metric | Fiscal Q1 2027 | Fiscal Q1 2026 | Year-over-Year Change |
|---|---|---|---|
| Net revenue | $257.1 million | $209.5 million | +23% |
| Gross profit | $77.5 million | $57.5 million | +35% |
| Gross margin | 30% | 27% | +3 percentage points |
| Operating income (loss) | $(24.1) million | $2.1 million | Swung to a loss |
| Net income (loss) | $(40.0) million | $1.5 million | Swung to a loss |
| GAAP diluted EPS | $(0.32) | $(0.00) | Loss widened |
| Adjusted EPS | $(0.02) | $0.03 | Swung to a loss |
| Adjusted EBITDA | $9.2 million | $10.2 million | -10% |
| Free cash flow | $(27.4) million | $(10.6) million | Outflow widened by $16.9 million |
Adjusted EPS, adjusted EBITDA and free cash flow are non-GAAP measures. Prior-year share and per-share amounts were retrospectively adjusted for Tilray’s reverse stock split effective December 2, 2025.
Business and Segment Performance
Beverage was the primary growth engine, with revenue rising 82% following the BrewDog acquisition. Distribution also expanded, while cannabis revenue declined and wellness remained nearly unchanged.
| Segment | Fiscal Q1 2027 Revenue | Fiscal Q1 2026 Revenue | Change | Gross Margin |
|---|---|---|---|---|
| Beverage | $101.5 million | $55.7 million | +82% | 41%, up from 38% |
| Cannabis | $56.1 million | $64.5 million | About -13% | 39%, up from 36% |
| Distribution | $84.3 million | $74.0 million | +14% | 11%, unchanged |
| Wellness | $15.3 million | $15.2 million | Broadly flat | 29%, down from 32% |
Beverage accounted for 39% of total revenue, up from 27% a year earlier. Its gross profit nearly doubled to $42.0 million, and Tilray said BrewDog achieved profitability during the quarter, although it did not provide a separate profit figure.
Cannabis presented a mixed picture. Canadian adult-use revenue before excise taxes declined to $53.6 million from $64.1 million, while wholesale cannabis revenue fell to $0.7 million from $4.2 million. International cannabis revenue increased to $16.2 million from $13.4 million, partially offsetting the Canadian pressure. At the broader regional level, Tilray reported 71% EMEA revenue growth led by medical cannabis, beverages and pharmaceutical distribution.
Distribution revenue increased 14%, but its 11% gross margin remained well below the margins of the beverage and cannabis businesses. Wellness revenue was essentially flat, while its gross margin contracted by three percentage points.
Beverage-Led Growth Did Not Flow Through to Operating Earnings
Tilray added $20.0 million of gross profit year over year, but total operating expenses increased by $46.2 million. General and administrative costs rose 40% to $57.6 million, marketing and promotion increased 55% to $15.7 million, and transaction costs climbed to $4.8 million from $0.4 million. Restructuring and amortization expenses also increased.
The comparison was additionally affected by a $15.0 million benefit from a change in the fair value of contingent consideration in the prior-year quarter, with no corresponding benefit this quarter. Below the operating line, Tilray recorded $7.8 million of non-operating expense, compared with $3.8 million of non-operating income a year earlier.
The adjusted results also weakened, although less dramatically. Adjusted EBITDA declined by approximately $1.0 million to $9.2 million, with the company citing about $1.7 million of global fuel surcharges. Adjusted net income moved from a $3.4 million profit to a $3.0 million loss.
Cash Flow and Balance Sheet
Operating cash outflow widened to $16.5 million from $1.3 million. Inventory absorbed $27.8 million of cash during the quarter, while higher accounts payable and accrued liabilities provided a $20.4 million offset. After capital and intangible-asset investment, free cash outflow reached $27.4 million.
Inventory increased to $329.0 million at August 31 from $301.2 million at the end of May. Tilray finished the quarter with $221.4 million of cash, restricted cash and marketable securities, a company-defined non-GAAP liquidity measure. It also reported reducing outstanding debt by $42 million during the fiscal year to date and ending the quarter in a net cash position.
Financing activities provided $14.0 million of cash, including $22.3 million from share issuance, partly offset by debt and lease repayments. Cash and cash equivalents decreased by $11.0 million during the quarter to $215.0 million.
Fiscal 2027 Guidance
Tilray reaffirmed its fiscal 2027 adjusted EBITDA target rather than raising or lowering it. Because fiscal Q1 adjusted EBITDA was $9.2 million, most of the full-year target remains dependent on later quarters; management said results are historically weighted toward the second half and strengthen significantly in the fourth quarter.
| Metric | Latest Guidance | Previous Guidance | Change |
|---|---|---|---|
| Fiscal 2027 adjusted EBITDA | $68 million to $75 million | $68 million to $75 million | Reaffirmed |
The guidance covers the fiscal year ending May 31, 2027 and excludes items such as stock-based compensation, restructuring, transaction costs, impairments and certain non-operating items.
Management View
Management emphasized that Tilray’s broader mix of cannabis, beverage, wellness and pharmaceutical distribution businesses reduces its dependence on a single market. It also highlighted operating integration, BrewDog’s reported first-quarter profitability and the planned start of U.S. production and sales of Carlsberg brands on January 1, 2027. No quantified revenue or profit contribution was provided for the Carlsberg arrangement.
Risks Investors Need to Watch
- Back-loaded guidance: Management expects results to be weighted toward the second half, particularly the fourth quarter, increasing the importance of execution later in the fiscal year.
- Acquisition-driven beverage growth: Much of the beverage revenue increase reflected the BrewDog acquisition. Transaction costs also rose substantially, making integration and profitability important measures of the acquisition’s value.
- Continued cannabis pressure: Lower Canadian adult-use and wholesale revenue outweighed international cannabis growth, even as the segment’s gross margin improved.
- Weak cash conversion: Operating and free cash outflows widened, while inventory increased by $27.8 million during the quarter.
- Revenue-profit divergence: Gross margin improved, but higher operating expenses and non-operating costs produced a sizable GAAP loss and lower adjusted EBITDA.
Summary
Tilray’s fiscal Q1 2027 results showed that its expanded beverage platform can drive substantial revenue and gross-profit growth, while international operations helped diversify the business. However, higher costs, declining Canadian cannabis revenue and increased cash use prevented that growth from translating into stronger earnings. The main issues to monitor are BrewDog integration, inventory and cash conversion, expense control, and the company’s ability to deliver its back-half-weighted adjusted EBITDA guidance.
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