SMITHS FALLS, ON – Canopy Growth Corporation released its financial results for the third fiscal quarter ended December 31, 2024 (“Q3 FY2025”). All financial information is reported in Canadian dollars unless otherwise indicated.
“Canopy Growth’s third quarter highlights that our business has the right ingredients for success, as demonstrated by the continued momentum in our medical cannabis businesses, Storz & Bickel, and the successful introduction of Claybourne infused pre-rolls in Canada. As I step into my role as Chief Executive Officer, I am focused on achieving sustainable profitability while maximizing our ability to create value in the key markets and segments we serve,” said Luc Mongeau, chief executive officer
“The third quarter marked our best Adjusted EBITDA to date, led by strong year-over-year top-line growth in our medical cannabis business and Storz & Bickel, and continued cost discipline. The balance sheet actions taken during the quarter further strengthen our financial position which we believe provides us with flexibility to invest in value creation opportunities,” said Judy Hong, chief financial officer
Third quarter fiscal Year 2025 ffinancial summary
Net revenue in Q3 FY2025 decreased 5% compared to the third quarter ended December 31, 2023 (“Q3 FY2024”). Excluding net revenue from businesses divested during the prior fiscal year, net revenue increased 8% driven primarily by growth in Canada medical, international markets and Storz & Bickel.
Gross margin decreased by 400 basis points (“bps”) to 32% in Q3 FY2025 compared to Q3 FY2024 primarily due to the incremental costs related to the Claybourne infused pre-roll launch in Canada, and an increase in indirect costs of Storz & Bickel vaporizer devices partially offset by stronger sales of higher-margin medical cannabis products.
Operating loss from continuing operations was $24MM in Q3 FY2025, representing an improvement of 61% compared to Q3 FY2024. The improvement in Q3 FY2025 was driven primarily by a reduction in operating expenses.
Adjusted EBITDA loss of $3MM in Q3 FY2025, representing a 61% improvement year-over-year, driven primarily by the realized benefit of the Company’s cost savings program.
Free cash flow was an outflow of $28MM in Q3 FY2025, representing a 17% improvement compared to Q3 FY2024, primarily driven by a reduction in cash interest expenses.
Total debt decreased to $442MM at December 31, 2024 from $554MM at September 30, 2024 primarily due to an early prepayment that reduced the Company’s senior secured term loan.
Canada cannabis highlights
Canada cannabis net revenue was $41MM in Q3 FY2025, representing an increase of 1% compared to Q3 FY2024. Canada cannabis net revenue in Q3 FY2025 increased 10% sequentially compared to the second fiscal quarter ended September 30, 2024 (“Q2 FY2025”).
Canada medical cannabis net revenue in Q3 FY2025 increased 16% compared to Q3 FY2024 driven primarily by an increase in the average size of medical orders placed by our customers.
Canada adult-use cannabis net revenue in Q3 FY2025 declined 10% compared to Q3 FY2024. Canada adult-use cannabis net revenue in Q3 FY2025 increased 15% sequentially compared to Q2 FY2025 driven by contributions from new product launches as well as bulk cannabis sales.
The Company launched the award-winning Claybourne brand in November 2024. Claybourne ascended to #3 market share in the infused pre-roll category in British Columbia and Ontario after 6 weeks in market.
International markets highlights
International markets net revenue was $12MM in Q3 FY2025, representing an increase of 14% over Q3 FY2024, with strong growth in Poland and Germany, partially offset by a decline in Australia medical cannabis sales as well as exiting US CBD sales earlier this fiscal year.
Performance in the German medical market in Q3 FY2025 benefited from expansion of the product portfolio available to patients including new flower under the Tweed brand.
International markets cannabis gross margins increased 100 bps to 41% during Q3 FY2025 compared to Q3 FY2024 primarily due to a shift in sales mix to higher-margin Poland.
Storz & Bickel highlights
Storz & Bickel delivered net revenue in Q3 FY2025 of $22MM, representing a 19% increase over Q3 FY2024, driven by traditionally strong holiday purchases, robust direct-to-consumer online sales, and continued growth in Germany.
Continued consumer demand drove strong year-over-year growth for Venty during Q3 FY2025.
Canopy USA highlights
With the completed acquisition of Acreage Holdings Inc. by Canopy USA LLC on December 9, 2024, Canopy USA has moved forward with the full integration of Mountain High Products LLC, Wana Wellnes, LLC and The Cima Group LLC (collectively, “Wana”), Lemurian Inc. (“Jetty”), and Acreage, with such integration beginning to generate cost savings at Canopy USA.
In January 2025, Canopy USA named Brooks Jorgensen as President. Mr. Jorgensen is an accomplished executive in high‑growth industries including cannabis, wine, and spirits. Most recently, Mr. Jorgensen served as President of Kiva Sales and Service, growing it to the largest full-service distributor of cannabis products in the U.S.
Third quarter fiscal 2025 revenue review
The Q3 FY2025 and Q3 FY2024 financial results presented in this press release have been prepared in accordance with U.S. GAAP.
About Canopy Growth
Canopy Growth is a world leading cannabis company dedicated to unleashing the power of cannabis to improve lives. Canopy Growth delivers products from owned and licensed brands including Tweed, 7ACRES, DOJA, Deep Space, and Claybourne, as well as category defining vaporization devices by Storz & Bickel. In addition, Canopy Growth serves medical cannabis patients globally with principal operations in Canada, Germany, Poland, and Australia.
