Tilray's Beverage Mix Flips as BrewDog Turns Profitable
First-quarter net revenue reached a record $257.1 million, up 23% from a year earlier, as gross margin expanded to 30%.
Tilray Brands (TLRY), a global lifestyle and consumer packaged goods company, reported record first-quarter net revenue of $257.1 million for the three months ended August 31, 2026, up 23% from $209.5 million a year earlier. Gross profit rose 35% to $77.5 million and gross margin expanded to 30% from 27%.
The mix of the business shifted. Beverage became the largest reportable segment at 39% of net revenue, compared with 27% a year earlier, after the BrewDog acquisition. Cannabis fell to 22% of the total from 31%. Distribution accounted for 33% and wellness 6%.
Beverage net revenue increased 82% to $101.5 million from $55.7 million, reflecting the acquisition of BrewDog. Beverage gross profit rose to $42.0 million from $21.3 million, and beverage gross margin expanded to 41% from 38%. The company said BrewDog achieved profitability in the first quarter.
Cannabis net revenue was $56.1 million, compared with $64.5 million a year earlier. Cannabis gross profit was $22.0 million and cannabis gross margin expanded to 39% from 36%. International cannabis revenue was $16.2 million, or 29% of cannabis net revenue, compared with $13.4 million, or 21%, in the year-ago quarter. Canadian adult-use cannabis revenue was $53.6 million, Canadian medical cannabis $4.7 million, and wholesale cannabis $0.7 million. Excise taxes were $19.1 million.
Distribution net revenue increased 14% to $84.3 million from $74.0 million. Distribution gross profit was $9.1 million and distribution gross margin was 11%. Wellness net revenue was $15.3 million, consistent with the previous year's period. Wellness gross profit was $4.4 million and wellness gross margin was 29%.
EMEA revenue increased 71%, with growth led by medical cannabis, beverage and pharmaceutical distribution. Chairman and Chief Executive Officer Irwin D. Simon said the quarter demonstrated the diversified platform across cannabis, beverage, hospitality, wellness and pharmaceutical distribution.
Net loss was $40.0 million, or $0.32 a share, driven predominantly by non-cash charges. Adjusted net loss was $3.0 million, or $0.02 a share. Operating income swung to a $24.1 million loss from $2.1 million of operating income a year earlier. General and administrative expenses increased 40% to $57.6 million from $41.1 million. Marketing and promotion increased 55% to $15.7 million. Amortization increased 65% to $6.5 million. Transaction costs, net, increased to $4.8 million from $0.4 million. Restructuring costs increased to $2.4 million from $0.9 million. Selling expenses increased 5% to $13.6 million. The change in fair value of contingent consideration was nil versus a $15.0 million gain a year earlier.
Adjusted EBITDA was $9.2 million compared with $10.2 million, burdened by approximately $1.7 million of global fuel surcharges in this quarter. Net cash used in operating activities was $16.5 million versus $1.3 million used a year earlier. Inventory consumed $27.8 million of cash versus $11.9 million a year earlier. Accounts payable and accrued liabilities provided $20.4 million versus a $5.1 million use a year earlier.
Cash, restricted cash and marketable securities were $221.4 million at the end of the first quarter. Fiscal year to date, Tilray reduced total outstanding debt by $42 million. Convertible debentures payable were nil at August 31, 2026, versus $79.5 million at May 31, 2026, with $59.2 million reclassified to the current portion. Cash and cash equivalents were $215.0 million at August 31, 2026, versus $226.0 million at May 31, 2026. Inventory was $329.0 million versus $301.2 million.
For the fiscal year ending May 31, 2027, the company reaffirmed its expectation to achieve adjusted EBITDA of $68 million to $75 million, representing double-digit growth compared with fiscal year 2026. Historically, due to the seasonality of the business, financial results are typically more weighted toward the second half of the fiscal year, with results strengthening significantly in the fourth quarter.