How did Canopy Growth's revenue and expenses trend in Q3 2025?

Canopy Growth Corporation's revenue and expenses in Q3 2025 showed a continued focus on cost management and strategic growth initiatives. 1. **Revenue Trends**: - Canopy Growth's net revenue for Q3 FY2025 was $41 million, marking a 1% increase from the same quarter in the previous year. - The medical cannabis business, Storz & Bickel, and the international cannabis market showed notable growth with year-over-year increases of 16% and 14%, respectively. - The successful launch of Claybourne infused pre-rolls in Canada contributed to the company's revenue growth, with Claybourne achieving the third-highest market share in the infused pre-roll category in British Columbia and Ontario after just six weeks in the market. 2. **Expense Management**: - Despite the revenue growth, Canopy Growth continued to focus on cost discipline, as evidenced by the improvement in gross margin percentage to 32% in Q3 FY2025, compared to the previous year's 5%. - The company's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached its best level to date, primarily driven by strong top-line growth in medical cannabis and Storz & Bickel, along with continued cost control measures. - Free cash flow improved significantly, showing Canopy Growth's ability to generate cash after capital expenditures, which is crucial for investment in growth opportunities and debt reduction. 3. **Challenges and Legal Issues**: - Canopy Growth faced legal challenges with a securities class action lawsuit being filed against the company and certain officers. The lawsuit alleges that Canopy Growth misled investors about the costs associated with the Claybourne product launch and the impact on gross margins. - The company's focus on innovation and market segmentation, as seen with the launch of new product formats in Canada's adult-use market, suggests a strategic approach to maintaining competitiveness. In conclusion, Canopy Growth demonstrated a positive revenue trend with strong performance in specific segments, while maintaining a focus on cost management and operational efficiency. However, the company must navigate ongoing legal challenges that could impact investor confidence and financial performance.