How did Aurora Cannabis' revenue and expenses shift in Q3 2025?

Aurora Cannabis experienced significant growth in revenue and profitability in Q3 2025, driven primarily by its global medical cannabis division:

1. **Revenue Shift**:
- **Total Revenue**: Aurora Cannabis reported a 37% increase in total net revenue for Q3 2025, amounting to C$88.2 million. This growth was primarily fueled by a 51% rise in the global medical cannabis business and a 22% increase in the plant propagation business, although partially offset by a decline in consumer cannabis revenue.
- **International Medical Cannabis Revenue**: The medical cannabis segment saw a significant surge, with net revenue reaching C$68.1 million, a 51% increase year-over-year. Strong sales in international markets, particularly in Australia, Germany, Poland, and the UK, drove international medical cannabis revenue up by 112%. This segment now contributes 77% of Aurora’s consolidated net revenue and 90% of the adjusted gross profit before fair value adjustments.
- **Consumer Cannabis Revenue**: In contrast, consumer cannabis revenue decreased to C$9.9 million from C$11.6 million in the year-ago period, reflecting a 15% year-over-year decline. This decline was due to changes in sales mix and challenges in extracting value from high-quality products within the Canadian recreational cannabis segment.
2. **Expenses and Profitability**:
- **Cost Management**: Aurora Cannabis achieved a record adjusted gross margin of 65%, up from 53% in the prior year quarter, resulting in an adjusted gross profit of C$56.0 million, a 67% increase. The adjusted gross margin before fair value adjustments for medical cannabis reached 74%, up from 63% in the prior year quarter, driven by cost reductions, higher selling prices, and improved production efficiencies.
- **Net Income and EBITDA**: The company reported a record net income of C$31.2 million, compared to a net loss of C$18.1 million in the previous year. Additionally, adjusted EBITDA increased by 316% to C$23.1 million, up from C$5.5 million in the prior year quarter.
- **Free Cash Flow**: Aurora Cannabis generated positive free cash flow of C$27.4 million, a significant improvement from negative free cash flow of C$4.7 million in the previous year, marking a key profitability milestone.

In summary, Aurora Cannabis' Q3 2025 financial results showcased substantial growth in revenue, driven by strong international medical cannabis sales and improved operational efficiency. The company's focus on higher-margin medical cannabis sales and cost management contributed to significant profitability improvements, including record net income and adjusted EBITDA.