How did Tilray's revenue and expenses shift in Q2 2025?

Tilray's financial performance in Q2 2025 was characterized by a decline in cannabis sales, but strong growth in its beverage and distribution segments, along with increased gross profit and strategic adjustments to margin dilutive categories.

1. **Revenue Shift**:
- **Total Revenue**: Tilray reported a net revenue of $185.78 million for Q3 2025, a slight decrease of 1.4% compared to the same period in the previous year.
- **Cannabis Business**: The cannabis segment contributed $54.27 million to the revenue, marking a 14.4% decrease from the previous year. This decline was due to a reduction in Canadian medical cannabis sales, which fell from $63.4 million to $5.8 million, and a decrease in wholesale cannabis sales from $65.7 million to $3.9 million. However, international cannabis sales increased, partly offsetting the domestic decline.
- **Other Segments**: The beverage business revenue rose by 2.3% to $55.92 million, while the distribution business saw an 8.3% increase to $61.49 million. The wellness business also showed growth, with a 5% year-over-year increase in revenue to $14.09 million.

|code|Ticker|Name|Date|Cost of Goods Sold|R&D Expenses|Total Revenue|market_code|
|---|---|---|---|---|---|---|---|
|TLRY|TLRY.O|Tilray Brands|2024 Q3|1.38944E8|106000|1.8834E8|185|
|TLRY|TLRY.O|Tilray Brands|2024 Q4|1.47532E8|394000|2.29882E8|185|
|TLRY|TLRY.O|Tilray Brands|2025 Q1|1.40338E8|105000|2.00044E8|185|
|TLRY|TLRY.O|Tilray Brands|2025 Q2|1.4973E8|60000|2.1095E8|185|

|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|TLRY|TLRY.O|Tilray Brands|2024 Q3|91.22033665843755|-1.04983E8|185|
|TLRY|TLRY.O|Tilray Brands|2024 Q4|87.16814528580609|-1.5375E7|185|
|TLRY|TLRY.O|Tilray Brands|2025 Q1|37.969675814045075|-3.4652E7|185|
|TLRY|TLRY.O|Tilray Brands|2025 Q2|-84.64586536171318|-8.5275E7|185|

2. **Expense and Profitability**:
- Tilray's gross profit for Q3 2025 was $52 million, representing a 5% increase from the previous year. Despite the increase in gross profit, the company reported a comprehensive loss of $799 million, primarily due to significant expenses and a negative net margin of 30.95%.
- The company's strategic decision to pause its presence in certain low-margin categories, such as vapes and infused pre-rolls, helped prevent a potential loss exceeding $3 million while decreasing revenue by $4 million.
3. **Market Position and Future Outlook**: Tilray's international cannabis sales and premium product focus in Canada contributed to its highest gross margin in nearly two years. Wall Street analysts project an average price target of $1.34 for Tilray, suggesting substantial growth potential. The GF Value estimate for Tilray indicates a remarkable upside potential of 303.53% from the current price.

In conclusion, Tilray's revenue in Q2 2025 was influenced by a decline in cannabis sales, particularly in the Canadian medical and wholesale categories, but was offset by growth in its beverage and distribution segments. The company's strategic adjustments and focus on higher-margin products and markets position it for potential future profitability.