Canopy Growth 2025 Q4 Earnings Misses Targets as Net Loss Widens 139%

Canopy Growth (CGC) reported its fiscal 2025 Q4 earnings on May 30th, 2025. The company's financial results fell short of expectations, with a notable decline in revenue and a significant increase in net losses. Despite efforts to streamline operations and focus on profitability, Canopy Growth encountered challenges in international markets, impacting overall performance. The company maintained its guidance for improving its financial metrics, including positive adjusted EBITDA and free cash flow, while targeting cost reductions to bolster profitability. Management remains optimistic about future opportunities in the medical cannabis segment.

Revenue

The total revenue of Canopy Growth decreased by 10.7% to $65.03 million in 2025 Q4, down from $72.79 million in 2024 Q4.

Earnings/Net Income

Canopy Growth's losses deepened to $1.41 per share in 2025 Q4 from a loss of $1.01 per share in 2024 Q4 (39.5% wider loss). Meanwhile, the company's net loss widened to $-220.79 million in 2025 Q4, representing a 139.1% increase from the $-92.34 million loss recorded in 2024 Q4. Overall, the EPS performance was unfavorable.

Price Action

The stock price of Canopy Growth has tumbled 10.20% during the latest trading day, has plummeted 31.61% during the most recent full trading week, and has dropped 5.04% month-to-date.

Post-Earnings Price Action Review

The strategy of investing in CGC following a revenue miss and holding for 30 days proved detrimental, yielding substantial losses. This approach resulted in a -98.54% return, accompanied by a Sharpe Ratio of -0.55, indicating poor risk-adjusted returns. The strategy's maximum drawdown reached -99.48%, emphasizing its high risk and significant financial setbacks. With volatility at 126.04%, the investment was exceedingly unpredictable, leading to severe losses. Overall, the post-earnings price action strategy fared poorly, underlining the challenges of investing in Canopy Growth under current conditions.

CEO Commentary

Luc Mongeau, CEO of Canopy Growth, highlighted that the company possesses the essential elements to thrive in both the Canadian adult-use and global medical cannabis markets, despite challenges such as a lack of focus and inconsistent execution. He emphasized the importance of streamlining operations, stating, "We have started taking key steps to focus, streamline, and synchronize the organization." Mongeau mentioned a commitment to enhancing operational efficiency and reducing costs, aiming for "executional excellence" and financial flexibility. He expressed optimism regarding the growth potential in the medical cannabis segment, which saw a 13% increase in fiscal 2025, as well as confidence in the Canadian adult-use market, projecting significant opportunities for profitability.

Guidance

Canopy Growth expects to achieve positive adjusted EBITDA and generate positive free cash flow as key financial priorities. The company targets annualized operating expense reductions of at least $20 million over the next 12 to 18 months. In fiscal 2026, the focus will be on accelerating profitable growth, particularly in Canada, where the medical segment is projected to maintain strong momentum. The company anticipates improvements in free cash flow driven by reduced interest expenses, improved working capital management, and lower capital expenditures compared to fiscal 2025.

Additional News

Canopy Growth has been actively involved in strategic moves beyond its earnings report. Recently, the company announced a new US$200 million at-the-market equity program, allowing it to issue and sell common shares in concurrent offerings in the U.S. and Canada. The proceeds are intended for corporate investments, potential acquisitions, and debt repayment. In other developments, Canopy Growth launched its Tweed brand in the German medical cannabis market, collaborating with Portuguese cultivator Gro-Vida to introduce new strains. This move aligns with their strategy to enhance product availability in key international markets. Additionally, the company made an optional early prepayment of US$100 million on its senior secured term loan, aimed at reducing interest expenses and strengthening the balance sheet.