Canopy Growth Stock Earnings Reports

Canopy Growth reported strong top-line momentum in Q1 FY2026 with consolidated cannabis net revenue up 24% year-over-year driven by a 43% increase in Canada adult-use and 13% growth in Canada medical. International sales returned to growth (+4%) with Germany showing triple-digit growth; Europe benefits from bulk sales and operational fixes expected to complete by Q3. Storz & Bickel revenue declined 25% due to macro softness and lapping a strong prior year, but a new device launch is expected to help H2 performance. Management has delivered $17 million of annualized cost savings (85% of a $20M target) and reduced SG&A by 21% year-over-year; adjusted EBITDA loss widened to $8M primarily due to compressed gross margins. Key margin pressures came from higher short-term production costs (e.g., Claybourne pre-rolls), softer high-margin markets (Poland), and lower Storz & Bickel sales; actions to restore margins include price adjustments, automation and added pre-roll capacity (targeted by end of Q3), prioritizing profitable markets, margin-accretive bulk sales, and bringing more Storz & Bickel manufacturing in-house. Balance sheet highlights: $144M cash and short-term investments, $295M debt, ongoing ATM program (USD 94M raised), and an agreement to prepay USD 50M of the senior secured term loan by Mar 31, 2026 to reduce annual interest by ~USD 6.5M. Management’s near-term priorities are sustaining top-line momentum, improving gross margins (targeting exiting the year in the low-to-mid 30s), achieving positive adjusted EBITDA and improving free cash flow via lower interest expense, tighter working capital, and lower capex.