Tilray Disappoints Investors After Posting Wider-Than-Expected Q3 Loss


Tilray, Inc. (NASDAQ: TLRY)

Tilray announced Q3 revenue this afternoon of $10.0 million, which was 85 percent growth over Q3 2017. However, the massive revenue growth was overshadowed by a higher-than-anticipated net loss, sending TLRY stock down 2 percent in the extended trading session.

Shares of the Canadian-based pot producer have rallied more than 318% since September, while the ETFMG Alternative Harvest exchange-traded fund has climbed 20%.

TLRY Earnings & Outlook

Third-quarter net loss was $18.7 million, or 20 cents per share, versus a net loss of $1.8 million, or 2 cents per share in the comparable period last year. The net loss included non-cash stock-based compensation charge of $11.2 million, down from a similar charge amounting to $35 million in the same period a year earlier.

Adjusted for non-cash compensation, net loss totaled to $7.5 million, or 8 cents per share. Adjusted earnings before interest, taxes, depreciation, and amortization came to $7.4 million, up from a loss of $1.7 million in the prior-year period.

Tilray attributed adjusted earnings declines and the high net loss to a rise in operating expenses related to the expansion of international teams, continued growth, and costs related to its initial public offering.

Sales grew 85% to $10.0 million, aided by increased wholesale distribution in export markets, high demand for its products by patients, and bulk sales to other licensed producers. The company sold a total of 1,613 kilograms, up from 684 kilograms for the three months to Sept. 30, 2017.

Average per-gram prices fell from $7.53 in the prior-year period, to $6.21 in Q3 2018, thanks to a rise in bulk sales during the quarter.

Tilray CEO Comments

“The cannabis industry remains very robust and we are pleased with our revenue momentum and strategic achievements in the third quarter,” said Brendan Kennedy, President and Chief Executive Officer of Tilray.

“We are in the early stages of achieving our growth potential and our team continues to strategically execute on disciplined operational initiatives and investments to support Tilray’s long-term, sustainable growth as the pace of legalization continues to accelerate around the world. Going forward, the demand for our products is strong and we remain committed to expanding our leadership in the global medical and adult-use cannabis markets.”

Tilray Inc. Company Profile

Tilray Inc. is a supplier of cannabis products to pharmaceutical distributors. The Company is focused on medical cannabis research, cultivation, processing and distribution of cannabis products worldwide.

The Company is engaged in cultivating and selling medical cannabis in Canada. It also supplies cannabis products to patients in a number of countries spanning five continents through its subsidiaries in Australia, Canada, and Germany and it produces medical cannabis in Canada and Europe. Tilray, Inc. was incorporated in 2018 and is headquartered in Nanaimo, Canada. – Reuters