Tilray Revenue Hits Record $257 Million, but Cannabis Sales Fall 13% and Cash Burn Deepens

Tilray Brands (NASDAQ: TLRY; TSX: TLRY) reported record first-quarter fiscal 2027 revenue of $257.1 million on Thursday, up 23% from a year earlier, as its expanding beverage and pharmaceutical distribution businesses helped offset declining cannabis sales.

But the company’s financial results reveal a more complicated picture. Cannabis revenue fell 13% to $56.1 million, adjusted EBITDA declined to $9.2 million, and Tilray recorded a $40 million net loss.

Operating cash outflow also increased, reaching $16.5 million compared with $1.3 million a year earlier. Free cash flow deteriorated to negative $27.4 million.

The results highlight the progress Tilray has made in diversifying beyond cannabis, alongside the challenge of converting a larger revenue base into stronger earnings and cash flow.

Beverages now generate nearly twice as much revenue as cannabis

Tilray’s consolidated revenue increased from $209.5 million to $257.1 million, while gross profit rose 35% to $77.5 million. Gross margin improved from 27% to 30%.

The composition of that growth is particularly important.

Business segment	Q1 FY2027 revenue	YoY change
Beverages	$101.5M	+82%
Pharmaceutical distribution	$84.3M	+14%
Cannabis	$56.1M	−13%
Wellness	$15.3M	Flat
Total	$257.1M	+23%

Beverages represented approximately 39% of consolidated revenue, compared with 27% a year earlier. Cannabis contributed about 22%, down from 31%.

The beverage business benefited from Tilray’s acquisition of BrewDog, with segment revenue increasing 82% to $101.5 million. Beverage gross profit nearly doubled to $42 million, and gross margin improved to 41%.

Pharmaceutical distribution revenue increased 14% to $84.3 million, although the segment’s gross margin remained at 11%.

Together, beverages and distribution accounted for approximately 72% of Tilray’s quarterly revenue.

“We are no longer dependent on a single market or regulatory catalyst,” Chairman and CEO Irwin Simon said in the earnings announcement.

International cannabis grows, but Canadian sales weaken

Tilray’s cannabis operations delivered contrasting results across markets.

International cannabis revenue increased approximately 21% to $16.2 million, while the company reported 71% revenue growth across its broader Europe, Middle East and Africa business, which includes medical cannabis, beverages and pharmaceutical distribution.

In Canada, however, adult-use cannabis revenue declined from $64.1 million to $53.6 million before excise taxes. Canadian medical cannabis revenue fell from $6.1 million to $4.7 million.

Despite lower consolidated cannabis revenue, the segment’s gross margin improved from 36% to 39%.

Tilray continues to emphasize its international production and distribution infrastructure, including more than six million square feet of cultivation capacity across Canada, Portugal and Germany.

The company’s overseas cannabis business is growing, but its gains have not been sufficient to offset the contraction in Canadian sales.

The cost of getting bigger

Tilray’s revenue growth has yet to produce a corresponding improvement in consolidated profitability.

Adjusted EBITDA declined from $10.2 million to $9.2 million despite the 23% increase in sales. General and administrative expenses rose 40% to $57.6 million, while marketing and promotion expenses increased 55% to $15.7 million.

The company attributed approximately $1.7 million of costs during the quarter to global fuel surcharges, which weighed on adjusted EBITDA.

Cash burn increases despite debt reduction

Tilray ended the quarter with $221.4 million in cash, restricted cash, and marketable securities and reported reducing outstanding debt by $42 million during fiscal 2027 to date.

The company also reported a net cash position under its non-GAAP definition, an improvement in its financial position.

However, cash generation moved in the opposite direction.

Net cash used in operating activities increased to $16.5 million from $1.3 million a year earlier, while free cash flow fell to negative $27.4 million from negative $10.6 million.

Inventory increased to approximately $329 million from $301 million at the end of May, adding to working-capital requirements.

Tilray also reported approximately 144.9 million common shares outstanding at August 31, compared with 131.7 million at May 31, an increase of roughly 10%. The company received $22.3 million in net proceeds from share issuance during the quarter.

The combination of debt reduction, rising cash consumption and a larger share count illustrates the competing financial demands involved in Tilray’s expansion.

Tilray maintains fiscal 2027 outlook

Tilray reaffirmed its fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million, compared with $9.2 million generated during the first quarter.

The company is also preparing to expand its beverage operations through an agreement to produce and sell Carlsberg brands in the United States beginning in January 2027.

Rolando García’s recent analysis of cannabis expansion and shareholder value works for examining the TLRY case. García shows how companies fund growth through operating cash flow, borrowing, and share issuance, and the obligations those decisions create. Tilray offers another example of why revenue growth alone does not show whether expansion creates shareholder value. Its acquisitions have helped increase sales and gross profit, but operating expenses and cash requirements have also risen.

The next three quarters will show whether Tilray can turn its expanded revenue base into stronger earnings and cash flow. Financing growth and delivering returns will be central to discussions at IgniteIt’s Capital & Policy Summit in Washington, D.C., on November 18, where cannabis executives, operators, brands, investors, and policymakers will examine the industry’s financial outlook and the regulatory decisions shaping its future.