But should investors expect that to change in Q2, and could Aurora deliver a surprise profit? If that happens, that could give its share price a much-needed boost.
When Aurora last released its quarterly results in November 2021, its adjusted earnings before interest, taxes, depreciation and amortization loss was 12.1 million Canadian dollars for the period ending Sept.
And with an adjusted gross margin of 54%, there’s simply not enough in the top line to cover those hefty operating expenses.
In early January, Aurora reported that it delivered a medical cannabis shipment to Israel worth close to CA$10 million.
Medical marijuana generates better margins for the company than consumer products; last quarter, Aurora reported an adjusted gross margin on medical cannabis of 64% — versus 32% for consumer cannabis products.
Investors should expect to see an improved adjusted EBITDA number in Q2 in light of the international shipment and a continued focus on cost reduction, but I wouldn’t expect the company to get out of the red just yet.
Aurora maintains that it has a “clear path to profitability by the first half of fiscal 2023.” That gives the business about a year to find a way to cut out at least CA$12 million , profitability should be a question of when, and not if, it will happen.
In the past year, shares of Aurora have fallen 62%, performing a bit worse than the Horizons Marijuana Life Sciences ETF, which is down 50% over that time frame.
Aurora’s shares trade at a price-to-sales multiple of just over 4, which is higher than Tilray, a cannabis producer that’s generating more in revenue, and its operations are already profitable.