Canopy Growth Corporation (TSX:WEED, NYSE:CGC) shares plummeted after the Ontario-headquartered cannabis producer reported a greater-than-forecast loss for the fiscal third quarter.
For the quarter ended December 31, 2024, Canopy reported a loss of C$121.9 million, down from C$216.8 million for the same period in 2023.
On a per-share basis, it posted a loss per share of C$1.11, an improvement from a loss per share of C$2.62 a year earlier but far more than the loss per share of C$0.38 expected by analysts.
Revenue fell 5% year-over-year to C$74.8 million, above estimates of C$69.2 million.
Canada's cannabis net revenue was up 1% from the year-ago quarter at C$41 million. Medical cannabis revenue grew 16% as adult use declined 10% year-over-year.
International revenue grew 14% to C$12 million, with strong growth highlighted in Poland and Germany partially offset by a decrease in Australian medical sales and exiting US CBD sales earlier in the fiscal year.
Gross margins declined by 400 basis points to 32% attributed to costs related to the launch of Claybourne infused pre-rolls in Canada and increased indirect costs for its Storz & Bickel branded vaporizer devices.
It achieved an adjusted EBITDA loss of C$3 million, marking a 61% improvement year-over-year.
The company highlighted that Q3 marked its best adjusted EBITDA to date, driven by topline growth in its medical cannabis business and its Storz & Bickel brand, which grew its sales by 19% year-over-year during the quarter.
"Canopy Growth's third quarter highlights that our business has the right ingredients for success, as demonstrated by the continued momentum in our medical cannabis businesses, Storz & Bickel, and the successful introduction of Claybourne infused pre-rolls in Canada,” Canopy Growth CEO Luc Mongeau said in a statement.
“As I step into my role as Chief Executive Officer, I am focused on achieving sustainable profitability while maximizing our ability to create value in the key markets and segments we serve."
Canopy Growth’s US-listed shares fell 22.7% at US$2.78 shortly before Friday’s opening bell, mirroring its loss on the TSX.