Tilray, Inc. (TLRY) reported a net loss for the third quarter, hurt by higher operating costs. Analysts had forecast a wider loss. Though revenues surged 86%, the company’s stock dropped in the extended trading session Tuesday, following the announcement.
The early-stage medical cannabis company reported an adjusted net loss of $7.5 million or $0.08 per share for the September quarter, narrower than the $0.12 per share loss analysts had forecast. Dragging the bottom-line, cost of sales and marketing expenses more than doubled during the three-month period.
The unadjusted net loss was $18.7 million or $0.20 per share, sharply wider than the $1.8 million or $0.02 per share loss recorded in the year-ago quarter. Revenues surged 86% annually to $10 million, aided by strong patient demand and wholesale distribution in export markets. The top-line was broadly in line with expectations.
Dragging the bottom-line, cost of sales and marketing expenses more than doubled during the three-month period
“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,” said CEO Brendan Kennedy.
During the quarter, the Nanaimo, Canada-based company acquired Alef Biotechnology for $3.9 million. The deal will allow it to import, produce, and distribute Tilray-branded medical cannabis products in Latin America.
The growing demand for recreational and medical marijuana and its legalization in Canada adds to the possibility of Tilray achieving break-even in the near future. In the meantime, shareholders will be looking for convincing reasons to justify the high valuation of the stock.
Tilray’s shares almost quadrupled in value since it went public in July, but pared some of the gains last month. The stock closed Tuesday’s regular session lower and lost further in the after-hours following the earnings report.