Tilray Brands, Inc.

Thank you for joining today's conference call to discuss Tilbury Brand's financial results for the first quarter fiscal year 2026, ended August 31, 2025. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session for analysts conducted via audio. I'll now turn the call over to Ms. Barron Narada, Tilbury Brand's Chief Corporate Officer. Thank you. You may now begin.

Thank you, Operator, and good morning, everyone. By now, you should have access to the earnings press release, which is available on the Investors section of the Tilray Brands website at tilray.com and has been filed with the SEC and CETA. Please note that during today's call, we will be referring to various non-GAAP financial measures that can provide useful information for investors. However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. In addition, we will be making numerous forward-looking statements during our remarks and in response to your questions. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties which may prove to be incorrect. Actual results could differ materially from those described in those forward-looking statements. The text in our earnings press release includes many of the risks and uncertainties associated with such forward-looking statements. Today, we will be hearing from key members of our senior leadership team, beginning with Erwin Simon, Chairman and Chief Executive Officer, who will provide opening remarks and commentary, followed by Carl Merton, Chief Financial Officer, who will review our financial results for the first quarter of fiscal year 2026. And now, I'd like to turn the call over to Tilray Brands Chairman and CEO, Erwin Simon.

Thank you, Barron, and good morning, everyone, and thank you for being here for Q1 results. Q1 of fiscal 2026 was a testament to the significant momentum Tilray has built across our businesses over the years. I'm proud to report that our strategic focus is continuing to strengthen our profitability, our balance sheet, and leveraging our global platform to drive innovation in cannabis, beverage, and wellness and continue to deliver solid results for our shareholders. I want to extend my sincere gratitude to our shareholders for their ongoing support and belief in Tilray's vision. It is encouraging to see our stock regain strength this quarter and return to full NASDAQ compliance. Notably, in the months of August and September, Tilray traded well over 1 billion shares each month, highlighting the tremendous interest in our company. And not a lot of companies have a billion shares trading on a monthly basis. We sincerely thank our shareholders for their continued confidence in our strategy and their commitment to investing in our company. Your belief in our long-term vision and what drives us forward. Now go out there and buy some of our products. Notably, during the quarter, we achieved net income of $1.5 million and earnings per share of zero, highlighting our commitment to sustainable growth and operational efficiency. We achieved revenue growth across all our business segments, with the exception of the beverage segment, which we remained flat because of deliberate decisions to optimize our craft beer SKU portfolio under Project 420. Overall, total revenue increased by 5% year-over-year to a Q1 record net revenue of $210 million, fueled by double-digit growth in our Canadian adult use and our international cannabis business, which delivered 12% and 10% growth respectively. We also continue to strengthen our balance sheet by reducing our outstanding debt by $7.7 million this quarter. bringing our net debt to EBITDA ratio a 00.7 times cash to, and our cash equivalent to $265 million. Our results are underpinned by our deep understanding of product innovation and evolving what consumers prefer. This expertise allows us to shape innovative offerings and not only meet current demand, but anticipate future needs, keeping Tilray at the forefront of the cannabis, beverage, and wellness markets. Today, Tilray owns and operates more than 40 unique brands in over 20 countries, and we are the predominant global cannabis leader trusted by patients, medical professionals, and governments in over 20 countries, and number one Canadian cannabis producer by revenue. The fourth largest craft beer producer in the United States, and a market leader in branded hemp products across North America with our portfolio of high-protein hemp snacks and Better For You products, holding nearly a 60% market share, and now a leader in the new, exciting hemp-derived Delta 9 THC beverages across the U.S. We have built a diversified global platform that is a leader in every industry which we compete, Let me briefly review each business. Our cannabis business, as I said, grew 5% year-over-year to $65 million. Globally, the cannabis industry continues to evolve, and Tilray has the cultivation and manufacturing agility at the right cost to compete and lead in any commercial markets around the world. Recent developments in the U.S. have strengthened our optimism around rescheduling of medical cannabis. and we've seen in other countries as we've seen in other countries around the world. We believe rescheduling would enhance our patient access and improve the quality of patient care, promote scientific research, and support responsible regulatory framework. The medical cannabis industry in the U.S. currently estimated to be at least a $10 billion market, which would create a potential opportunity for Tilray to capture at least a 3% to 5% market share. representing a significant $300 to $500 million business opportunity. We've identified multiple pathways to participate in the U.S. medical cannabis industry, positioning ourselves to take advantage of this substantial growth potential when it happens. In Q1, our Canadian cannabis business delivered strong results. Tilray reinforced its position as Canada's largest legal cannabis company by revenues. with Q1 revenue of 4% year over year to $51 million. In the adult use channel, Tilray was the top five licensed producer. We grew in market share, closing the gap to the number one LP in market share by 53 basis points. We held the number one position in key categories such as free rolls, beverages, oils, chocolate edibles, and by the end of the quarter, we also reached the number one spot in flour, while maintaining our top 10 positions across all categories. Congratulations to Blair and his team. We believe our extensive scale represents a significant competitive advantage within the Canadian market, where we manage approximately 5 million square feet of cultivation space and currently maintain 210 metric tons of cannabis in production, with additional capacity readily available. This positioned us to effectively meet future demand. Furthermore, Tilray is well prepared to supply both European and U.S. markets as regulatory framework develops these markets and it continues to expand. In Canada, we also foresee substantial potential as regulatory reforms may lead to transformative developments such as expanding cannabis in healthcare, unlocking new opportunities through proposed cannabis health products and broader insurance companies, making medical cannabis more accessible to patients. On-premise consumption for THC beverages, which I believe is big. A rollout of on-site consumption to drive responsible use and create a vibrant experimental cannabis beverage market. And of course, regulatory modernization, which we've been talking about. Updating the outdated policies that restrict competitiveness and paving the way for innovation and growth in Canadian cannabis industry. Turning to our international business, our international cannabis revenue grew 10% year over year to $13.4 million. And this is with not being able to obtain permits in Portugal to allow us to ship around the rest of the countries. And we remain uniquely positioned to gain market share as a global consumer preferences and the regulations evolve. In Germany, we continue to expand our commercial medical cannabis portfolio and are actively leveraging our Tilray Medical and CC Pharma distribution network across pharmacies throughout the country to drive further growth. Looking ahead, we expect to increase our medical cannabis distribution footprint by threefold in fiscal 2026, significantly enhancing our reach and impact within the German pharmaceutical market. And we have that access through CC Pharma. In Italy, our Italian subsidiary, FL Group, received the first license from the Italian Ministry of Health to distribute medical cannabis flower for therapeutic use. We also partner with Molteni, a leading Italian pharmaceutical company, to expand access to medical cannabis extracts. and provide targeted education through their national network of medical and scientific professionals. We continue to expand our growing capabilities in both Portugal and Germany, strengthening our EU GMP certified cultivation infrastructure and to meet evolving global demand. Currently, we produce 21 metric tons of medical cannabis flower in Europe, and have the capacity to significantly increase the amount as demand continues to grow. Our expanded growing operations not only supports our leadership in established markets, but also positions us to rapidly respond to the regulatory environments open across Europe and way beyond. European cannabis reform continues to progress, and we're seeing that. And we're excited to witness important developments like the European Union's Cannibal Project and Spain's recent approval of medical cannabis. Tilray is proud to already be involved in medical cannabis research in Spain through a partnership with the University of Madrid, supporting advancements in patient care and responsible regulations across Europe. Now onto our distribution, our European medical distribution business CC Pharma continues to grow with revenue increasing 9% year over year to $74 million. The segment remains a significant driver of our European cannabis operations and our infrastructure provides a strategic advantage that enable us to capture increased market share as both the regulatory environment and industry landscape evolves across Europe. And as I said before, we have access to over 13,000 drug stores within the German market. We remain confident in our global expansion strategy with Tilray well positioned to drive international growth and leveraging emerging opportunities across cannabis, beverage, and our wellness business. International beverage, which is a new business for us, building on our international footprint, our infrastructure, Our growth strategy, we will be accelerating the expansion of our non-alcoholic beverages portfolio across multiple international markets. We expect our brands, Highball, Liquid Love, Runner's High, to gain traction with consumer opportunities. We built a dedicated team focused exclusively on servicing our international customers. This specialized team will ensure that our portfolio of leading craft brands is tailored to the taste and expectations of our global consumers, while also supporting our long-term growth in high potential markets worldwide. By leveraging our established distribution networks and brand-building expertise, we are well-positioned to capture growth opportunities in this fast-emerging category. and delivering exciting new products to the international markets, and the demand for them is high. Notably, we've already secured a distribution partner in the U.K. for High Vault, ensuring rapid market entry and strong support for the brand in this key region. Additionally, on the beer side, we recognize the growing demand for American craft beers in the international market. To further capitalize on this momentum, we're actively exploring all opportunities to grow this business, including international manufacturing opportunities, potential acquisitions to expand our reach and better serve our global customers. In our U.S. beverage business, we continue to make progress against our beer integration, optimizing our strategy and our Project 420. We see long-term potential for the beverage category. based on the diversification of our offerings and the superior products we produce. We've improved operations, leveraged acquired brands, supporting positive performance. Notably, many of these brands still reacquired were previously in decline and are now showing promising results with healthier growth trends and improved overall performance, as we move to regain sales authorizations at retail that were lost. This turnaround underscores the success of our focus strategy and our commitment to revitalizing and growing our beverage beer portfolio. Through Project 420, we've realized $25 million in annual savings, moving closer to our goal of $33 million. We've continued to work closely with our distributors to concentrate on promoting strong brands in each of our markets. In the quarter, we experienced growth across key brands and regions. Shock Up, the company's third largest brand, was among the fastest growing craft brand with notable increase in both dollar sales and market share, driven in part by the successful launch of its variety pack, which has grown to be the number eight most popular new craft beer nationally. Trends continue to improve for Shock Top, with a $30 trend improvement since Tilray acquired the brand in 2023. In the Southeast, Shock Top excelled with a 49% jump in dollar sales. Sweetwater Day Trip IPA stood out as one of the top new items in the region. In Northeast, Montauk maintained its leading position in Metro New York and gained market share nationally with continued demand for its Wave Chaser IPAs. Breckenridge Brewery led craft share gains in Colorado with its top Avalanche seasonal and juice drop and brands positioning double-digit growth. And last but not least, Red Hook outperformed regional craft beer brands propelled by Big Valor, Imperial IPA strong volumes, and our velocity gains, while 10-barrel pub beer, 18-pack, dominated craft sales in Oregon and 5% of all craft volumes. We also expanded our partnerships, including co-brand craft beer with the Oregon Ducks, perfect for college football season, and a new partnership with Auntie Anne's for the launch of Shock Top Twisted Pretzel Wheat Beer. You've got to try it. It's great. We're making beer fun again, and these partnerships and co-branding opportunities offer significant runway for us to widen our markets. In spirits category, which has been tough? We have introduced several world-class innovation, including Mach 1, our new line of non-alcohol spirits, and Casa Breck in the tequila space. We've also introduced Mountain Shot, a unique beverage blend which may take mushrooms available in pouches, which is a unique packaging format to enhance the shot experience and capture the free spirit essence of the Rocky Mountains just in time for ski season. We also kicked off our fifth year partnership with the Denver Broncos with a new line of spirits, including limited editions, Broncos honey whiskey, and Broncos orange creamsicle ready-to-drink cocktail. In the non-out category, we're proud that our non-out beer brand, Runner's High, which we only launched in fiscal 2025, is now recognized as one of the top 15 brands in non-out beer and ranks the fourth fastest-growing non-out beer in in a hot category in the Southeast, selling across 4,500 distribution points. Following the success of our ham-derived Delta 9 THC beverages, we've expanded Fizzy Jane and Happy Flower product line to include 10 milligram formats, complementing the existing 5 milligrams offerings, and the consumers want these products. The innovative HD9 category leveraging our craft beer infrastructure and distribution networks, enabling us to deliver high quality products to consumers across 14 states. Whether they're new to the category or seeking to enhance experience, we have established partnership with retailers nationwide for HD9 brands and now offer distribution to prominent wine, liquor outlets such as Total Wine and more, ABC Fine Wine and Spirits. In addition, in Q1, we saw further growth in regional grocery channels, including ShopRite, Stu Leonard's, and Winn-Dixie. We continue on building on this positive trajectory as we move into Q2 and the rest of the year. Today, our beverage business operates more than 20 brands, including 15 American craft beer brands across seven network manufacturing facilities and 16 brew pubs. We're well diversified across craft beer, spirits, non-alcoholic and now HD9 and energy drinks. We know that there is plenty of opportunity for growth in the beverage category. We have the right leadership and we're pursuing the right growth strategy. And I'm tremendously excited about the future and the opportunities in the large beverage category. Last but not least, now turning to our wellness business, which is near and dear to my heart. Our wellness business had a strong quarter, growing revenues to over $15 million. We continue to expand our wellness portfolio with many launches of new offerings, new crackers, new hemp portfolios, new other products that are available at Whole Foods and other retailers. We are now in over 17,000 retailers across the U.S. These offerings are also launched in Amazon, and many other online retailers. I'm highly confident in Tilray's outlook for the remainder of 2026 and beyond. With regulatory environments in our industry poised for medieval evolution, I fully expect positive change ahead, and I'm certain in our ability to adapt swiftly, and we will strategically. Our proven approach, robust product portfolio, and exceptional team position us to seize every single opportunity, especially in wellness, where we see us with significant expansive opportunities, and we're committed to unlocking new possibilities through continuous innovation, portfolio expansion, target investments, including the opportunities when strategic acquisitions happen. While we've made considerable progress, we recognize we have not yet reached our full potential, and we're far from it in the wellness space. And that is the same with our cannabis business and our beverage business. There's lots of room and lots of white space for us. With that, I will now turn the call over to Carl for an in-depth look at our financials. Carl.