Tilray Brands, Inc.

Thank you for joining today's conference call to discuss Tilray's brand's financial results for the second quarter fiscal year 2026, ended November 30th, 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 to conduct via audio. Now I'll turn over the call to Mrs. Baran Narada, Tilray Brand's Chief Corporate Affairs and Communications Officer. Thank you. You may begin.

Thank you, Operator, and good afternoon, 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 CDAR. 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 second 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 very much, Barron, and good afternoon, everyone, and Happy New Year. Thank you so much for joining us today. We delivered a strong second quarter marked by record results and a beat against analyst expectations in the face of strong headwinds. We recorded our highest ever Q2 net revenue of $218 million, achieving an adjusted EBITDA of $8.4 million, and a reported reverse stock split adjusted EPS loss of $0.02 million. all while generating an adjusted cash operating income of six million dollars more importantly the quality of our performance continues to improve highlights this quarter include a 51 percent sequential growth in the international cannabis revenue and a meaningful year-over-year improvement in both net income and free cash flow We also continue to strengthen our balance sheet. We ended the quarter with approximately $292 million in cash and marketable securities and reduced our debt by approximately $4 million during Q2, leading to a strong net cash position, exceeding our debt by almost $30 million. In a rapidly evolving global cannabis regulatory environment, particularly in the U.S., our liquidity and balance sheet strength remains a clear strategic advantage. Today, Tilray operates more than 40 brands in more than 20 countries. We are a global leader in cannabis, trusted by patients, healthcare professionals, and regulators worldwide. We are the number one cannabis producer in Canada by revenue, the fourth largest craft beer brewer in the United States, and a market leader in branded hemp wellness products across North America, where our high-protein hemp food portfolio holds nearly a 60% market share. Our Q2 results reinforces the momentum we discussed last quarter in proving fundamentals increasing leverage from our diversified global platform across cannabis, beverage, and wellness. Let's turn... for its next phase of growth. While global cannabis markets continue to evolve, we believe the industry remains early in its long-term development cycle. The decision by President Trump to federally reschedule cannabis in the U.S. represents one of the most consequential regulatory shifts that industry has seen in decades. Thank you, President Trump, if you're listening today. This is a moment Tilray has been preparing for methodically for years. And guess what? We are ready to go. We believe that cannabis rescheduling to a Schedule III will lead the U.S. towards a federally compliant medical cannabis framework. Consistent with our other developed international markets, Tilray is positioned to act immediately. We already have the platform, regulatory experience, operating capabilities, and leadership team in place with Tilray Medical U.S. to execute responsibly and to scale. Globally, Tilray Medical is expected to generate approximately $150 million in revenue on an annual run rate. We offer over 200 medical cannabis products serving more than 500,000 registered patients worldwide. We have participated in more than 25 medical cannabis studies and clinical trials conducted in the U.S., Canada, Australia, Argentina, and across Europe with leading hospitals, physicians addressing conditions such as pediatric epilepsy. cancer-related nausea, PTSD, chronic pain, anxiety, essential tremors, alcohol use disorders, glioblastomas, cannabinoid impairment, and driving performance. These initiatives reinforce Tilray's reputation as a science-driven, evidence-based medical cannabis company. and they underscore the trust placed in us by healthcare professionals, patients, and regulators globally. We also possess one of the largest banks of cannabis genetics, which we intend to study in order to support research on the endocannabinoid system and advanced medical cannabis science further. Now let's turn to Q2 cannabis performance. Global cannabis revenue increased to $68 million. Our high-margin international cannabis business led to growth increasing 36% year-over-year and 51% substantially to $20 million, marking one of our strongest international quarters to date. And we fully expect this momentum to continue as we expand our global footprint. This performance is particularly notable given ongoing permit challenges, regulatory transitions in Portugal and Germany, and continued price compression, especially in flour. I'd like to acknowledge and thank the international team for their focused execution under these circumstances. I also want to recognize our Canadian cannabis team. for their expertise, support, and supply contribution. Additionally, I appreciate the cooperation of Inframed and the Portuguese regulators in facilitating improvements to permitting approval timelines. Looking ahead, Europe, particularly Germany, the UK, and Poland, represents a significant growth opportunity for us. disciplines, including process improvement, automation, cross-functional coordination, and increased utilization at our cultivation facilities in Portugal and Germany and utilizing our Canadian facilities. Tilray operates one of the largest cannabis footprints in Europe, which we're continuing to expand and our advantage lies in scale, speed, to market data, driven decisions, making, and experience gained from our Canadian operation. Moving on to Tilray Pharma and our distribution business, as discussed last quarter, we're expanding our pharmacy reach in Germany, utilizing Tilray Pharma's expansive pharmacy network and salespeople, and expect to triple our medical cannabis distribution footprint in fiscal 2026. We remain on track. In terms of Q2 performance, revenue grew by 26% year-over-year and 15% sequentially to $85 million, making it our biggest quarter ever, while improving our gross margins. The increase in distribution revenue in the period was driven by competitive pricing, portfolio optimization, and increased focus on medical device sales. Looking ahead, Tilray Pharma is laser focused on enhancing operational efficiency to support its commercial expansion into 3,000 additional pharmacies through strategic partnerships. As medical cannabis continues to expand globally, Tilray Pharma is positioned to play a significant role in our overall growth. By utilizing insights gained through integrating our medical operations, Tilray Pharma aims to strengthen its business value and create new growth opportunities within both the European medical market and the U.S. International markets remain one of Tilray's most compelling long-term growth drivers. As we expect, market opportunities, revenue, profitability continue to grow. In Canada, our cannabis business continues to reinforce its leadership position. During Q2, our adult use medical sales channel net of excise tax grew to $46 million, with recreational cannabis growing 6% in the quarter. Tilray continues to hold a leading market position in dried flour, non-infused pre-rolls, beverages, oils, and chocolate edibles. Our disciplined approach to product mix, margin management, and premium pricing has supported our strategic reentry into the high-growth segments as baked and infused pre-rolls with a focus on accretive margins. In Q2, we advanced our innovation pipeline with the launch of Redican Amp Live Resin Liquid Diamond Vapes, addressing consumers' demand for the full spectrum of cannabinoid strain-specific terpenes that deliver an authentic plant profile. This product combines 80% of live resin with 20% of liquid diamonds, maximizing potency while maintaining natural flavor integrity. In addition, we entered the Quebec market with vapes with a good supply brand, rapidly achieving a top three skew position in the province while underscoring effective execution and strong consumer uptake. Operationally, we hit our highest quarterly volume in two years with over 5.5 million units shipped in Canada in Q2. We also completed our first harvest from a restarted outdoor cannabis grow in Cayuga, Ontario, exceeding expectations on the THC content. With this extra biomass, our cannabis cultivation capacity rises to 200 metric tons annually. This boost not only allows us to provide high-quality products at reduced cost and improve our profit margin, but also helps us expand into fast-growing markets, supplying both Canadian and international customers, including those in Europe, to meet increasing global demand. The positive momentum of the past two quarters reflect the trajectory of Canadian cannabis business. With the right product mix, healthy margins were well positioned to elevate this business in the second half of 2026 and beyond. With rescheduling of cannabis in the U.S., now is the time for Canada to modernize its regulation and secure its position as a global cannabis leader, including excise tax reform, marketing flexibility, healthcare integration, and on-premise consumption. Without modernization, Canada risks becoming an exporter of raw products while value creation, intellectual property, and long-term economic growth moves elsewhere. As a global policy accelerates, the choice is clear. Modernize Canada's cannabis regulation to support economic competitiveness, consumer education, sustainable growth, or risk being left behind in an industry Canada helped to create. Prime Minister Carney, I hope you're listening to this call. The Canadian cannabis industry has generated a significant amount of jobs, contributed billions of dollars in tax revenue to both federal and provincial governments. However, the lack of regulatory reform has resulted in Canadian producers redirecting their investments and attention towards international markets where excise tax can be circumvented. Given the declining spirits industry in Canada, excise tax should be reduced. Cannabis drinks should be permitted in liquor stores and on-premise locations. Medical cannabis sales in drugstores would lower excise tax burden while boosting overall tax revenues as the industry grows. Turning to our beverage business in Q2, beverage revenue totaled $50 million. We continue to make progress, executing our integration and optimization strategy. We delivered $27 million in annualized cost savings in the first half of the year and remain on track towards our $33 million target. We're making meaningful progress in improving performance. However, there's more to be done as we continue to integrate our brands, streamline operations, and optimize processes. We acquire brands with the understanding that significant improvements and comprehensive turnaround would be necessary, a process that is currently underway through our integration plan. We recognize this transformation will take time. And while we have not achieved all our objectives, We are on track and encouraged by the positive momentum gained so far. We look forward to the up-and-coming spring product resets with our retail partners and the introduction of some of the new innovations in the market. These changes are anticipated to have a positive impact on revenue in the fourth quarter. Our outlook may seem bullish, but conviction is essential for success. which remains our primary focus, revitalizing the craft beer category, making beer fun again, bringing people together, fostering meaningful connections, and generating long-term value for our shareholders. We've established brands, breweries, a major distribution system. Beer is here to stay and not going anywhere. Tilray aims to expand its regional, national, and global presence through strategic partnerships with leading US and international brands. We expect to share more about this in the future, but we believe these partnerships validate the strength of our platform and our strategic vision. This approach also positions us for future opportunities should cannabis THC drinks become federally legal in the U.S. We're ready to produce and sell as we're currently operating a leading THC beverage operation across Canada with over 45% of the THC beverage market share. Regarding our U.S. hemp-derived THC business, we continue to offer Fizzy Jane happy flower hemp-derived THC beverages in 5 mg and 10 mg formats through nationwide retailer partnership. Distribution includes major wine, liquor, grocery outlets across the country. While regulatory changes may affect HDD9 products after 2026, we anticipate compliant participation under new federal laws if it happens. We're also pursuing international growth by expanding our beverage business into new markets worldwide. We expect to leverage our future strategic partnerships. Our strategy for beverage abroad is evolving with an emphasis on craft beer and non-alcoholic drinks, including energy beverages that meet the demands of consumers in this expanding sector where brands such as Highball, our clean energy drink, Liquid Love, our sparkling water brand. Highball is set to launch in the UK in Q4, with expansion plans also underway for the Middle East and Africa. Beyond non-alcoholic beverages and energy drinks, we continue to explore opportunities to build on our global craft beer segment. Tilray recently participated in the American Craft Beer Expo in Japan and gained valuable insight, which the team will pursue in the future. Rounding out our beverage strategy, we're also focused on expanding our non-alcoholic beverages in the U.S. and across international markets. Our recent innovations, including non-alcoholic beers under Montauk 10-barrel and our non-alcoholic ready-to-drink canned beverages and distilled spirits, including Mach 1. Within the spirits category, despite market challenges in Q2, we focus on enhancing our commercial strategy, resulting in a 9.2% increase in depletions across vodka, bourbon, and gin, with vodka leading by double digit for the quarter. While the Bronco seasonal release sold out rapidly, our ongoing efforts remain focused on expanding product distribution to additional states and beyond. With five years experience in the beverage alcohol industry, we remain confident in our future trajectory as we continue to enhance operational efficiency. Now turning to our wellness business, we generate a revenue of $14.6 million driven by a strategic focus on value-added innovation, including high-protein super seeds, better-for-you breakfast products, better-for-you snacking, and the continued success of our highball clean energy drinks. Within our ingredient sales business, we've expanded our range of offerings in hemp protein, hemp oil, helping us further develop our business in North America and Asia. Our hemp food business remains fully insulated from proposed hemp THC regulation as these products contain zero THC and are broadly distributed across mainstream retail. In closing, we are confident in Tilray's trajectory for the second half of fiscal 2026 and beyond. With a diversified, scalable platform, improving fundamentals, strong liquidity, regulatory tailwinds developing globally, Tilray is well positioned to capitalize on the next phase of growth across cannabis, beverage, and wellness products. Thank you to our shareholders for your continued support and confidence in Tilray's long-term strategy. I will now turn the call over to Carl to walk through our financial results in more detail. Carl, are you ready?