Canopy Growth Reports Very Positive Q3 Results - Stock Jumps

Canopy Growth Corporation (TSX: WEED; NYSE: CGC) today announced its financial results for the third quarter ended December 31, 2019. 

Q3 Financial Highlights

(The comparisons below are made between Fiscal Q3 2020 and Q2 2020 results and are in millions of Canadian dollars unless otherwise stated. Go here to convert into USD.)

• Net Revenues:
  • increased 13% excluding the impact of portfolio restructuring charges
    • Canadian Business-to Business Recreational cannabis: increased 8% due to:
      • 140+ stores becoming active in the quarter
      • and higher sales of premium dried flower and pre-roll joints
    • Canadian Business-to-Consumer Recreational cannabis: increased 16% due in part to:
      • an 11% increase in same store sales
    • Canadian Medical cannabis: increased 5% primarily attributable to:
      • the broadening of the company's brand and product offerings
    • Total Canadian Revenue: increased 9%
    • International Medical cannabis: increased 3% as a result of:
      • Germany cannabis sales being higher than expected due to opportunistic sales into the German market to fill a supply gap that resulted from a regulatory enforced sales halt of cannabis products offered by another vendor (Aurora)
    • Total Medical cannabis: increased 4%
• Gross Margin:
  • higher gross margin (34%) benefited from:
    • lower period costs due to higher facility utilization
• Operating Expenses:
  • decreased 14% versus primarily due to:
    • a $20 million reduction in G&A expenses
    • and over $31 million in lower stock-based compensation
• Adjusted EBITDA:
  • improved 41% to a loss of $92 million driven by:
    • higher sales,
    • improved gross margins
    • and lower a 59% reduction in operating expenses
• Cash Balance Position:
  • decreased 14.8% to $2.3 billion reflecting: 
    • the EBITDA loss,
    • capital investments
    • and M&A

Canopy's stock price had jumped by 14% by mid-day Friday (see graph below) as a result of the very encouraging Q3 results and as a result of the extremely poor results from Aurora as reported yesterday (see exclusive TalkMarkets article here). 

(Click on image to enlarge)