Tilray’s Q2 2026 Results: A Story of Diverging Segments

Tilray Brands, Inc. has reported a new quarterly revenue high for its second fiscal quarter of 2026, yet the underlying performance reveals a mixed picture. The company's path toward sustained profitability, while showing progress, is being shaped by sharply contrasting fortunes across its business divisions.

The company's latest quarterly figures present a complex financial landscape. While the top line grew, pressure in one segment weighed on overall margins.

• Net Revenue: $217.5 million, marking a 3% year-over-year increase.
• Cannabis Net Revenue: $67.5 million, also up 3%.
• Net Loss: $43.5 million, a substantial improvement from the $85.3 million loss reported in the prior-year period.
• Cash and Marketable Securities: $291.6 million as of the quarter's end.
• Confirmed Guidance: The full-year outlook for Adjusted EBITDA remains unchanged at $62 to $72 million.

Segment Performance: Cannabis and Distribution Shine

The cannabis division served as a cornerstone of growth. International medical cannabis sales surged by 36%, driving the segment's performance, while Canadian adult-use revenue grew by 6%. Profitability within this core business strengthened significantly, with the cannabis gross margin expanding to 39%, up from 35% a year ago. Consequently, cannabis gross profit rose to $26.1 million from $23.2 million.

Meanwhile, the distribution segment—which includes Tilray Pharma—delivered a standout performance. It achieved a record quarterly revenue of $85.3 million, a sharp increase from $67.6 million in the same period last year.

Despite these strengths, the company's total gross margin contracted to 26% from 29%, signaling that other areas are diluting these gains.

Beverage Division Faces Headwinds as Cost-Cutting Continues

The beverage unit emerged as a notable pressure point. Net revenue in this segment declined by 10.6% to $50.1 million. Management attributed the softness to a challenging craft beer environment and intensified competitive pressures.

Should investors sell immediately? Or is it worth buying Tilray?

In response to broader economic conditions, Tilray is advancing its efficiency program, Project 420. The initiative has already realized $27 million in annualized cost savings during the first half of the fiscal year, progressing toward a total target of $33 million.

Strengthened Balance Sheet and Strategic Moves

Financially, Tilray demonstrated improved health. The company shifted from a net debt position of $3.8 million in Q1 to a net cash position of $27.4 million by the end of Q2, representing a sequential improvement of $31.2 million.

Strategically, the company is expanding its European medical cannabis footprint. On January 22, it rebranded its Italian operation as Tilray Medical Italia, enhancing its EU-GMP-certified portfolio. The approved products, which include various flower and oil formulations, are distributed in Italy through partner Molteni Farmaceutici.

In the United States, Tilray is positioning for potential regulatory change. Following the December 2025 Executive Order to reschedule cannabis as a Schedule III substance, the company established Tilray Medical USA. This entity is designed to leverage the firm's infrastructure within an evolving medical cannabis landscape.

Investors will gain further insight with the next earnings report, expected on April 8. The focus will likely remain on the continuation of margin improvement, cost reduction, and narrowing losses, balanced against the ongoing drag from the underperforming beverage business.