Aurora Beats Our Expectations and Hits Positive EBITDA in Fiscal Q2, but Dilution Continues to Sting

We were skeptical of Aurora’s prior assertions that it would deliver positive adjusted EBITDA in second-quarter fiscal 2023, but we were proven wrong. Indeed, no-moat Aurora reported second-quarter adjusted EBITDA of CAD 1.4 million. Although management warned that it hadn’t reached steady state profitability yet, we still view it as a solid milestone that the business is nearing requisite scale over fixed costs. Additionally, the company reported solid sequential cannabis revenue growth of about 20%. We think the results are particularly strong given that many Canadian peers struggled in their most recent quarters amid a market awash with competitors and handicapped by the low prices of the illicit market.