This article first appeared on GuruFocus.
Tilray Brands (NASDAQ:TLRY) delivered a surprise that jolted the market on Thursday, reporting a break-even fiscal first quarter that defied Wall Street’s bearish forecasts. Analysts had expected a $0.04 per-share loss on $205.8 million in revenue, but Tilray instead posted a flat $0.00 profit and beat expectations with $209.5 million in sales. The announcement sent the stock soaring more than 16% in early trading as investors began to reassess the company’s turnaround potential in a cannabis sector still struggling for profitability.
Management emphasized that the quarter reflected disciplined cost control and a sharper focus on operational efficiency. Although revenue grew just 5% year over year and gross margins slipped three points to 27%, the company managed to generate a $1.5 million net profit. Free cash flow remained negative at $10.9 million, yet that figure marks a dramatic improvement from the $42 million cash burn recorded a year earlier. The results suggest that Tilray’s focus on tightening expenses and optimizing scale could be starting to bear fruit.
Still, the road to sustained profitability remains challenging. Tilray carries a market capitalization of $2.4 billion despite accumulating $2.2 billion in losses over the past year, and analysts remain cautious, not expecting consistent earnings before 2028. However, if management continues executing with the same discipline and delivers more quarters like this one, Tilray could be on the verge of rewriting its narrativefrom a perennial underperformer to a legitimate turnaround story in the cannabis industry.