The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Aaron Grey - Alliance Global Partners - Analyst
: Good morning. Thank you very much for the questions. So first question for me, you guys talked a lot about international, some of your growth
aspirations. So if we could just dive a little bit deeper into your outlook for 2025 and fiscal -- I know EU-GMP certificate doesn't change capacity
and you're already selling into markets, but given the greater margin capture you'll have with the EU-GMP change, how do you think about allocating
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MAY 12, 2025 / 12:00PM, OGI.TO - Q2 2025 Organigram Global Inc Earnings Call
capacity internationally, given the greater margins you'll get there versus balancing the Canadian market share aspirations that you have? So any
color on any capacity constraints you might have, how you're looking to balance between your goals domestically and internationally? Thank you.
Question: Aaron Grey - Alliance Global Partners - Analyst
: Really appreciate that color there, Beena. That was helpful. Second question for me. I just want to talk a little bit about the margin evolution. You
gave some great color there on the gross margin. So as we think about EBITDA profitability, where do you believe EBITDA margins have the potential
to get to in the medium-term? And what are some of the most meaningful levers?
You gave some color in terms of incremental synergies that you found going from $10 million to $15 million. Was that more so on the gross margin
side or on the SG&A side? And then, how much of those synergies have been realized today? So any color in terms of the margins, how we should
think about the evolution will be helpful. Thanks.
Question: Aaron Grey - Alliance Global Partners - Analyst
: Okay. Great. Really appreciate that color. I'll go ahead and jump back into the queue.
Question: Frederico Gomes - ATB Capital Markets - Analyst
: Hi, good morning. Thanks for taking my questions. First question is on the cash flow. We saw negative cash flow this quarter. I think a good portion
of that was related to working capital. So first, could you maybe talk about the drivers behind those working capital changes this quarter, maybe
the key items here that drove that?
And second, could you talk about your cash flow expectations for the remainder of the year, things like movements in working capital, CapEx, as
well as the potential margin expansion and the seasonality that you mentioned as well? Thanks.
Question: Frederico Gomes - ATB Capital Markets - Analyst
: Yeah. Maybe just the second part of the question, related for your expectations for the remainder of the year. I guess, you answered sort of the
question about the working capital for the second half, but also CapEx and the impact of the potential margin expansion, yeah.
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MAY 12, 2025 / 12:00PM, OGI.TO - Q2 2025 Organigram Global Inc Earnings Call
Question: Frederico Gomes - ATB Capital Markets - Analyst
: Perfect. I appreciate that, Greg. And then, maybe, just a second question for me. If you could comment on your strategy for the US hemp-derived
THC market. I know that you talked a little bit about that. We know there's a lot of brands in the marketplace today. A lot of other companies
investing in that market as well. So how do you plan to differentiate? And in regards to margins in that segment, when do you think they could be
accretive, and they could be meaningful to your overall margins? Thank you.
Question: Frederico Gomes - ATB Capital Markets - Analyst
: Thank you very much, Beena.
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MAY 12, 2025 / 12:00PM, OGI.TO - Q2 2025 Organigram Global Inc Earnings Call
Question: Yewon Kang - Canaccord Genuity - Analyst
: Hi, good morning. Thank you for taking my question. Apologies if I missed some of the remarks in the opening statements, but the international
sales saw a significant sequential increase. So just wondering if you could provide some color on what drove that growth. Was it primarily due to
the expanded orders from existing partners like the Sanity Group, or did you onboard new customers during the period? Thank you so much.
Question: Yewon Kang - Canaccord Genuity - Analyst
: Thanks for that color. Just the second one from me here is on the Collective Project acquisition. It's been a few weeks and, obviously, very early
days since integrating that brand into your platform, but I was wondering if you guys could provide any color into any insight that you might have
gained from having exposure into the US hemp-derived space. Any differences between how the recreational market functions even on the
consumer level and any insights there would be helpful. Thank you.
Question: Yewon Kang - Canaccord Genuity - Analyst
: Thank you for the color. I'll hop back into the queue.
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