What happened

Shares of Aurora Cannabis (NYSE:ACB) were skyrocketing 39.2% as of 10:56 a.m. EDT on Friday. The huge gain came after the Canadian cannabis producer announced better-than-expected fiscal 2020 third-quarter results after the market closed on Thursday.

Aurora's Q3 net revenue increased 18% over the prior quarter to 78.4 million in Canadian dollars ($55.6 million), excluding provisions of CA$2.9 million. This trounced the average analyst estimate of Q3 revenue of CA$66.7 million.

Cannabis leaf with a green arrow pointing up and a stock chart in the background

Image source: Getty Images.

So what

For months, most of Aurora's news has been negative. Its across-the-board revenue growth in the third quarter gave investors a pleasant surprise.

While Aurora's unexpectedly strong growth received the most attention, there were other positive stories in the company's Q3 update. Perhaps the most important was Aurora's significant reduction in cash burn. The company used CA$118 million less in cash during the third quarter than it did in the previous quarter.

This lower cash burn should help Aurora achieve its goal of generating positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). The company said that it expects to reach this goal in the quarter ending Sept. 30, 2020.

Now what

Aurora's improvement in the third quarter doesn't change the company's biggest problem: It's still unprofitable. The company is likely to require more cash in the not-too-distant future. In the meantime, the marijuana stock will likely remain highly volatile.