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Miguel Martin -- Chief Executive Officer

Thank you, Kevin. We had a strong Q2 and look forward to building on that momentum. Our prime positioning as a leader within nationally legal cannabis market has set the foundation for top line growth and higher profitability as we further penetrate existing markets such as Canada, Europe and Australia and enter new ones as they open. In doing so, we will place more distance between ourselves and our peers by leaning into what sets Aurora part, including, first, capitalizing on rapidly evolving global medical cannabis opportunities backed by our EU GMP manufacturing facilities, unparalleled scientific knowledge, genetics and regulatory expertise; second, leveraging our continued focus on operational excellence so that we can maintain our envy bill margin profile in medical cannabis the highest margin industry segment; and third, maintaining and solidifying our balance sheet to maximize flexibility while also continuously focusing on profitable growth, as evidenced by our record adjusted EBITDA.

With that, let me now briefly share some highlights related to our quarterly results. Net revenue grew 29%, including record revenue from global medical cannabis, which itself represented 41% year-over-year growth. Within Global medical cannabis, international revenue increased 93%. The contribution from high-margin international revenue exceeded that of Canadian medical cannabis for the first time and amounted to 57% of total global medical cannabis revenue.

This shift demonstrates how we have successfully positioned ourselves to benefit from opportunities across the globe. -- which are balanced by the stability we see in the maturing Canadian market. In addition, let me touch on Vevo's performance. Vivo already has a formidable presence within North America's controlled environment and agricultural industry and is significantly increasing its production capacity to support higher demand through the conversion of the Aurora Sky and Aurora Sun facilities.

Even in its slower seasons, which correspond to our fiscal second and third quarters in Q2, we were able to increase revenue by a robust 21% through organic growth and increased product offerings, such as Orchids arising from greater capacity. On profitability, we achieved record outcomes in adjusted gross profit and adjusted EBITDA, which is the result of our continued focus on the profitable global medical cannabis business segments. Let's now discuss our business in greater detail. Global medical cannabis is our flagship segment, serving the diverse needs of patients across multiple nationally regulated markets.

It grew 41% year over year and generated 76% of our total revenue and 98% of our adjusted gross profit. Most of this growth stemmed from international markets. However, Canadian Medical grew 3%, and we maintained our dominant leadership position. The Canadian market remains a stable contributor to our overall medical business as we benefit from a combination of insurance covered and self-paying patients.

Our ability to remain at the forefront of the domestic medical cannabis industry is because of our ongoing investments in science and innovation anchored by our breeding and genetics facility in Comox, British Columbia. Over time, we believe there should be upside to unlocking the addressable usage market, which currently encompasses only 1% of the Canadian adult population. Canadian patients appreciate and seek out our steady stream of next-generation cultivars, along with other innovative products. And to take advantage of increased interest in medical cannabis as part of healthcare options made available to them, we launched the newly developed CBD lozenge in collaboration with Vectura Fertin Pharma.

Let's now turn to our international business, beginning with Australia, our second largest market after Canada. We are No. 2 in Australia, which is emerging as the largest medical market in the world outside of North America, sized at AUD 400 million annually according to the Pennington Institute. The Australian market's high regulatory standards represent significant barriers to entry, providing a distinct advantage to us over our competitors.

Notably, we were one of the first Canadian LPs to receive good manufacturing practice certification from the Australian regulatory authority, TGA, for our two largest Canadian manufacturing facilities. And in fact, 90% of our annual production comes from these EU GMP and TGA GMP certified facilities. In Q2, the following two factors drove our increased revenue and EBITDA contributions. First, we benefited from a full quarter contribution from MedReleaf Australia as all previously sold inventory has flowed through since we completed the purchase of the remaining interest in the subsidiary in February.

And second, we experienced increased sales due to a broadened product portfolio that includes past deals, live resin cartridges and an expanded range of high-quality cultivars. Most recently, we announced an enhanced product range of premium medical cannabis oils in Australia, which include a variety of cannabinoid ratios to support personalized treatment options for patients. Our mission with MedReleaf Australia is to expand access to high-quality medical cannabis options for patients across the country. And on a related note, our leadership there gives us an advantage in expanding sales into New Zealand, a smaller but important emerging market in its own right.

Turning to Europe and beginning with Germany, our operating history goes back more than six years, and our credentials are virtually unmatched as we hold the No. 3 market share for flower and the No. 2 market share for insured patients. Growth in the German market is due to cannabis descheduling, which contributed to the significant increase in international medical cannabis revenue during Q2.

It is clear that more patients will become registered and pharmacies will expand to support the increase in prescription volumes. In fact, there's already a visible uptick in patients, including those that are self-paying. Right now, we are focused on maintaining consistent and reliable supply of our high-quality EU GMP manufactured products to our pharmacy partners so that we can continue to meet the growing needs of German patients. And to that end, we have a considerable capacity to support higher product volumes through both our EU GMP facilities in Canada, as well as our facility in Leuna, Germany.

The Leuna facility has also been granted permission to expand cultivation under Germany's new Medical Cannabis Act, and we are wanting to select few companies to receive an enhanced license. -- exemplifying our commitment to high-quality manufacturing, long-established regulatory expertise and unparalleled commitment to compliance. We recognize that changes in Germany are also likely to have a broader effect on the expanding acceptance of medical cannabis across Europe, and we will be ready for these opportunities. Our agility and a unique set of capabilities including expertise in meeting high regulatory requirements and cultivating high-quality products will enable us to win as these markets develop.

With that in mind, let's discuss Poland, our second largest European market. After sales were impacted in Q1 due to the import permit process, they rebounded in Q2 because of increased permits and the continued strong demand from Polish patients for high-quality medical cannabis. In the U.K., we are gaining traction with patients through our latest innovation and widened distribution channels, resulting in significant revenue growth, leading to a new record quarter for this market. We saw an increase in demand for EU GMP manufactured flower, which aligns well with 90% of our internal manufacturing capacity being EU and TGA GMP certified.

The expansion of our latest genetics offer higher yields and a lower cost per gram to produce, which has given us the ability to significantly increase our output capacity, especially as these new cultivars begin to establish themselves in key international markets. Given the success we have made with our medical first cannabis strategy through the first half of the fiscal year, we think we are well positioned for a successful fiscal 2025. Our optimism is anchored by our commitment to delivering continued profitable growth, positive cash flow in Q3, maintaining a strong balance sheet and operational excellence. These factors are the building blocks to being able to deliver ongoing and sustainable improvements to our financial performance.

I would now like to turn the call over to Simona for a detailed financial overview.

Simona King -- Chief Financial Officer

Thank you, Miguel, and good morning, everyone. Q2's performance was underpinned by the following: first, net revenue of $81.1 million represented 29% growth supported by record net revenue of $61.3 million from our high-margin medical cannabis segment. Second, quarterly profitability consisted of consolidated adjusted gross margin at 54% and 300 basis points higher than last year, resulting in a record adjusted gross profit of $42.6 million. Third, adjusted EBITDA grew 210% to $10.1 million, a new record for the company and our eighth consecutive quarter of positive adjusted EBITDA.

And finally, we ended the quarter with approximately $152 million in cash and cash equivalents and no debt in our cannabis business. It is these financial results that are a true validation of our efforts, and I am pleased to now review them in detail with you. Medical cannabis net revenue rose by 41% to $61.3 million, which consisted of 3% growth in Canada and 93% growth internationally. Medical cannabis comprised 76% of total net revenue and 98% of total adjusted gross profit during the quarter.

This marked an increase from 69% of net revenue and 85% of adjusted gross profit from the year ago period, the result of higher medical revenue and higher medical margins in the current year quarter. The increase in Canadian medical revenue was due to increased sales to insurance covered patients with larger basket sizes. The increase in international medical cannabis revenue was primarily due to higher sales in Australia, Germany, Poland and the U.K., driven by strong patient demand for our latest innovation and the significant overall growth in these markets. Adjusted gross margin for medical cannabis was 68%, up from 63% in the year ago period, which far exceeded our 60% target.

Several factors drove this increase, including: first, sustainable cost reductions; second, higher selling prices in Australia; and third, improved efficiency in our production operations with our shift to supply in the European markets from Canada. Consumer cannabis net revenue was $10.4 million, down from $12 million in the year ago period. The decline was the expected result of our decision to prioritize the supply of our GMP manufacture products to our high-margin international business. Adjusted gross margin in consumer cannabis was 14% compared to 27% due to sales of our higher-margin products in the year ago period.

In our plant propagation segment, net revenue increased to $8.6 million, up from $7.2 million in the year ago period due to a combination of organic growth and increased product offerings. Recall that EVO historically delivers lower revenue in the summer and fall months with about 25% to 35% of plant propagation revenue and up to 20% of EBITDA earned in the second half of the calendar year. Plant propagation adjusted gross margin was 19%, down from 22% in the year ago period, reflecting modest fluctuations due to the seasonal timing of lower-margin product revenue and ramp-up of the Orchid business. Our consolidated adjusted SG&A rose to $31.7 million, up from $27.7 million in the year ago period due to the incremental SG&A following the acquisition and full ownership of MedReleaf Australia.

This additional expense is now being offset by increased revenue and EBITDA contributions. Our balance sheet remains one of the strongest in the global cannabis industry. We held approximately $152 million in cash and cash equivalents as of September 30. Our cannabis operations are completely debt free, while our Deco business holds $57.5 million in nonrecourse debt that is secured by a significant fixed asset base held at people.

Cash used in operating activities was $24.9 million, down from $30.9 million in the year ago period. The improvement was due to increased revenue and improved contribution margin and changes in working capital. In Q2, cash used in operating activities include the net working capital investment due mainly to our payment of a number of annual and onetime cash items. Let me now provide some thoughts on Q3.

We expect to see similar sequential net revenue and adjusted gross margins across our global medical cannabis business, supported by year-over-year growth in Europe and Australia. We expect to see seasonally reduced revenues and gross profit for plant propagation in line with historical seasonal trends. Positive adjusted EBITDA is expected to continue, while our Q3 free cash flow is anticipated to be positive again based upon the following: first, continued increases in global medical cannabis driven in part by the full recognition of revenue in Australia and further growth in our key European markets. Second, operating expenditure and adjusted gross margins in line with previously stated targets.

And third, disciplined working capital management. To conclude, with two fiscal quarters now behind us, the foundation for a successful fiscal 2025 is well set, and we will continue to focus on the execution of our stated plan. Thank you for your time. I'll now turn the call back to Miguel.

Miguel Martin -- Chief Executive Officer

Thanks, Simona. Let's wrap up with a few key takeaways. Medical cannabis is a large addressable market with a bright future due to the increasing rate of patient access across the world. We have a unique ability to take advantage of this opportunity due to our leadership position and the proven portability of our business model.

We have established a track record of profitability that we were able to continue and expand upon. And we have a strong balance sheet with a sizable cash balance and no cannabis debt that enables us to be opportunistic. Our excitement and optimism are made possible by a high-performing team who are dedicated to operational excellence as we continue to grow and open the world to cannabis. And with that, thank you for your interest in Aurora, and we can now take your questions.

Operator, please open the line.

Questions & Answers:

Operator

[Operator instructions] The first question is from Frederico Gomes from ATB Capital Markets. Please go ahead.

Frederico Gomes -- ATB Capital Markets -- Analyst

Hi. Good morning. Thanks for taking my questions. Congrats on the great quarter.

First question on the revenue growth that you saw in the global medical cannabis sales. So we know those sales are sometimes, I guess, quite volatile because of the timing of some of those shipments, etc. So would you say that the sales level is sort of representative of what you will be doing going forward? And in terms -- what sort of visibility do you have on that? And the growth sort of sustainable from these levels?

Miguel Martin -- Chief Executive Officer

Got it. And Fred, thanks for the question. Let me start, and then I'll let Simona give some points here. The answer to your last part first, yes, we do think these are sustainable.

And as you mentioned, the shipments sometimes are lumpy. We've seen, as we mentioned in our comments around Poland, that sometimes the permitting process, which really is outside any sort of patient demand or sort of traditional sort of demand for growth. aren't always connected. But if you look at the breadth of our model, which allows us to have, I think, more consistency, having significant sales in U.K., Germany, Poland Australia and New Zealand, you see these things smooth out.

So we think the baseline is there, and we think it can grow. Importantly, we think the margins are also solid in this business, which is important. And we're also seeing new markets come on with a pretty consistent pattern. So we're very bullish on international cannabis.

It's hard, as we've mentioned. The regulatory hurdles are significant. The products have to be EU GMP or TGA, GMP which creates a barrier which we think is an advantage for us. But overall, we think these levels are not only sustainable, but they're going to grow.

Anything Simona you would add?

Simona King -- Chief Financial Officer

Nothing really except to point out that this is the first quarter that we're able to record the full revenue for our Australian business post acquisition. So that's contributed to the growth as well.

Frederico Gomes -- ATB Capital Markets -- Analyst

Perfect. Second question, I'm curious about your RAC business in Canada. It's obviously much smaller than the medical platform. And I guess most of your profits are coming from medical.

So how do you think about that BRAC platform? Do you see any chances of growing that? Does it make sense to keep it given that you're medically focused right now. So how should we think about recreational going forward?

Miguel Martin -- Chief Executive Officer

Sure. Yes. It's a great question. So obviously, right now, you only have two countries internationally that allow RAC sales, one Canada and one is Uruguay, let's talk about Canada.

The Canadian system is an interesting one. The Canadian government has done more for recreational cannabis than anybody else. That being said, there are still some challenges to it that make it difficult and also lower the margins on it significantly. So we, quite a bit, almost three years ago, made the decision to focus on medical cannabis, which is the highest margin is growing piece.

And I think if you look at our earnings this quarter, you'll see that that decision was a good one. Now, we continue to keep a small position in Canadian RAC. We have less than a two share and we think that's important. First, we gain a lot of consumer insights about products, preferences, pricing and a variety of different things.

Secondly, we do see interaction between recreational sales and medical sales. And so, as internationally, at some point, obviously not today, you would see environments go from medical to RAC, we think that would give us an advantage. And then, third, it also helps us with different aspects of innovation. So we like it where it's at.

We have a modest position in it in Canada. We learn a lot from it. It colors a lot of what we do, but no one should lose sight of the fact that our primary focus is the high-margin growing medical business where we're dominant in Canada, and we're leaders across the world.

Frederico Gomes -- ATB Capital Markets -- Analyst

And if I can ask just one more question here. About capital allocation, you're now close to your free cash flow goal, I guess, for next quarter, and you have lots of cash on the balance sheet. That free. So how do you plan to allocate that capital is M&A something that you would be more, I guess, actively considering now that you are free cash flow positive? Do you plan to invest organically in the business, just capital allocation options and how are you looking at them?

Miguel Martin -- Chief Executive Officer

Yes. Let me start it, and then Simona can take the tail end of it. I think from our standpoint, we look at capital allocation in three ways. First is you're right.

We took a lot of time and a lot of hard work in order to clean up the balance sheet, and we're proud to have one of the strongest cash positions with no debt on our cannabis business. And so, that was an important piece for us. Second, we do continue to invest in our own business, whether that's enhancements to our EU GMP and TGA GMP facilities or the world-class genetics or the science and innovation those are internal investments that we see return on right away. And then, third, we like to have that balance sheet in order to be opportunistic.

And if something were to come available, particularly as valuations have become more reasonable, we think we'd be in a strong position. Simona, anything you'd like to add to that?

Simona King -- Chief Financial Officer

No, I think you covered it, Miguel.

Miguel Martin -- Chief Executive Officer

All right. Thank you. Thank you, Fred.

Frederico Gomes -- ATB Capital Markets -- Analyst

Thank you.

Operator

[Operator instructions] The next question is from Pablo Zuanic from Zuanic & Associates. Please go ahead.

Pablo Zuanic -- Analyst

Thank you. Miguel, I have a few questions, but first, can I ask by asking you your impressions following the results of the U.S. election. How does that impact Aurora if in any way? And what would you say to those kind of investors that were so vested in Florida, going reg or the reform process in the U.S.

that are so focused on MSO stocks, what would you say from your perspective? Thank you.

Miguel Martin -- Chief Executive Officer

Yes. I mean, Pablo, it's a great question. And obviously, the U.S. is the largest potentially addressable market.

Aurora for a long time has said a couple of things. First is that medical cannabis, conservative global medical cannabis is the most consistent highest margin and predictable part of the overall segment. This election and what happened in those four states, I think, continue to reinforce that the position that we took is right. You had four states look at it.

Florida was obviously the big one. They needed 60%. They came in at 55%. The only state in the U.S.

of before that passed was Nebraska, and it was a medical provision that went through. And so, I think it reinforces the position we've taken in our investments and with our focus around the world. I think secondly, both candidates and obviously now with the Trump administration have talked about medical cannabis as sort of a piece there. And so, what I would say to investors is it's a big world out there.

And I understand the interest in the U.S., and I understand the amount of focus there was on Florida, But investors in the cannabis companies that want to look for sustainability and profitability should be aware that there are large growing markets. As you well know, in Australia and Germany and Poland and U.K. with more coming on all the time, and those are more consistent and more predictable. And the companies that are being successful in those markets are the same ones time and time again, like Aurora.

And so, while I'm sure there's disappointment for what happened, particularly in Florida, there's a lot of bright news and a lot of optimism that investors should have about what's happening in Europe and Australia and other parts of the world on cannabis. I think the U.S. will get there at some point. Today is not that point.

But I do believe and what we've said consistently is that it will be medical first, the FDA will be involved in the regulation of it. And that Aurora is the largest medical cannabis company in Canada with a strong relationship between Health Canada and the FDA and everything we do around the world, will be well, well positioned for the U.S. when they get there.

Pablo Zuanic -- Analyst

Look, and just moving on to -- just comparing your Australian and German operation. I mean, obviously, from the acquisitions you made in Australia, you have more control of the overall business, and that's leading to growth apparently based on what you described. Is that an opportunity in Germany or you're pretty much fully integrated there, at least from a sales and distribution perspective there. I'm just trying to understand, even in Poland, if there's room to do what you did in Australia to do in Germany and Poland or you were already there?

Miguel Martin -- Chief Executive Officer

Yes. I think we're already there. I mean, if you look at what we -- and you know this, when you look at what we have in Germany, first and foremost, the point of differentiation is we have a production facility in Germany. We're one of only three.

So that's different than, say, Poland or Australia. Secondly, as we've talked about, Germany is expanding quite rapidly. But we've got not only all the infrastructure and the people and the trade relationships that we need in Germany, but I think we're also expanding into some of the different aspects of the German growth. Australia was about getting that infrastructure.

I think to be honest, in catching up in a way to where we were with Germany. MedReleaf Australia is the No. 2 player in Australia. And so, we wanted to have full control over that entity.

I was down there a bit ago, and it's a great market, a fast-growing market, and we think one that's really going to reward companies with high-quality innovative products. The other thing that's different about Australia and Germany is you can sell a broader breadth of products. So whether it's ingestibles or different aspects of a full medical portfolio, there's greater opportunity with that, which I think better takes advantage of the full portfolio of medical products that we have produced in Canada and shipped to Australia.

Pablo Zuanic -- Analyst

OK. And one last one, if I can. We're starting to hear about some cities in Germany doing these pilot programs, I guess, for the quasi reg program. Could we have that an impact on medical sales or the way the medical market develops in Germany.

And I guess part B of that question, just remind us in terms of what do you see as underlying growth in the German market right now and whether you are running at a rate or slightly below or slightly above?

Miguel Martin -- Chief Executive Officer

Yes. So let me try to take those in order. As you well know, there were provisions in the descheduling that would allow individuals to grow their own plants and to have these social clubs, We've not seen, particularly in markets that have reimbursed provisions like, say, in Canada, that impacts. So we're not worried about that in its early days.

I will say the regulators in Germany and others that regulate that industry these sort of early days there, but there is a significant amount of growth in patient growth, particularly in the self-payer market, where we're No. 1 in Germany. So we don't see any sort of impact from any of those provisions. I think in terms of the percentage growth, it's hard to give you a specific number because there isn't syndicated data that would give you an exact number.

I think overall, we would be comfortable in saying we're seeing pretty significant growth in Germany and we need a little bit more time in order to quantify exactly what that looks like, say, quarter over quarter.

Pablo Zuanic -- Analyst

Thank you.

Miguel Martin -- Chief Executive Officer

Thank you.

Operator

This concludes the question-and-answer session. I'd like to turn the floor back over to Miguel Martin for closing comments.

Miguel Martin -- Chief Executive Officer

Listen, we appreciate everybody's interest in Aurora. It was a tremendous quarter, and we think the future is incredibly bright for medical cannabis and also particularly for Aurora, as we take advantage of it. Thank everybody for your time, and we look forward to your continued interest in Aurora Cannabis.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Kevin Niland -- Director, Strategic Finance and Investor Relations

Miguel Martin -- Chief Executive Officer

Simona King -- Chief Financial Officer

Frederico Gomes -- ATB Capital Markets -- Analyst

Pablo Zuanic -- Analyst

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Aurora Cannabis (ACB) Q2 2025 Earnings Call Transcript was originally published by The Motley Fool