BioHarvest Sciences Inc. (BHST) Q4 2024 Earnings Conference Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company shows significant revenue growth and improved gross profit, despite a net loss. Optimistic guidance, strong VINIA sales, and new product launches like espresso pods support positive sentiment. Management effectively addresses working capital needs through partnerships. However, concerns remain due to debt financing and unclear responses on CDMO pipeline and clinical trial timelines. Overall, the financial improvements and strategic developments outweigh these concerns, suggesting a positive stock price movement.
Key Financial Performance
Revenue $7.3 million (62% increase year-over-year from $4.5 million in Q4 2023), driven by strong VINIA sales and exceeding prior guidance.
Gross Profit $4.1 million (80% increase year-over-year from $2.3 million in Q4 2023), with gross margins at 56.7%, improved due to increased manufacturing scale and cost reductions.
Operating Expenses $5.8 million (increase from $4.8 million in Q4 2023), but decreased to 80% of revenue from 107% year-over-year, primarily due to increased marketing and CDMO expenses.
General and Administrative Expenses 20% of revenue (decreased from 34% in Q4 2023), reflecting improved operating leverage as the company scales.
Net Loss $3 million ($0.17 per share, improved from a net loss of $7.2 million or $0.53 per share in Q4 2023), indicating better financial performance.
Adjusted EBITDA $1.8 million (decrease from $2.4 million in Q4 2023), reflecting the company's ongoing operational adjustments.
Cash and Cash Equivalents $2.4 million (decreased from $5.4 million as of December 31, 2023), with a subsequent raise of $3.9 million in debt financing.
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Operating Highlights
VINIA Sales Growth: VINIA, the flagship red grape cell-derived nutraceutical, accounted for the majority of the $25.2 million revenue in 2024, with over 50,000 active subscribers and a 90% revenue derived from subscriptions.
New Product Launches: Upcoming launches include VINIA Superfood Espresso Coffee in June 2025 and VINIA Daily 2X Formula Q targeting active consumers.
New Product Categories: Expansion into functional coffee, tea, hydration powders, and cosmetics, leveraging the success of VINIA.
Market Expansion: VINIA is currently sold in the U.S. and Israel, with regulatory approval in Canada and efforts underway in other key markets.
CDMO Partnerships: Established partnerships with major industrial partners, including Tate & Lyle for plant-based sweeteners.
Gross Margin Improvement: Gross margins increased to 57% in Q4 2024 from 51% a year ago, with a year-over-year improvement from 45% in 2023.
Operational Efficiency: General and administrative expenses decreased to 20% of revenue in Q4 2024 from 34% in the same year-ago quarter.
Production Capacity: New bioreactors implemented, increasing capacity by 22%.
Strategic Focus: The company aims to balance growth with profitability, targeting adjusted EBITDA profitability at $11 million to $12 million in revenue per quarter by H2 2025.
R&D Investment: Investing in R&D for process improvements and AI capabilities to enhance efficiency and speed to market.
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Risk or Challenges
Regulatory Issues: The company is navigating the regulatory landscape for its products, with efforts underway to secure approvals in key markets beyond the U.S. and Israel.
Supply Chain Challenges: The company emphasizes the importance of ethically sourcing key plants and utilizing AI tools to optimize R&D processes, indicating potential supply chain risks.
Competitive Pressures: The company faces competition in the nutraceutical and wellness markets, necessitating continuous innovation and effective marketing strategies to maintain market share.
Economic Factors: The company is subject to economic fluctuations that could impact consumer spending on premium health and wellness products.
Financial Risks: The company reported a net loss of $3 million in Q4 2024, indicating financial risks associated with scaling operations and increasing marketing expenses.
Debt Financing: The company raised $3.9 million in debt financing, which may introduce financial obligations and risks associated with debt management.
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Guidance & Outlook
Revenue Growth: Achieved 99% revenue growth, totaling $25.2 million for the full year 2024.
Product Launches: Plans to launch VINIA Daily 2X Formula Q targeting active consumers in summer 2025.
CDMO Partnerships: Signed multiple CDMO customers, including a partnership with Tate & Lyle for plant-based sweeteners.
New Product Categories: Expanding into functional coffee, tea, and hydration powders.
AI Integration: Developing AI-empowered capabilities for faster compound development.
Revenue Guidance: Expecting continued high double-digit growth in core capsule business.
Adjusted EBITDA: Targeting adjusted EBITDA profitability at $11 million to $12 million in revenue per quarter by the second half of 2025.
Gross Margin Improvement: Aiming for a 20% adjusted EBITDA margin for products business and higher for CDMO.
Operational Efficiency: General and administrative expenses decreased to 20% of revenue, reflecting improved operating leverage.
Future Revenue Expectations: Anticipating significant growth from new product launches and CDMO services.
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Shareholder Return Plan
Net Loss: Net losses for the fourth quarter of 2024 totaled $3 million, or $0.17 per basic and diluted share, as compared to a net loss of $7.2 million, or $0.53 per basic and diluted share in the same year-ago quarter.
Cash and Cash Equivalents: Cash and cash equivalents, as of December 31, 2024, totaled $2.4 million, as compared to $5.4 million as of December 31, 2023.
Debt Financing: Subsequent to the quarter end, the company raised $3.9 million in attractive debt financing, primarily from existing investors.
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Key Q&A
Q:Can you give us a little bit of an update on some of the CDMO contracts you have signed, particularly the one with Tate & Lyle?
A:We've made great progress with Tate & Lyle, sourcing our key plant and working on critical tissue culture. We also signed a deal with a NASDAQ-listed pharmaceutical company, and we have a strong pipeline of opportunities in the CDMO business.
Q:When will VINIA be available in coffee pods?
A:We have successfully launched coffee and will be launching espresso compatible pods in May.
Q:How do you manage your working capital needs and growth needs with the balance sheet you have?
A:We leverage partnerships for R&D, allowing us to scale quickly without significant balance sheet pressure. Our direct-to-consumer model helps improve conversion rates and average order value.
Q:Can we expect sequential growth in revenue for 2025?
A:Yes, we expect compounded growth due to our subscription model and new product innovations.
Q:Is there any tariff-related issue on the D2C side?
A:We are in a favorable position regarding tariffs, as we have not increased prices since launching VINIA, while competitors may face price increases due to tariffs.
Q:Can you provide details on the olive cell compound and its commercialization process?
A:We are focused on a molecule called Verbascoside for non-alcoholic fatty liver disease. We are moving through the regulatory process and expect to start clinical trials soon.
Q:Are all bioreactors located in Israel?
A:Currently, all manufacturing is in Israel, but we plan to expand to the U.S. by 2028-2029.
Q:What is the opportunity to increase the basket size of subscribers?
A:We are focusing on bringing in new subscribers from coffee and tea drinkers, and we are seeing increases in basket size as we get more aggressive in trade-ups.
Q:What is the gross margin difference on coffee and tea products versus supplements?
A:Coffee and tea products have a number of margin points better than capsules.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific details of the CDMO pipeline and the exact timeline for the olive cell compound's clinical trials.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ET Greetings
Hunter Diamond
Informed Sport
Research Conference
Sport substance
Superfood Tea
Tea Portfolio
VINIA Superfood
Wainwright Hunter
product Informed
BHST Transcript
BioHarvest Sciences Inc. (BHST) Q3 2025 Earnings Call Transcript
Positive11-13
The earnings call highlights strong revenue growth, improved gross margins, and a strategic focus on expanding VINIA products and CDMO services. The Q&A section reveals positive sentiment towards new product launches and partnerships, despite some uncertainty in management's timeline clarity. The company's strategic initiatives and financial metrics indicate a positive outlook, leading to a positive sentiment rating.
BioHarvest Sciences Inc. (BHST) Q2 2025 Earnings Call Transcript
Positive8-11
The earnings call summary and Q&A reveal strong revenue growth, improved margins, and promising product launches, notably the VINIA 2X Chews and hydration product. The partnership with Tate & Lyle and significant CDMO pipeline add optimism. Despite increased operating expenses and net loss, the company manages tariff impacts well and plans further margin improvements. Analysts show positive sentiment towards product and channel expansions, boosting the outlook. These factors suggest a positive stock price movement, especially given the company's strategic focus on high-growth areas and market expansion.
BioHarvest Sciences Inc. (BHST) Q1 2025 Earnings Call Transcript
Positive5-15
The earnings call indicates strong revenue growth, improved gross margins, and promising future revenue expectations. Despite some operational risks and unclear management responses, the company's expansion into new product categories and CDMO services, along with AI integration, suggests a positive outlook. The lack of a shareholder return plan is a slight downside. Overall, the positive financial performance and strategic initiatives outweigh the concerns, leading to a positive sentiment.
BioHarvest Sciences Inc. (BHST) Q4 2024 Earnings Conference Call Transcript
Positive3-31
The company shows significant revenue growth and improved gross profit, despite a net loss. Optimistic guidance, strong VINIA sales, and new product launches like espresso pods support positive sentiment. Management effectively addresses working capital needs through partnerships. However, concerns remain due to debt financing and unclear responses on CDMO pipeline and clinical trial timelines. Overall, the financial improvements and strategic developments outweigh these concerns, suggesting a positive stock price movement.
BHST Report
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