BioHarvest Sciences Inc. (BHST) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $7.9 million (up 47% year-over-year from $5.3 million), driven by the continued success of the VINIA family product.
Gross Profit $4.6 million (up 53% year-over-year), representing 58.5% of total revenue, up from 56.2% a year ago, primarily due to increased manufacturing scale and improved manufacturing yield.
Total Operating Expenses $6.3 million (up from $4.4 million year-over-year), with a decrease in marketing spend as a percentage of revenue to 46.8% from 48%.
Net Loss $2.3 million or $0.13 per share (improved from a net loss of $6.6 million or $0.48 per share year-over-year).
Adjusted EBITDA Loss $1.4 million (compared to an adjusted EBITDA loss of $1.1 million in the same year-ago quarter).
Cash and Cash Equivalents $3.4 million (up from $2.4 million as of December 31, 2024), with $3.9 million raised in debt financing during the quarter.
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Operating Highlights
New Product Launches: Rollout of VINIA SuperFood Tea lineup in individual sachets with a 4.9 out of 5 rating on Amazon. Upcoming launches include English breakfast tea and matcha green tea in K-Cup compatible pods, and VINIA Espresso in Nespresso-compatible pods.
Product Expansion: Launch of VINIA Daily 2X Formula Chews, an 800-milligram format for active consumers, certified by Informed Sport for safety in sports.
Future Product Development: Plans to launch olive verbascoside cell product in 2026, targeting liver health.
Market Positioning: VINIA is recognized as a premium product with a significant pricing premium, consistently ranking in the top 10 on Amazon.
Market Expansion: Expansion of VINIA product lines to capture younger consumers and increase revenue through new marketing channels.
Operational Efficiency: Improved gross margins by 227 basis points to 58.5% due to larger bioreactors and cost efficiencies.
Revenue Growth: Revenue rose 47% year-over-year to $7.9 million, exceeding guidance.
Strategic Shift: Focus on balancing growth with profitability, targeting adjusted EBITDA breakeven at $11-$12 million in quarterly revenue by H2 2025.
CDMO Services Growth: Successful completion of Stage 1 development for a major CDMO program with a NASDAQ-listed pharmaceutical partner.
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Risk or Challenges
Regulatory Risks: The company acknowledges that statements made during the call are forward-looking and may be subject to risks and uncertainties, including regulatory issues that could impact future financial results.
Competitive Pressures: Despite significant pricing premiums relative to competitive products, VINIA remains a top performer in its category, indicating ongoing competitive pressures in the market.
Supply Chain Challenges: The company emphasizes the importance of ethical sourcing of plants for its CDMO services, which may present supply chain challenges.
Economic Factors: The company is focused on balancing growth with profitability, which may be influenced by broader economic conditions affecting consumer spending and investment.
Development Risks: The CEO highlighted that Stage 1 of CDMO development carries the highest risk, indicating potential challenges in the development process.
Operational Risks: The company is investing in R&D and AI tools to improve efficiency and reduce costs, which may present operational risks if not executed effectively.
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Guidance & Outlook
Revenue Growth: Revenue rose 47% year-over-year to $7.9 million, exceeding guidance of $7.8 million.
Gross Margin Improvement: Gross margins improved by 227 basis points to 58.5%, up from 56.2% a year ago.
Product Expansion: Rollout of VINIA SuperFood Tea and new SKUs in the VINIA product line, including VINIA Daily 2X Formula Chews.
CDMO Services Growth: Successful completion of Stage 1 development for a major CDMO program with a NASDAQ-listed pharmaceutical partner.
Strategic Partnerships: Partnership with Tate & Lyle to develop next-generation, plant-based, zero-calorie sweeteners.
2025 Revenue Guidance: Expecting to reach adjusted EBITDA breakeven at $11 million to $12 million in quarterly revenue in the second half of 2025.
Long-term Margin Target: Targeting a 20% adjusted EBITDA margin for direct-to-consumer products and higher margins in CDMO.
Future Product Launches: Plans to launch olive verbascoside cell product in 2026, targeting liver health.
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Shareholder Return Plan
Shareholder Return Plan: The company has not announced any share buyback program or dividend program during the call.
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Key Q&A
Q:Could you provide a little bit of color on what is entailed in the Phase 2 portion of the contract and the time line for that to be completed before moving on?
A:Phase 2 has us moving from solid media to liquid media, which is the start of the process to get our cells conditioned to grow the critical phytomedicinal compound in liquid media. This phase typically takes 6 to 9 months.
Q:At what point or how long do you think it will take to narrow down the targets to one or two that you would then start scaling up production of?
A:We expect to give a more comprehensive update on how we're tracking on Stage 1 outcomes before the end of the year.
Q:Should we anticipate that as you continue to grow that top line that your gross margins will continue to expand as well?
A:We have driven significant revenue growth paired with improved gross margin performance, and we expect to continue seeing similar improvements over the course of this year.
Q:Can you clarify how many products contributed towards revenue in the first quarter? And how many products do you expect could contribute to revenues by the end of the year?
A:In the first quarter, three product lines anchored in the capsule business drove revenue. By the second quarter, we expect to add a fourth line, and by the end of the third quarter, we will move towards a fifth vertical.
Q:Could those potentially drop for you going forward given there may be more ad inventory supply in the market?
A:We have a focused effort to reduce sales and marketing as a percentage of revenue while opening additional channels and improving marketing efficiencies.
Q:Does your second quarter guidance include any contribution from the CDMO business?
A:Yes, it includes revenue recognition of existing projects and we expect to share significant news regarding additional CDMO catalysts in the near future.
Q:How many CDMO programs can you run at one time?
A:We currently have the capacity to concurrently run between five and seven projects at one time.
Q:How are you helping some of the pharmaceutical companies you're working with navigate any regulatory issues?
A:Pharmaceutical companies are looking for new vehicles to develop compounds due to rising costs. We have a simpler regulatory path and are working with regulatory consultants.
Q:How quickly do you anticipate a ramp of the olive cell product?
A:We see a significant opportunity with the olive verbascoside cell and expect the ramp-up to be much faster than VINIA due to complementary nature and bundling opportunities.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific timeline for narrowing down targets with Tate & Lyle, stating they would provide a comprehensive update before the end of the year. Additionally, while they mentioned the potential for marketing costs to drop, the response lacked specific details on how much they could decrease or the exact impact of market conditions.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI CDMO
Amazon category
Amazon channel
Amazon course
Amazon subscriber
Anderson Canaccord
BioHarvest consumer
BioHarvest olive
BioHarvest year
CDMO mission
CDMO platform
CDMO program
CDMO project
CDMO tool
CDMO unit
CFO market
Cup pod
Health Wellness
Stage development
SuperFood Tea
Synthesis platform
Synthesis technology
Tea lineup
VINIA SuperFood
Wellness product
ability cell
consumer Health
date
division CDMO
flow hydration
industry BioHarvest
level potency
longevity
olive verbascoside
portfolio VINIA
product line
relationship blood
role
rollout VINIA
sport drink
technology ability
verbascoside cell
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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