BioHarvest Sciences Inc. (BHST) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $8.5 million, a 41% increase year-over-year. Growth was fueled by balanced performance across vinia.com and Amazon, plus revenue contribution from the CDMO services division.
Gross Margin 60%, an 800 basis point increase from 52% in the same year-ago quarter. Improvement reflects scale and technology leverage, deployment of larger bioreactors, enhanced manufacturing yields, and digitization of production workflows.
Gross Profit $5.1 million, a 65% increase year-over-year. The increase was attributed to benefits of increased manufacturing scale and improved manufacturing yields.
Operating Expenses $6.9 million, up from $4.8 million in the same year-ago quarter. The increase was primarily due to higher marketing spend, development of the Health Pros' Affiliate program, and higher expenses from the CDMO service division.
Net Loss $4 million, compared to $0.7 million in the same year-ago quarter. The increase in net loss was due to higher operating expenses and one-time costs associated with NASDAQ corporate compliance upgrade.
Adjusted EBITDA Loss $1.3 million, compared to $1.2 million in the same year-ago quarter. On a percentage of revenue basis, adjusted EBITDA loss totaled 14.7%, compared to 20.7% in the same year-ago quarter.
Cash and Cash Equivalents $3.7 million as of June 30, 2025, compared to $2.4 million as of December 31, 2024.
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Operating Highlights
VINIA Daily 2X Formula chews: Launched in June, designed for athletes and active individuals, targeting a younger demographic. Certified for global antidoping standards.
SuperFood Tea SKUs: Introduced English Breakfast and Matcha Green Tea in K-Cup compatible pods.
VINIA Espresso: Expected to launch soon in Nespresso-compatible format.
VINIA Blood Flow Hydration Solution: A powdered electrolyte mix targeting the $13 billion U.S. electrolyte drinks market, launching in October.
VINIA Health Pros' Professional Affiliate program: Aimed at engaging health practitioners and influencers to drive subscriber growth. Targeting 300 partners by year-end.
Amazon sales: Accounts for 20% of total sales, with VINIA being the #1 resveratrol-only product on Amazon in the U.S.
Gross margin expansion: Improved by 800 basis points to 60% due to larger bioreactors, better manufacturing yields, and digitization.
Supply chain efficiencies: Reduced transportation costs and packaging materials by consolidating shipments, adding 50 basis points to gross profit margin.
CDMO division milestones: Achieved Stage 2 for a pharmaceutical partner and signed a contract for a fragrance molecule.
AI-enabled discovery phase: New service offering for identifying botanical compounds for cosmetics, pharmaceuticals, and nutrition, priced at $35,000-$50,000 per project.
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Risk or Challenges
Supply Chain Efficiency: The company has made efforts to improve supply chain efficiency, such as consolidating shipments for cost savings. However, any disruptions in the supply chain could impact cost savings and operational efficiency.
CDMO Business Development: The company is expanding its CDMO services, but the success of these projects depends on technical milestones and securing new contracts. Failure to meet these milestones or attract new clients could hinder growth.
Health Pros' Professional Affiliate Program: The program aims to drive subscriber growth at lower acquisition costs. However, its success depends on the ability to onboard and retain influential partners, which could be challenging.
Electrolyte Drinks Market Entry: The company plans to enter the competitive $13 billion electrolyte drinks market. Success depends on differentiating its product and gaining market share in a crowded space.
AI-Enabled Discovery Phase for CDMO: The new service offering aims to accelerate CDMO customer projects. However, its success depends on the adoption by clients and the ability to deliver actionable insights.
Financial Performance: The company reported a net loss of $4 million in Q2 2025, with increased operating expenses. Achieving adjusted EBITDA breakeven by Q4 2025 is critical but not guaranteed.
Cash Reserves: Cash and cash equivalents totaled $3.7 million as of June 30, 2025. Limited cash reserves could pose a risk if revenue targets are not met or expenses increase unexpectedly.
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Guidance & Outlook
Adjusted EBITDA breakeven: The company is on track to achieve adjusted EBITDA breakeven by Q4 2025, driven by gross margin expansion, growing VINIA subscription revenue, and accelerating CDMO traction.
Revenue growth: Revenue for Q2 2025 increased 41% year-over-year to $8.5 million, in line with guidance. The company expects continued revenue growth driven by VINIA products and CDMO services.
Gross margin expansion: Gross margins expanded by 800 basis points to 60% in Q2 2025, reflecting scale, technology leverage, and supply chain efficiencies. The company anticipates further margin improvements.
VINIA product expansion: The company plans to launch new VINIA products, including VINIA Espresso and VINIA Blood Flow Hydration Solution, targeting new consumer demographics and market segments in the second half of 2025.
CDMO services growth: The CDMO division expects to announce multiple new contracts in the second half of 2025, including projects in pharmaceutical, nutrition, and fragrance industries.
Health Pros' Professional Affiliate program: The company aims to enroll 300 health professionals by the end of 2025 to drive subscriber growth and lower acquisition costs.
AI-enabled discovery phase for CDMO: A new AI-enabled discovery service for CDMO customers is expected to accelerate the rate of new high-value projects entering Stage 1 contracts.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How has the 2X chew launch progressed, and what is the outlook for the hydration launch?
A:The 2X Formula feedback has been phenomenal, with 25 reviews on Amazon and a 5-star rating. The product is premium-priced at $79 but offers strong value with 800 milligrams of VINIA per chew. The company is focusing on building momentum and increasing marketing spend in Q3 and Q4. The hydration product, a powdered stick beverage, is positioned as a game-changer with clean ingredients and unique blood flow hydration benefits. It targets a $4 billion U.S. market and will be marketed through regular and Health Pros' channels.
Q:What is the status of the CDMO pipeline and the Tate & Lyle opportunity?
A:The CDMO pipeline is significant, with high single-digit leads, including pharma, nutraceutical, and food companies. The company expects to announce 1-2 new deals by year-end. The Tate & Lyle partnership is progressing well, with strong collaboration and ongoing tissue culture work. The partnership may open new opportunities beyond the current scope.
Q:Will the company be impacted by the implementation of tariffs, and how will it respond?
A:The final tariff impact from Israel to the U.S. is 15%. The company has managed this through cost efficiencies and had budgeted for a higher tariff rate of 17%. The impact is manageable and factored into the P&L and projections.
Q:What are the different sales channels, and how are they being managed?
A:The core sales channels are vinia.com (80% of business) and Amazon (20%). Additional channels include a growing direct-to-doctor professional business, international purchases, and the new Health Pros' channel. The Health Pros' channel, targeting doctors, nutritionists, and other health professionals, is expected to contribute 20% of the business and improve marketing efficiency.
Q:What is the outlook for margins, and are there opportunities for improvement?
A:Margins have improved to 60%, with opportunities for further optimization through cost efficiencies and scaling. The company has maintained the price of its core SKU at $99 since 2021, despite inflation. New products like hydration and mix management are expected to improve margins further.
Q:What innovations have been made in the botanical synthesis process, and what is the status of facility expansion?
A:The company has digitized its facility to optimize yield and potency, developed new technologies for harvesting and drying, and is working on next-generation bioreactors. Facility expansion is planned, with a move to 2,000-liter bioreactors and above. These innovations aim to improve gross margins and support the CDMO business.
Q:When will the CDMO business contribute meaningfully to revenue, and what is the focus of its pipeline?
A:The CDMO business is expected to contribute meaningfully starting early next year, with existing projects moving through phases and new projects entering Phase 1. The pipeline includes pharmaceutical, nutraceutical, and fragrance opportunities, with significant financial potential.
Q:What milestones should be expected in the current quarter?
A:The Health Pros' channel will start contributing in September, and the hydration product is expected to launch with Informed Sports certification. The true impact of these initiatives will be seen in Q4. CDMO updates may also be shared in the next 6 weeks.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the Tate & Lyle partnership's progress, stating only that the relationship is strong and new opportunities may arise. Similarly, they did not provide clear timelines or specifics for the fragrance opportunity within the CDMO pipeline, despite its significant potential.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Affiliate program
Amazon contribution
Blood Flow
CDMO customer
CDMO development
CDMO partner
Flow Hydration
Formula chew
Group LLC
Health Pros
Hydration Solution
LLC Research
Professional Affiliate
Pros Professional
Research Division
Stage contract
SuperFood
VINIA Blood
VINIA end
bet
candidate
commerce channel
discovery phase
driver
electrolyte
flow oxygen
formulation
fragrance
health pro
inflection
influencers
medium
mix
nutrient
tissue
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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