ChromaDex(CDXC) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Summary Financial Highlights Niagen Bioscience achieved significant financial growth in Q2 2025, with substantial increases in net sales and net income, alongside strong gross margin and adjusted EBITDA performance Q2 2025 Financial Highlights (Year-over-Year Comparison) | Metric | Q2 2025 | Change | Prior Year Period | Source | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $31.1 million | +37% | $22.739 million | | Tru Niagen® Sales | $22.7 million | +22% | - | | Niagen® Ingredient Sales | $7.4 million | +135% | - | | Gross Margin | 65.0% | +480 bps | - | | Sales and Marketing Expense as % of Net Sales | 26.4% | -420 bps | - | | Net Income | $3.6 million | Shifted to Profit | Breakeven | | Earnings Per Share (EPS) | $0.05 | - | Breakeven | | Adjusted EBITDA | $5.0 million | +221% | - | | Operating Cash Flow (Six Months) | $9.1 million | - | Breakeven | | Cash at Period End | $60.5 million | - | - | Operational Highlights The company made multiple advancements in product research, market expansion, and strategic partnerships, including clinical study releases, licensing agreements, trial completion, and expanded product availability - Released the first peer-reviewed clinical study on Niagen® in Werner syndrome patients, demonstrating significant increases in NAD+ levels and improvements in cardiovascular and skin health markers[4] - Signed a global exclusive license agreement with Haukeland University Hospital for proprietary development and commercialization rights of Niagen® as a potential therapeutic for Parkinson's disease, including access to Phase III NOPARK trial clinical data[4] - Completed patient dosing for the Phase III NOPARK trial, the largest and most comprehensive clinical study of NAD+ enhancement in early Parkinson's disease patients to date, with data analysis underway and results expected in 2026[4] - Tru Niagen® launched as the exclusive in-room amenity and Niagen IV at Equinox Hotel Spa in New York, marking the company's entry into the luxury hospitality market[4] - As of August 2025, Niagen Plus products (including Niagen IV and injectables) are available in over 800 leading health clinics across the U.S., a significant increase from 475 clinics in December 2024, reflecting accelerated clinic adoption and demand for clinically managed NAD+ solutions[4] CEO Commentary Niagen Bioscience CEO Rob Fried emphasized the company's pioneering role in the NAD+ market and stated that the company continues to invest in the future while achieving profitable growth - CEO Rob Fried stated: "We delivered an outstanding second quarter, with net sales of $31.1 million, representing 37% year-over-year growth, and net income of $3.6 million. As pioneers in the burgeoning NAD+ market, we continue to invest in the future while remaining focused on profitable growth"[4] Detailed Financial Performance (Three Months Ended June 30, 2025) Net Sales Net sales increased by 37% year-over-year to $31.1 million in Q2 2025, driven by growth in both Tru Niagen® and Niagen® ingredient sales, strong e-commerce performance, and the launch of pharmaceutical-grade Niagen® sales Net Sales (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $31.1 million | $22.7 million | +37% (+$8.4 million) | - Growth was primarily driven by a combination of increased Tru Niagen® sales and Niagen® ingredient sales (including both food-grade and pharmaceutical-grade), along with strong performance in e-commerce channels[5] Gross Margin Gross margin improved by 480 basis points to 65.0%, primarily due to shifts in product and business mix, lower-cost inventory purchases, and improved labor and overhead utilization from higher sales volumes, with the company expecting normalization in future periods Gross Margin (Q2 2025) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | Gross Margin | 65.0% | +480 bps | - Gross margin improvement was primarily due to changes in product mix, business mix, lower-cost inventory purchases, and improved labor and overhead utilization from higher sales volumes[6] - The company anticipates gross margin normalization in future periods, as some drivers (such as lower-cost inventory purchases) may be temporary[6] Operating Expenses Total operating expenses increased by 22% to $17.0 million, reflecting the company's investment in business growth and brand awareness Operating Expenses (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Operating Expenses | $17.0 million | $13.9 million | +22% (+$3.1 million) | Sales and Marketing Expense Sales and marketing expenses increased by $1.2 million but decreased by 420 basis points as a percentage of net sales to 26.4%, reflecting improved sales efficiency and disciplined investment Sales and Marketing Expense (Q2 2025) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | Sales and Marketing Expense | +$1.2 million | - | | As % of Net Sales | 26.4% | -420 bps | - The increase in expense primarily reflects investments to support brand growth in the consumer segment[11] General and Administrative Expense General and administrative expenses increased by $1.6 million, or 28%, primarily due to higher employee-related costs, stock-based compensation, and professional consulting fees General and Administrative Expense (Q2 2025) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | General and Administrative Expense | +$1.6 million | +28% | - The increase was primarily driven by higher employee-related costs, stock-based compensation, and professional consulting fees[11] Research and Development Expenses Research and development expenses increased by $0.3 million, mainly due to higher professional consulting fees and employee-related costs Research and Development Expenses (Q2 2025) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | Research and Development Expenses | +$0.3 million | - | - The increase in expenses was primarily due to higher professional consulting fees and employee-related costs[11] Net Income and Adjusted EBITDA The company achieved net income of $3.6 million and EPS of $0.05 in Q2 2025, a shift from breakeven in the prior year, with Adjusted EBITDA significantly increasing by 221% to $5.0 million Net Income and Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $3.6 million | Breakeven | Shifted to Profit | | Earnings Per Share (EPS) | $0.05 | Breakeven | Shifted to Profit | | Adjusted EBITDA | $5.0 million | $1.6 million | +221% | Cash Flows from Operating Activities For the six months ended June 30, 2025, operating activities generated $9.1 million in net cash inflow, compared to approximately breakeven in the prior year, primarily driven by improved net income, increased accounts receivable collections, and a relative increase in accounts payable Cash Flows from Operating Activities (Six Months Ended June 30, 2025) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | $9.1 million | Breakeven | +$9.1 million | - The increase in cash inflow was primarily driven by improved net income, increased accounts receivable collections, and a relative increase in accounts payable, partially offset by a decrease in credit loss expense and an increase in inventory purchases[9] 2025 Full Year Outlook Niagen Bioscience raised its full-year 2025 revenue growth guidance to 22%-27% and expects a slight improvement in gross margin, while planning for increased absolute sales and marketing expenses with a declining percentage of net sales, maintaining R&D investment, and anticipating higher G&A expenses due to stock-based compensation and business growth 2025 Full Year Outlook Update | Metric | New Outlook | Old Outlook | 2024 Baseline | | :--- | :--- | :--- | :--- | | Net Sales Growth | 22%-27% YoY | 20%-25% YoY | - | | Gross Margin | Slight improvement YoY | - | 61.8% | | Sales and Marketing Expense (Absolute Amount) | Increase | Increase | $29.5 million | | Sales and Marketing Expense (as % of Net Sales) | Decrease | Stable | 29.6% | | R&D Expenses | Consistent with 2024 | - | $6.0 million | | General and Administrative Expense | Increase $7.0-$8.0 million | - | - | - Revenue growth reflects the continued expansion of the company's e-commerce business and growth in both new and existing partnerships[10] - Gross margin improvement is attributed to ongoing supply chain optimization, cost-saving initiatives, and overall business scale[10] - The increase in general and administrative expenses is primarily due to stock-based compensation, investments in business growth, and the absence of a $3.5 million royalty reversal from 2024[10] Company Overview About Niagen Bioscience, Inc. Niagen Bioscience is a global bioscience company focused on healthy aging, leading the field of nicotinamide adenine dinucleotide (NAD+) research through its world-renowned team of scientists and holding a patent portfolio for the NAD+ precursor nicotinamide riboside chloride (NRC, or Niagen®) - Niagen Bioscience is dedicated to healthy aging and is an innovator of the NAD+ precursor nicotinamide riboside chloride (NRC), commercially known as Niagen®[17] - The company's team leads NAD+ research, a key regulator of cellular metabolism whose levels decline with age and can be boosted by supplementing NAD+ precursors[17] - Nicotinamide riboside chloride and other NAD+ precursors are protected by Niagen Bioscience's patent portfolio[17] Products and Business Model The company offers Niagen® directly to consumers through its Tru Niagen® consumer product line and partnerships with global retailers and distributors, while also developing and commercializing proprietary ingredient technologies, including food-grade and pharmaceutical-grade Niagen®, supplied as raw materials to consumer product manufacturers and FDA-registered 503B outsourcing facilities, and providing natural product fine chemicals and related R&D services - The company offers Niagen® through its Tru Niagen® consumer product line, available at www.TruNiagen.com and through global retailers and distributors[18] - The company develops and commercializes proprietary ingredient technologies, including food-grade Niagen® and pharmaceutical-grade Niagen®, supplied as raw materials to consumer product manufacturers and U.S. FDA-registered 503B outsourcing facilities[18] - The company also provides natural product fine chemicals (phytochemicals) and related research and development services[18] Investor Information Investor Conference Call Niagen Bioscience will host an investor conference call on August 6, 2025, to discuss second-quarter financial results and provide a business update, with details including webcast links, dial-in information, and replay arrangements - The conference call will be held on August 6, 2025, at 4:30 PM ET (1:30 PM PT)[12] - Investors can access the webcast, earnings press release, and financial appendix through the investor relations section of the company's website[13] - A replay of the conference call will be available from 7:30 PM ET on August 6, 2025, until 11:59 PM ET on August 13, 2025, via the website and dial-in access[14] Contacts Investor Relations and Media Relations contact information is provided for company information and news - Investor Relations contacts: Reed Anderson and Stephanie Carrington of ICR, LLC, at NiagenIR@ICRInc.com[19] - Media Relations contact: Kendall Knysch, Senior Director of Communications, at Kendall.Knysch@NiagenBio.com[19] Forward-Looking Statements and Risks Important Note on Forward Looking Statements This press release contains forward-looking statements as defined by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are not historical facts and are typically identified by words such as "anticipate," "expect," "intend," and involve the company's intentions, beliefs, forecasts, and expectations for future performance - Forward-looking statements are not historical facts and are typically identified by words such as "anticipate," "expect," "intend," "estimate," "plan," "may," "will," and similar expressions[15] - Forward-looking statements include the CEO's quotes, the 2025 financial outlook (including revenue growth, gross margin, expenses, and investment plans), and statements related to Niagen Plus[15] Risks and Uncertainties Forward-looking statements are subject to various risks, including inflation, a history of operating losses, product sales growth and profitability, changes in consumer perception, reliance on third-party suppliers, risks of doing business in China, ability to obtain pharmaceutical-grade Niagen®, intellectual property maintenance, unsuccessful clinical trial results, and economic and market instability - Risks include inflation and adverse economic conditions, the company's history of operating losses, the growth and profitability of product sales, and the ability to maintain and develop sales, marketing, and distribution capabilities[16] - Other risks include changes in consumer perception of the company's products, reliance on single or limited third-party suppliers, risks of doing business in China, the ability to obtain sufficient pharmaceutical-grade Niagen® in a timely manner, and the ability to enter into appropriate contracts with FDA-registered 503B outsourcing facilities[16] - Also included are the ability to maintain and enforce existing intellectual property and obtain new patents, whether the potential benefits of NRC will be further supported, that R&D and clinical trial results may be unsuccessful or insufficient to meet regulatory standards, decisions by the FDA and other governmental agencies, and economic and market instability[16] Unaudited Condensed Consolidated Financial Statements Statements of Operations Unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, detailing net sales, cost of sales, gross profit, operating expenses, operating income (loss), non-operating income, income tax provision, and net income (loss) and earnings per share Unaudited Condensed Consolidated Statements of Operations | | Three Months Ended June 30 | | | Six Months Ended June 30 | | | :--- | :--- | :--- | :--- | :--- | :--- | | (In thousands of dollars, except per share data) | 2025 | 2024 | 2025 | 2024 | | Net sales | $31,117 | $22,739 | $61,598 | $44,892 | | Cost of sales | 10,891 | 9,046 | 22,041 | 17,743 | | Gross profit | 20,226 | 13,693 | 39,557 | 27,149 | | Operating expenses: | | | | | | Sales and marketing | 8,207 | 6,969 | 16,324 | 13,709 | | Research and development | 1,567 | 1,316 | 2,825 | 3,411 | | General and administrative | 7,267 | 5,664 | 12,451 | 11,016 | | Total operating expenses | 17,041 | 13,949 | 31,600 | 28,136 | | Operating income (loss) | 3,185 | (256) | 7,957 | (987) | | Non-operating income: | | | | | | Interest income, net | 552 | 241 | 1,011 | 480 | | Income (loss) before income tax provision | 3,737 | (15) | 8,968 | (507) | | Income tax provision | 128 | — | 296 | — | | Net income (loss) | $3,609 | $(15) | $8,672 | $(507) | | Net income (loss) attributable to common stockholders per share: | | | | | | Basic | $0.05 | $— | $0.11 | $(0.01) | | Diluted | $0.04 | $— | $0.10 | $(0.01) | | Weighted average common shares outstanding: | | | | | | Basic | 79,249 | 75,559 | 78,534 | 75,394 | | Diluted | 86,241 | 75,559 | 84,877 | 75,394 | Balance Sheets Unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, presenting the detailed composition of assets, liabilities, and stockholders' equity Unaudited Condensed Consolidated Balance Sheets | (In thousands of dollars, unless otherwise stated) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Current assets: | | | | Cash and cash equivalents, including restricted cash | $60,474 | $44,660 | | Accounts receivable, net of allowance | 9,656 | 7,768 | | Inventories | 14,406 | 9,192 | | Prepaid expenses and other assets | 2,143 | 2,482 | | Total current assets | 86,679 | 64,102 | | Leasehold improvements and equipment, net | 1,632 | 1,719 | | Intangible assets, net | 284 | 359 | | Right-of-use assets | 2,525 | 1,730 | | Other long-term assets | 405 | 368 | | Total assets | $91,525 | $68,278 | | Liabilities and Stockholders’ Equity | | | | Current liabilities: | | | | Accounts payable | $13,680 | $8,526 | | Accrued expenses | 7,381 | 7,817 | | Current portion of operating lease liabilities | 957 | 982 | | Current portion of finance lease liabilities | 6 | 12 | | Customer deposits | 303 | 611 | | Total current liabilities | 22,327 | 17,948 | | Deferred revenue | 2,674 | 2,579 | | Operating lease liabilities, less current portion | 2,329 | 1,657 | | Total stockholders’ equity | 64,195 | 46,094 | | Total liabilities and stockholders’ equity | $91,525 | $68,278 | Statements of Cash Flows Unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, showing net cash from operating, investing, and financing activities, and the ending balance of cash and cash equivalents Unaudited Condensed Consolidated Statements of Cash Flows | (In thousands of dollars) | Six Months Ended June 30 | | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash provided by / (used in) operating activities | $9,133 | $31 | | Net cash provided by / (used in) investing activities | (167) | (53) | | Net cash provided by / (used in) financing activities | 6,848 | 582 | | Net increase in cash and cash equivalents | 15,814 | 560 | | Cash and cash equivalents at beginning of period | 44,660 | 27,325 | | Cash and cash equivalents at end of period | $60,474 | $27,885 | Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA A reconciliation of net income (loss) to Adjusted EBITDA is provided, listing adjustments such as interest income, income tax provision, depreciation, amortization, non-cash stock-based compensation, severance and restructuring expenses, royalty reversals, and credit loss recoveries Reconciliation of Net Income (Loss) to Adjusted EBITDA | (In thousands of dollars) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Net Income (Loss) | $3,609 | $5,063 | $7,179 | $1,878 | $(15) | | Adjustments: | | | | | | | Interest income, net | (552) | (459) | (373) | (276) | (241) | | Income tax provision | 128 | 168 | 305 | — | — | | Depreciation | 158 | 158 | 151 | 164 | 170 | | Amortization of intangible assets | 38 | 37 | 38 | 38 | 37 | | Non-cash lease expense | 159 | 173 | 169 | 164 | 163 | | Stock-based compensation | 1,488 | 1,075 | 752 | 735 | 1,185 | | Severance and restructuring | 21 | 4 | (4) | 185 | 276 | | Reversal of previously accrued royalties and license maintenance fees (1) | — | — | (3,521) | — | — | | Recovery of credit loss related to legal settlement (2) | — | (1,325) | (1,325) | — | — | | Adjusted EBITDA | $5,049 | $4,894 | $3,371 | $2,888 | $1,575 | - Note (1): The reversal of previously accrued royalties and license maintenance fees relates to a supplemental agreement with Dartmouth, which waived certain obligations under the exclusive license agreement[29] - Note (2): The recovery of credit loss relates to a 2024 legal settlement with Elysium Health, LLC, paid in two installments, reversing a write-off from 2019[29] Non-GAAP Financial Information Disclosure The company provides Adjusted EBITDA as a non-GAAP financial measure to supplement GAAP financial data, aiming to offer additional information for management and investors to enhance understanding of the company's financial operating performance. The company believes this metric is material because excluded expenses are infrequent, variable in nature, or do not represent current cash outlays. However, this metric is not prepared in accordance with GAAP, may not be comparable to similar measures from other companies, and management primarily relies on GAAP results with Adjusted EBITDA as a supplementary tool - Adjusted EBITDA, a non-GAAP financial measure, is provided to supplement GAAP data, offering additional information to enhance understanding of the company's historical and current financial operating performance[30] - Adjusted EBITDA is defined as net income (loss) adjusted for interest, income tax provision, depreciation, amortization, non-cash stock-based compensation costs, severance and restructuring expenses, and other infrequent items such as royalty reversals and credit loss recoveries[31] - Non-GAAP financial measures are not prepared in accordance with GAAP, may not be comparable to similar measures from other companies, and management primarily relies on GAAP results with Adjusted EBITDA as a supplementary tool[31][32]