Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 47% year-over-year to $7,900,000, exceeding guidance of $7,800,000, driven by balanced growth in the Vinia business [6][22] - Gross profit rose by 53% to $4,600,000, representing a gross margin of 58.5%, up from 56.2% in the same quarter last year [22][23] - Net losses for Q1 2025 totaled $2,300,000, or $0.13 per share, compared to a net loss of $6,600,000, or $0.48 per share in the same quarter last year [23][24] Business Line Data and Key Metrics Changes - The Direct to Consumer Health and Wellness Products Division, led by Vinia, accounted for the majority of revenue, with total active subscribers exceeding 50,000 in the USA [6][10] - The Amazon channel represented 20% of the business, showing improvements in customer conversion and repeat purchase rates [6] - The CDMO services division has signed multiple customers, including a partnership with Tate and Lyle for developing next-generation plant-based sweeteners [16][17] Market Data and Key Metrics Changes - The company reported a significant increase in gross margins, attributed to scaling operations and cost efficiencies [7][8] - The rollout of new products, including superfood tea and coffee, is expected to capture additional market segments [10][12] Company Strategy and Development Direction - The company aims to achieve adjusted EBITDA breakeven at $11,000,000 to $12,000,000 in quarterly revenue by the second half of 2025 [18] - Strategic focus includes expanding the direct-to-consumer portfolio, investing in R&D for process improvements, and building AI-powered tools for CDMO services [19] - The company plans to launch new products targeting younger consumers and expand into the hydration and beauty markets [62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute and deliver on the company's mission to democratize life-changing compounds [25] - The company is optimistic about the growth potential in the pharmaceutical sector, driven by increasing interest in non-GMO and plant-based compounds [72][74] - Management highlighted the importance of regulatory flexibility and the potential for significant revenue opportunities in the pharmaceutical market [73] Other Important Information - Cash and cash equivalents as of March 31, 2025, totaled $3,400,000, an increase from $2,400,000 at the end of 2024 [24] - The company raised $3,900,000 in debt financing during the quarter, primarily from existing investors [24] Q&A Session Summary Question: Can you provide details on the Phase two portion of the CDMO contract? - The transition to Phase two involves moving from solid media to liquid media for cell conditioning, expected to take six to nine months [28][30] Question: How long will it take to narrow down targets with Tate and Lyle? - Significant work is underway, with a comprehensive update expected before the end of the year [32] Question: Should we anticipate continued gross margin expansion? - Management expects continued improvements in gross margins alongside revenue growth [34] Question: How many products contributed to revenue in Q1? - The majority of revenue came from three product lines, with expectations to increase to four by Q2 [39][40] Question: Will marketing costs drop due to increased ad inventory? - The company is focused on reducing marketing costs as a percentage of revenue while exploring new channels [42][46] Question: Does the second quarter guidance include CDMO contributions? - Yes, it includes revenue recognition from existing projects and potential new catalysts [47] Question: How many CDMO programs can be run concurrently? - The company can handle five to seven projects at one time in the initial stages [51] Question: What is the timeline for the olive cell product? - The product is expected to launch in 2026, with a faster ramp-up anticipated due to complementary marketing strategies [84]
BioHarvest Sciences Inc(BHST) - 2025 Q1 - Earnings Call Transcript