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 [5][20] - Gross profit rose by 53% to $4,600,000, representing 58.5% of total revenue, up from 56.2% a year ago, primarily due to increased manufacturing scale and improved yield [20][21] - Net loss for Q1 2025 was $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 [21][22] 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, and recurring subscribers making up 90% of revenue [6][13] - The Amazon channel represented 20% of the business, with improvements in customer conversion and repeat purchase rates [6] - The company launched new products, including a superfood tea lineup and plans for a hydration beverage, targeting significant market segments [9][12][60] Market Data and Key Metrics Changes - The company is expanding its reach into new consumer segments and channels, including international shipping and social media platforms like TikTok [42][43] - The market for non-GMO, plant-based compounds is growing, with increasing consumer awareness of health benefits related to blood flow and longevity [8][79] 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, focusing on balancing growth with profitability [17][18] - Strategic investments will be made in expanding the direct-to-consumer portfolio, enhancing R&D processes, and building AI-powered tools for CDMO services [18] - The company is targeting a 20% adjusted EBITDA margin for its direct-to-consumer division and higher margins in the CDMO segment [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its growth strategy and deliver life-changing compounds, highlighting the synergy between the direct-to-consumer and CDMO divisions [23][70] - The company is optimistic about the increasing interest from pharmaceutical companies in its botanical synthesis technology, which offers consistent and economically viable compounds [70][71] Other Important Information - The company raised $3,900,000 in debt financing during the quarter, increasing cash and cash equivalents to $3,400,000 [22] - The company is preparing to launch the olivoboscoside cell product in 2026, targeting significant market opportunities in liver health and cholesterol management [13][79] Q&A Session Summary Question: Can you provide details on the Phase two portion of the CDMO contract? - Management explained that Phase two involves moving from solid media to liquid media for cell conditioning, with an expected timeline of six to nine months [27][28] Question: How long will it take to narrow down targets with Tate and Lyle? - Management indicated that significant work is underway, with a comprehensive update expected by the end of the year [30] Question: Should we expect continued gross margin expansion as revenue grows? - Management affirmed the intention to drive continued gross profit margin improvement alongside revenue growth [31][32] Question: How many products contributed to revenue in Q1, and how many are expected by year-end? - Management noted that three product lines contributed to Q1 revenue, with expectations to increase to four by Q2 and five by Q3 or Q4 [36][38] Question: Will marketing costs drop due to increased ad inventory? - Management highlighted efforts to reduce marketing costs as a percentage of revenue while exploring new channels for customer acquisition [39][44] Question: Does the second quarter guidance include contributions from the CDMO business? - Management confirmed that the guidance includes revenue recognition from existing CDMO projects and potential new catalysts [45][46] Question: How many CDMO programs can be run concurrently? - Management stated that the current capacity allows for five to seven concurrent projects in stage one [49] Question: What is the long-term opportunity for the beauty product? - Management discussed a focused strategy on high-margin categories, including health and beauty, with plans for a launch in Q1 next year [60][61]
BioHarvest Sciences Inc(BHST) - 2025 Q1 - Earnings Call Transcript