Dyadic International, Inc. (DYAI) Earnings

Management highlights

• Company Transition Progress - Dyadic has completed the transition from a pure platform technology company to a commercially focused biotechnology company, with products enabled by its C1 and DepoVis microbial platforms now entering commercial channels - Multiple revenue streams are being built: direct sales, OEM distribution, milestone payments, profit-sharing, and strategic partnerships, reducing reliance on a single product or market • Technology and Strategy Core - Proprietary platforms produce animal-free proteins and enzymes for large global markets, addressing drawbacks of traditional production (high cost, scaling challenges, reliance on animal inputs) while supporting sustainability goals - Strategy prioritizes large recurring markets for long-term value creation, with disciplined expense management and capital-efficient expansion via partner channels • Life Sciences Segment Updates - Received initial purchase orders for recombinant bovine transferrin in the cultivated meat segment; the product also serves cell culture, diagnostics, and bioprocessing applications - Launched recombinant animal origin-free DNA-S1 with Firmbox Bio, and signed an OEM distribution agreement with IBT Bioservices to commercialize DNA-S1 and transferrin via IBT's global channels, expanding reach while maintaining capital efficiency - Advancing development of additional recombinant growth factors and cell culture components to support the transition to animal-free media • Food and Nutrition Segment Updates - Development is ongoing for recombinant bovine alpha-lactalbumin (for infant, medical, and functional nutrition) under the BrigBio agreement, with customer sampling expected to begin in mid-2026 - Development of recombinant human lactoferrin for nutrition and wellness markets continues • Bioindustrial Segment Updates - The Fernbox Bio partnership continues advancing manufacturing scale-up and commercialization across multiple products; Fernbox fulfilled its first large-scale commercial order and is expanding sampling to Asia Pacific • Biopharmaceutical Program Updates - Programs are capital-efficient, partner-driven, and serve a strategic role in platform validation, non-dilutive funding, and future partnership opportunities - A $3.1 million Gates Foundation grant supports development of low-cost anti-malaria monoclonal antibodies, with ongoing studies showing C1-produced antibodies match current industry standards - A CEPI-supported collaboration (up to $2.4 million in funding) with Fondazione Biotecnopolo di Siena advances recombinant vaccine development, demonstrating C1's ability to rapidly generate high-yield, high-quality complex proteins - The portfolio includes additional programs for respiratory viruses, MERS, rabies, and emerging infectious diseases, expanding platform validation and future opportunity pipelines • Commercial Validation Milestones - ProLiant Health has commercially launched Albu-Free DX recombinant human albumin produced via Dyadic's platform, with Dyadic eligible for profit sharing; this launch validates industry willingness to commercialize C1-produced products - An enzyme partner has commercialized recombinant non-animal bovine chymosin after completing development milestones, providing a second key validation of the technology and commercial model - Inbound interest from potential partners and customers has increased following recent launches and announcements

Guidance

• Total operating expenses are expected to remain generally in line with 2025 levels, with total full-year 2026 cash burn expected to be equal to or lower than 2025's full-year cash burn of less than $5.7 million • Revenue growth is expected for 2026 across life sciences and food and nutrition segments, driven by recent product launches, expanding commercial activity, and growing customer engagement • Existing cash resources of $6.6 million as of the end of Q1 2026 are expected to provide cash runway into Q2 2027 • Dyadic will continue evaluating strategic partnerships and capital market opportunities to strengthen the balance sheet and support long-term growth • Initial royalty/revenue from Fernbox Bio bioindustrial products is expected in 2026 • Fibro's poultry vaccine partnership is on track to enter clinical trials in 2026, with potential regulatory approval in 12-24 months from that point, and expected milestones in 2026 or 2027

Segment performance

Total Q1 2026 revenue was $1.1 million, an 182% increase from $394,000 in Q1 2025. The revenue breakdown is: 1) Research and development revenue: $220,000 from the Perline Agreement; 2) Grant revenue: $277,000 from SAPI and the Gates Foundation; 3) Milestone revenue: $200,000 from the Enzymes partnership. No separate revenue contribution percentages are provided for individual product segments in the call. Total cost of revenue was $792,000, up from $298,000 in Q1 2025 due to higher activity in grant-funded and R&D programs. Internal R&D expenses decreased 4% year-over-year to $476,000, while G&A expenses increased 10% to $1.8 million. Net loss for the quarter was $1.95 million ($0.05 per share), improved from $2.03 million ($0.07 per share) in Q1 2025.

Risks & headwinds

• Growth in the cultivated meat segment is dependent on regulatory approval of individual customer products, which creates uncertainty around the timing and scale of revenue ramp • Commercial adoption of animal-free dairy and other food/nutrition products depends on achieving sufficient production scale to compete on cost with traditional milk-derived products • Biopharmaceutical product development and regulatory approval follows long timelines (5-7 years for vaccines), creating extended lead times for potential milestone and royalty revenue • As product sales scale, additional operational and headcount capacity will be required, which must be aligned with revenue growth to maintain cash discipline • Forward-looking statements around future results, revenue growth, and product development are inherently uncertain, and actual results could differ materially from projections; Dyadic does not undertake an obligation to update forward-looking statements

Analyst Q&A

• Q: How should investors expect the revenue ramp for recombinant bovine transferrin to proceed in the near and medium term? /

  A: Management expects steady but not hockey-stick growth in the near term. Initial growth will come from small kilogram-scale pilot orders, with significant volume increases tied to regulatory approval of cultivated meat products, which occurs on a per-product basis. Growth will also come from research use and sales to existing cell culture, diagnostic, and bioprocessing applications, supported by IBT Bioservices' upcoming launch, so the opportunity is not limited to cultivated meat.\n\nQ: Could Dyadic's C1 platform support rapid development of vaccines or antibodies for the newly emerging hunter virus, similar to COVID-19? / A: Management confirmed C1 is fully capable of supporting this work, with improved performance since COVID-19. The platform can now generate stable cell lines, produce purified high-quality target proteins from plasmids in under three weeks, faster and more cost-effectively than competing technologies. C1 has already completed a successful Phase 1 human trial and non-human primate studies, de-risking the platform for human use, putting Dyadic in a much stronger position for emerging pathogen opportunities than during COVID-19.\n\nQ: What progress has been made with Interlink, the business development partner focused on Asia Pacific? / A: Dyadic expanded the Interlink agreement to add Europe, building on Interlink's existing strong foothold in Japan and Asia Pacific. Interlink has already secured initial customer engagement in Japan, with samples shipped to prospective customers and product opportunities under identification. The partnership expands Dyadic's business development footprint cost-effectively, leveraging Interlink's existing regional teams and customer connections to identify distributors and advance opportunities that Dyadic does not have internal capacity to pursue on its own.\n\nQ: What is the near-term opportunity for Dyadic in cultured meat vs non-animal dairy, and which geographies have the most favorable regulatory environment for cultivated meat? / A: Management noted both segments need low-cost scalable production to compete, with more acute near-term demand in cultured meat, as producers must cut costs to gain market access post-approval. Non-animal dairy is a larger long-term market but requires more scaling to compete with traditional dairy, so near-term revenue will likely come faster from cultured meat. The U.S. is expected to have the most favorable regulatory path, as Dyadic uses the well-established self-affirmed GRAS pathway, and the company already has a GRAS-certified production organism dating to 2009.