BioHarvest Sciences, Inc. Q1 FY2025 earnings call

• VINIA revenue grew driven by vinia.com and Amazon, with over 50,000 active subscribers in USA and 90% recurring revenue from vinia.com.
• Launched VINIA SuperFood Tea, Coffee, and is preparing to launch Daily 2X Formula Chews (Informed Sport certified).
• CDMO division signed marquee partnership with Tate & Lyle and completed Stage 1 of a pharma CDMO program.
• Utilizing proprietary AI tools in R&D for optimization, and built infrastructure to handle multiple projects in parallel.
• Aim to reach adjusted EBITDA breakeven at $11-12M quarterly revenue in H2 2025.

BioHarvest Sciences has two main segments. The Direct-to-Consumer Health and Wellness products division, led by VINIA, saw revenue rise 47% year-over-year to $7.9 million in Q1 2025, exceeding guidance. The majority of revenue comes from VINIA capsules, with growth in Amazon channel and new products like VINIA SuperFood Tea, Coffee, Daily 2X Formula Chews, and upcoming hydration products. Gross margin improved to 58.5% from 56.2% the prior year, driven by scale and efficiency. The CDMO services division has signed partnerships, including with Tate & Lyle and a NASDAQ-listed pharmaceutical partner, with Stage 1 of a CDMO program completed, and is focused on developing high-margin revenue through nonrecurring engineering fees and royalty-based manufacturing.

• Aim to achieve adjusted EBITDA breakeven at $11-12M quarterly revenue in second half of 2025.
• Plan to expand direct-to-consumer portfolio with new products and clinically backed compounds like olive cell product.
• Invest in R&D for Botanical Synthesis 2.0 to improve gross margin and compound development speed.
• Build AI-powered CDMO tools to speed up go-to-market for compounds and reduce R&D costs.
• Expect CDMO growth with new catalysts and deals in 2025.

Q: Please provide color on the Phase 2 portion of the pharma CDMO contract with the NASDAQ-listed partner and timeline?

A: Phase 2 moves from solid media to liquid media, starting with Erlenmeyers and moving to small/medium bioreactors, expected to take 6-9 months.

Q: How long to narrow down targets with Tate & Lyle to start scaling production?

A: Expect to give more comprehensive update on Stage 1 outcomes by end of 2025.

Q: Should we anticipate gross margins to continue expanding as top line grows?

A: Yes, expect continued gross margin improvement as revenue grows and operationalization continues.

Q: How many products contributed to revenue in Q1 and expected by end of year?

A: Three product lines in Q1, expecting four by Q2 (Chews) and five by end of year (hydration).

Q: Could marketing costs drop going forward due to ad inventory supply?

A: Focus on reducing sales and marketing as % of revenue, using new channels like international shipping, YouTube, TikTok, and health pro influencer programs to improve efficiencies.

Q: Does second quarter guidance include CDMO contribution?

A: Yes, includes revenue recognition from existing CDMO projects and expects additional catalysts in Q2.

Q: How are helping pharma companies navigate regulatory issues with unique CDMO method?

A: Pharmaceutical companies are seeking innovative methods due to high costs of chemical synthesis, and our method offers consistent compounds, simpler regulatory path, and FDA familiarity.

Q: How quickly to anticipate ramp of olive cell product?

A: Ramp could be much faster than VINIA due to complementary nature and bundling opportunities, aiming for 2026 launch contingent on clinical trials.