BioHarvest Sciences, Inc. Q1 FY2026 earnings call

Organizational and Strategic Updates

• BioHarvest implemented a new two-lens operating and reporting framework to align with its two distinct growth business models, optimizing capital allocation and performance.
• A leadership transition was completed: CEO Zaki Rakib leads overall corporate strategy and CDMO growth, while co-founder Ilan Sobel (with deep FMCG experience) leads D2C growth, including retail expansion.
• Rakib converted R&D from a single-project pipeline to a parallel multi-project development organization, enabling simultaneous advancement of four active programs.
• Consolidated manufacturing, quality control, assurance and regulatory affairs under unified leadership to support simultaneous multi-compound production at the new facility, planned to launch in H2 2027.

CDMO Operational Highlights

• Completed Stage 1 and signed a $1.2 million Stage 2 contract for a rare high-value fragrance ingredient for a UAE-based investment group; BioHarvest retains 20% ownership of the developed composition for a long-term royalty stream, with commercialization targeted for H2 2027. The global premium fragrance segment is a $23 billion addressable market within the broader $58.9 billion scents and fragrances industry.
• Successfully completed Stage 1 of the saffron development collaboration with Safran Tech, creating a stable cell bank matching the molecular profile of key saffron active ingredients (crocin, picrocrocin, saffronel), and moved to Stage 2 to generate pre-commercial testing material.
• Hired a new Head of Business Development in March 2026 to strengthen strategic partner positioning, and participated in the Vida Foods Europe Conference, holding ~30 high-value meetings with prospective partners that reinforced confidence in CDMO growth prospects. The company will participate in the upcoming Bio-US Convention in San Diego in June 2026.

D2C (Vinia Brand) Operational Highlights

• Vinia has over 90,000 active users, with the new Vinia Blood Flow Hydration product achieving rapid adoption, 4.7/5 average consumer reviews across channels, and contributing 20% of new customer revenue YTD, second only to the core capsule line.
• Q1 2026 was a deliberate reset quarter: the marketing team conducted a full review of the marketing mix, pausing/reducing spend in some channels to test performance, which caused a temporary sequential revenue decline from Q4 2025. In March, the team began scaling a revised mix with lower reliance on TV and a greater shift to digital channels to target a younger broader consumer base.
• Full marketing optimization will continue through Q2 2026, with full benefits expected in H2 2026, supported by seasonal demand for the hydration product. The long-term goal is to grow Vinia to $100 million in annual revenue within three years.

BioHarvest reports performance under a new two-segment (Two Lens) framework: the direct-to-consumer (D2C) Products segment and the contract development and manufacturing organization (CDMO) Services segment. Total company Q1 2026 revenue increased 8% year-over-year (YoY) to $8.5 million, with a gross profit of $5.0 million (59% gross margin) and a net loss of $2.6 million (11 cents per share). Adjusted EBITDA loss for the quarter was $1.2 million, split as $904,000 loss for the CDMO segment and $286,000 loss for the Products segment. YoY adjusted EBITDA losses were $953,000 for CDMO and $235,000 for Products in Q1 2025. As of March 31, 2026, the company held $20.2 million in total cash and cash equivalents, up from $3.4 million a year prior.

• Full year 2026 total CDMO revenue (including intercompany Vinia production revenue) is maintained at $12 million to $14 million, with third-party development revenue expected to come in at the previously guided $4 million to $6 million, despite quarterly revenue fluctuations.
• Full year 2026 D2C revenue guidance is maintained at $38 million to $42 million, with adjusted EBITDA profit projected between $0.5 million and $2 million.
• Full year 2026 total company adjusted EBITDA loss guidance is maintained at $4 million to $5 million.
• D2C expects sequential quarter-over-quarter revenue growth for the remainder of 2026, with improved lifetime value to customer acquisition cost (LTV:CAC) metrics.
• The new manufacturing facility is on track to begin production in H2 2027.

No new material risks were explicitly discussed on the call. Management acknowledged that Stage 1 of the botanical synthesis development process carries the highest technical risk, noted that current capacity constraints limit near-term expansion into the large volume low-margin nutrition segment, and referenced standard forward-looking statement risk disclosures in the company's existing SEC filings. The temporary Q1 2026 revenue decline was a known, deliberate outcome of the marketing optimization reset, with full benefits not expected until H2 2026.

Q: What is the market opportunity and go-to-market timeline for the saffron development program? / A: Saffron is a multi-billion dollar total market. BioHarvest will initially target the faster-to-market dietary supplement segment, and the partnership with Safran Tech gives BioHarvest input over regulatory strategy and indication selection. The company will use AI to optimize active ingredient ratios for specific indications (including cognition, ADHD, PTSD), after which it will conduct trials. Manufacturing and commercial launch as a capsule product is targeted for late 2027, aligned with the new facility launch. A combination product of saffron and Vinia is also under consideration.

Q: How does BioHarvest evaluate and prioritize CDMO pipeline opportunities across industries? / A: BioHarvest's platform is industry-agnostic, but current capacity constraints lead the company to prioritize nutraceutical and fragrance opportunities, which offer strong margins, faster speed to market, and shorter regulatory approval cycles. Nutrition is large-volume low-margin, so the company will only pursue limited opportunities in that space for now. Pharma opportunities are selectively pursued due to capacity and longer development timelines, with more nutraceutical and cosmetics/cosmeceutical deals expected in the next few quarters.

Q: What is the timeline for converting conference meetings into new signed CDMO contracts? / A: BioHarvest currently has capacity to advance 3-4 new CDMO projects by the end of 2026, and one of these is expected to come from the Barcelona Vida Foods Conference meetings, with faster conversion than expected due to strong industry demand for differentiated innovation. Pre-de-risked (already completed Stage 1) molecules from the existing CDMO pipeline will enable faster deal closing for this opportunity. Additional conference-generated leads will be added to the 2027 and beyond pipeline.

Q: What is the status of the new manufacturing facility development? / A: Detailed engineering and technical design work for the facility is currently ongoing to integrate next-generation technology for harvesting and processing. CapEx spending will begin to build in Q2 and Q3 2026, with production on track to start in H2 2027. The company currently has sufficient cash to fund the build to initial production, but additional capacity expansion may require more capital as early as H2 2027, driven by CDMO contract demand, which management views as a positive outcome.