BioHarvest Sciences Q2 Earnings Call Highlights

Key Points

• BioHarvest reported Q2 revenue of $8.8 million, up 3.8% year over year, while its net loss narrowed to $3.7 million. However, the company lowered 2026 revenue guidance to $37 million–$40 million and expects a consolidated EBITDA loss of $3 million–$5 million.
• The company signed its first CDMO manufacturing and supply agreement, involving a UAE customer and a premium fragrance ingredient. The 20-ton commitment could generate $20 million–$30 million in 2027–2028, with production expected to begin in the first half of 2027.
• BioHarvest reduced its VINIA revenue outlook to $33 million–$35 million as it shifts spending toward manufacturing and CDMO opportunities. Management is targeting consolidated EBITDA breakeven in 2027 while seeking to avoid equity financing.

BioHarvest Sciences NASDAQ: BHST reported second-quarter 2026 revenue of $8.8 million, up 3.8% from $8.5 million a year earlier, while highlighting its first manufacturing and supply agreement within its contract development and manufacturing organization, or CDMO, business.

Chairman and Chief Executive Officer Dr. Zaki Rakib said the agreement involves a UAE-based customer and a rare premium fragrance raw material. The customer and product were not disclosed under a nondisclosure arrangement. BioHarvest said the 20-ton commitment could generate $20 million to $30 million in revenue during 2027 and 2028.

“Today’s announcement is an important strategic milestone in our quest to be the largest producer of cell-culture-based rare fragrances,” Rakib said.

Fragrance Production Expected to Begin in 2027

Rakib said BioHarvest expects to begin limited production of the fragrance ingredient during the first half of 2027 in a dedicated part of its existing facility. During the question-and-answer session, he said the company expects to recognize product-sales revenue in the first half of 2027 rather than waiting for larger-scale operations to begin later in the year.

Production is expected to begin with smaller bioreactors, followed by expansion into larger bioreactors during 2027. BioHarvest expects the larger facility it is designing to begin production in early 2028.

The fragrance agreement does not include upfront payments, Rakib said. Revenue is expected to be recognized as product is delivered under a schedule spanning 2027 and 2028, with a larger portion anticipated in 2028. Royalty terms have not yet been negotiated, though Rakib said BioHarvest also has a 20% ownership interest in the profit generated by the business associated with the customer partnership.

Rakib said the exclusivity arrangement currently covers 2027 and 2028 and that BioHarvest expects it will likely remain the manufacturer beyond that period. He reiterated the company’s prior projection that the fragrance opportunity could produce $180 million of revenue over the first five years from the start of manufacturing.

Quarterly Results and Updated Guidance

Gross profit was unchanged year over year at $5.1 million, though gross margin declined to 58% from 59%. Cost of revenue rose to $3.7 million from $3.4 million.

• Sales and marketing expense increased to $4.4 million from $4.0 million.
• Research and development expense increased to $1.7 million from $1.4 million.
• General and administrative expense declined to $1.5 million from $1.6 million.
• Total operating expenses rose to $7.6 million from $6.9 million.
• Net loss narrowed to $3.7 million, or $0.17 per share, from $4.1 million, or $0.24 per share.
• Adjusted EBITDA loss was $1.6 million, compared with a $1.2 million loss a year earlier.

Cash, cash equivalents and bank deposits totaled $16.2 million as of June 30, compared with $3.7 million a year earlier.

Management revised its 2026 consolidated revenue guidance to $37 million to $40 million, from prior guidance of $42 million to $48 million. Consolidated EBITDA loss is now expected to be $3 million to $5 million, compared with the prior expected loss of $3 million to $4 million.

Rakib said the company is pursuing consolidated EBITDA breakeven in 2027 and intends to manage cash with the aim of avoiding equity-based financing.

CDMO Priorities and Development Programs

BioHarvest said it is narrowing the focus of its CDMO business toward programs with higher value and a quicker path to manufacturing revenue. In the question-and-answer session, Rakib clarified that CDMO revenue guidance was tightened to a range of $4 million to $5 million from $4 million to $6 million, reflecting a decision to prioritize selected opportunities rather than pursue a broader number of potential projects.

The company said it is not discontinuing existing projects. Rather, it is seeking to use molecules already developed—including olive, pomegranate and blueberry-related assets—to support prospective CDMO arrangements instead of independently bringing additional consumer products to market. Rakib said VINIA remains the only product BioHarvest plans to market directly at this time.

BioHarvest also said it completed the first stage of a saffron development agreement, establishing a saffron cell bank. The milestone advanced the program to a second stage valued at $1.125 million, focused on scaling saffron biomass in bioreactors for pre-commercial testing and formulation work. BioHarvest retains a 25% ownership position in the saffron composition under development, in addition to potential future manufacturing royalties.

The company’s collaboration with Tate & Lyle was expanded in May from one sweetener compound to several plant-based sweetener molecules. Rakib said BioHarvest is discussing a potential model under which a large-volume customer could build its own manufacturing facility, while BioHarvest would provide technology transfer and receive royalties.

VINIA Spending Shift

BioHarvest reduced its full-year VINIA direct-to-consumer revenue outlook to $33 million to $35 million from $38 million to $42 million. The company now expects the business to post an EBITDA loss of $1.5 million to $2.5 million, compared with previous guidance for EBITDA of $0.5 million to $2 million.

Management attributed the change to reallocating spending toward manufacturing capacity, CDMO investments and channels it controls directly, rather than increasing customer-acquisition spending amid higher media costs. Rakib said VINIA had approximately 95,000 active customers, up 2% from both the prior year and the first quarter.

The company implemented its first VINIA price increase since May 2021 in June, raising prices by as much as 20% for new subscription customers beginning with their second order. Rakib said the company had not seen a material impact from the change. BioHarvest also plans to introduce VINIA Daily Chews in September and said it continues to pursue retail opportunities in the U.S. and internationally.

About BioHarvest Sciences (NASDAQ:BHST)

BioHarvest Sciences Inc is a biotechnology company that specializes in the development and commercialization of plant-based active ingredients through proprietary cell-culture technology. By growing undifferentiated plant cells in controlled bioreactor environments, the company aims to produce full-spectrum phytonutrients and botanical compounds that are difficult to obtain through traditional farming methods. This approach is designed to deliver consistent, high-purity extracts with reduced environmental impact and supply-chain variability.

The company's product portfolio focuses on applications across the cosmeceutical, nutraceutical and health-and-wellness markets.

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