Codexis Inc (CDXS) Q1 2024 Earnings Call Transcript Highlights: Strong Revenue Growth and ...
Total Revenue: $17.1 million in Q1 2024, up 32% year-over-year.
Product Revenue: $9.6 million in Q1 2024, a 14% increase from the previous year.
R&D Revenue: $7.5 million in Q1 2024, significantly up from $4.6 million last year.
Gross Margin: Improved to 49% in Q1 2024 from 46% in Q1 2023.
Net Income: Not explicitly mentioned, focus on revenue and margin improvements.
Earnings Per Share (EPS): Not specified in the provided details.
Free Cash Flow: Not directly mentioned, but cash position discussed with $85 million in cash and equivalents.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Codexis Inc (NASDAQ:CDXS) reported a strong financial start to 2024 with a 32% year-over-year increase in total revenues, reaching $17.1 million in Q1.
Product revenues grew by 14% year-over-year, demonstrating continued demand and market penetration.
Significant technical progress was made on the EcoSynthetix manufacturing platform, nearing the completion of a full-length RNA oligonucleotide synthesis.
Codexis Inc (NASDAQ:CDXS) secured a low to mid single-digit million dollar order for an engineered double-stranded RNA ligase with a large pharma company, indicating potential for more orders in 2025.
The company is on track with the construction of the Ecos Innovation Lab, which will enhance their capability to perform ligation on behalf of customers and optimize manufacturing processes.
Negative Points
Despite strong Q1 results, Codexis Inc (NASDAQ:CDXS) anticipates Q2 to be the lowest quarter of the year in terms of product revenue, expecting a decrease compared to Q2 2023.
The company's product revenues remain concentrated in a handful of large pharma customers, which could pose risks if diversification efforts do not succeed.
R&D expenses are expected to increase as operations ramp up related to the E-Co synthesis Innovation Lab later in the year.
There is a reliance on achieving further technical milestones, such as the full enzymatic synthesis of a full-length RNA molecule, which if delayed, could impact customer acquisition and revenue growth.
Codexis Inc (NASDAQ:CDXS) faces the challenge of transitioning R&D programs to commercial products to sustain long-term revenue growth, which is inherently uncertain and depends on the success of clinical trials.
Q & A Highlights
Q: Can you discuss any hurdles or final pieces between now and the TIDES meeting to fully synthesize the full-length COG oligo? A: Stefan Lutz, SVP of Research, mentioned that while they are close to completing the synthesis, they also aim to provide analytical details such as impurity profiles, which requires additional time to complete all experiments.
Q: Could you elaborate on the types of programs you are filling the pipeline with and the nature of engagements with mid to large size pharma? A: Kevin Norrett, COO, explained that they are focusing on expanding educational efforts and screening programs with midsize pharma and large biotechs, which are expected to translate into scale-up programs by the end of the year.
Q: Can you provide more details on the process from early access to finalizing the deal for the double-stranded RNA ligase order? A: Kevin Norrett described that the order came from an existing customized program developed over several years. The launch of new screening services and kits will allow customers to scale up variants more quickly, which is expected to shorten the time to reach significant sales.
Q: Regarding the $7 million guidance from the Roche deal, is there any change expected? A: Sri Ryali, CFO, confirmed that the guidance remains the same, with the majority of the R&D revenue for the year expected to come from their R&D services business.
Q: Could you discuss the potential size and impact of the second double-stranded RNA ligase program in development? A: Kevin Norrett indicated that the second program could potentially be larger as it is being evaluated not just for a specific asset but as a platform for multiple assets.
Q: Can you provide updates on other opportunities for your life science enzymes in addition to the RNA ligases? A: Kevin Norrett mentioned that they are exploring potential out-licensing opportunities for other life science enzymes in their portfolio, with plans to finalize these discussions within the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
