Executive Summary

Q3 FY2025 revenues were $0.304M, down 36% year-over-year, with gross profit margin collapsing to ~2% as product and service volumes fell amid the wind-down of legacy businesses; operating loss widened to $3.7M .
Results significantly missed Wall Street consensus: revenue $0.304M vs $1.276M estimate and EPS of -$33.41 vs -$37.50 estimate; the revenue miss was material, driven by lower Tagging/testing volumes and timing of Therapeutic DNA orders .
Management executed strategic actions: exited MDx Testing Services (ADCL) effective June 27, 2025, continued exit of DNA Tagging, and reduced headcount; monthly operating cash burn declined sequentially to $0.934M, with further reductions expected in Q4 FY2025 .
No Q3 earnings call; management reiterated pivot to LineaRx synthetic DNA/mRNA solutions, and expects ISO 13485 certification in Q1 FY2026 to support commercialization and quality positioning .
Near-term stock reaction catalysts: magnitude of revenue shortfall, cash burn trajectory improvement, segment exits simplifying the narrative, and regulatory/quality milestones; regained Nasdaq minimum bid compliance on July 2, 2025 supports listing stability .

What Went Well and What Went Wrong

What Went Well

Management sharpened strategic focus around LineaRx, exited non-core MDx Testing Services, and reduced headcount by ~27% to lower OpEx; monthly net cash burn fell ~19% sequentially to $0.934M, with further reductions targeted in Q4 FY2025 .
Customer traction: multi-gram follow-on LineaDNA order “over $600 thousand” from a global IVD manufacturer; added a U.S.-based mRNA CDMO for LineaDNA IVT templates and shipped multiple sequences to a U.S.-based vaccine delivery developer .
Product development/quality: launched LineaRx IVT Discovery Kit; initiated ISO 13485 certification with expectation for Q1 FY2026; launched industry marketing for LineaRNAP highlighting higher mRNA yields and reduced dsRNA vs wild-type T7 RNAP .

Management quote: “With operations now right-sized, coupled with active marketing under the LineaRx brand... we look forward to delivering value to shareholders.” — Judy Murrah, Chairperson, President, and CEO .

What Went Wrong

Material revenue shortfall vs consensus ($0.304M vs $1.276M) and severe gross margin compression to ~$5k gross profit; operating loss widened to $3.7M as fixed costs struggled to be absorbed by lower volume .
Segment wind-down weighed on service revenue (textile isotopic testing decline) and overall volumes; Therapeutic DNA product revenue timing contributed to the sequential weakness .
Continued GAAP net loss of $3.98M and negative Adjusted EBITDA (-$3.93M) with limited visibility on near-term revenue scale-up despite pipeline commentary .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenues ($USD)	$1,196,617	$983,374	$304,393
Gross Profit ($USD)	$684,107	$370,847	$5,130
Gross Profit Margin %	57.17%*	—	1.69%*
Operating Loss ($USD)	$(2,964,001)	$(3,461,795)	$(3,694,060)
Net (Loss) Income ($USD)	$(2,668,713)	$(3,336,120)	$(3,984,109)
Diluted EPS – Continuing Ops ($USD)	—	—	$(33.41)
Adjusted EBITDA ($USD)	$(2,888,877)	$(3,322,004)	$(3,927,551)
Cash and Cash Equivalents ($USD)	$9,294,365	$6,823,260	$4,727,677

Values with * retrieved from S&P Global.

Estimates vs Actual (Q3 2025):

Revenue: Consensus $1.276M*, Actual $0.304M — bold miss .
Primary EPS: Consensus -$37.50*, Actual -$33.41 — modest beat on EPS vs very low base .

Metric	Q3 2025 Consensus	Q3 2025 Actual	Surprise
Revenue ($USD)	$1,276,000*	$304,393	-$971,607 (−76%)
Primary EPS ($USD)	$(37.50)*	$(33.41)	+$4.09

Segment Breakdown (Q3 2025):

Segment	Product Revenues ($USD)	Service Revenues ($USD)	Total Revenues ($USD)	Gross Profit ($USD)	Segment OpEx ($USD)	Segment Loss ($USD)
Therapeutic DNA Production	$160,999	$52,070	$213,069	$41,528	$1,779,636	$(1,738,108)
DNA Tagging & Security	$34,263	$57,061	$91,324	$(36,398)	$76,861	$(113,259)
Consolidated	$195,262	$109,131	$304,393	$5,130	$1,856,497	$(1,851,367)

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Monthly net cash burn from operations ($USD)	~$1,200,000	~$1,150,000	$934,000
Cash & cash equivalents ($USD)	$9,294,365	$6,823,260	$4,727,677

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Monthly net cash burn	Q4 FY2025	Expected quarterly cash burn to begin declining starting Q3 FY2025	Expects a further reduction in the quarter ending Sep 30, 2025	Lowered burn trajectory
ISO 13485 certification	Q1 FY2026	—	Expects certification in Q1 FY2026	New timeline
Business mix	FY2025	Wind down DNA Tagging; maintain ADCL steady-state	Ceased ADCL operations effective June 27, 2025; focus exclusively on LineaRx	Strategic refocus
Conference call cadence	Q3 FY2025	Held calls (Q1, planned intra-quarter updates)	No Q3 earnings call	Maintained silence this quarter

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 FY2025)	Previous Mentions (Q2 FY2025)	Current Period (Q3 FY2025)	Trend
Strategic focus on LineaRx	Restructuring to prioritize LineaRx; GMP Site 1 certified; largest PCR-based GMP capacity in NA claimed	Reiterated cost reductions and focus; expected burn decline	Consolidated behind LineaRx; exited ADCL; 27% workforce reduction	Intensifying focus
mRNA/IVT platform (LineaIVT, LineaRNAP)	Emphasized IVT template opportunity; LineaRNAP advantage; IVT orders in pipeline	Marketing/evaluation kits planned; enzyme/buffer enhancements	Launched IVT Discovery Kit; industry marketing for LineaRNAP	Productization
CRISPR donor DNA	Announced “Linea donor DNA” for HDR applications	Development progressing	Shipped sequences; quotes to large biotech for gene editing	Early commercialization
Quality/regulatory	GMP Site 1 operational; ISO culture/process foundation	—	ISO 13485 certification initiated; target Q1 FY2026	Building quality moat
Financial discipline/going concern	Highlighted going concern disclosure; cost discipline	Burn decline expected from Q3 FY2025	Burn reduced sequentially; further reductions targeted	Improving but fragile
Nasdaq listing	—	—	Regained minimum bid compliance (July 2, 2025)	Stabilized listing

Management Commentary

Judy Murrah (Q3 press release): “Our operational activities center on repositioning Applied DNA as a single business… aligned with our proven core competencies… we look forward to delivering value to shareholders.”
Product/Platform update (Q3 press release): “Launched the LineaRx IVT Discovery Kit… launched industry marketing for LineaRNAP… initiated ISO 13485 certification… expect to be ISO 13485-certified in the first quarter of fiscal 2026.”
Financial discipline (Q3 press release): “Monthly net cash burn… declined approximately 19% sequentially and 25% y/y… We expect a further reduction in the quarter ending September 30, 2025.”

Q&A Highlights

Market opportunity for donor DNA in CRISPR: Management sees large near-term opportunities in CAR-T workflows and gene-editing as programs move from viral vectors to gene editing; donor DNA leverages existing PCR workflows .
Revenue composition: Q1 revenue increases driven by shipments of DNA taggant to a long-standing cotton customer and higher isotopic testing volumes; some Tagging contracts retained post-restructuring .
Clinical validation: First-in-human CAR-T trial in Prague using LineaDNA validated regulatory pathway and speed advantage vs plasmid; revenue impact limited but strategically important .

Estimates Context

Q3 FY2025 vs S&P Global consensus: Revenue $0.304M vs $1.276M estimate; Primary EPS -$33.41 vs -$37.50 estimate. The revenue miss is substantial and suggests consensus will need to reset lower to reflect the wind-down of Tagging/MDx and timing-related softness in Therapeutic DNA volumes .
Forward implications: Given margin compression and limited visibility on near-term volume scaling, consensus on future revenues and margins may be revised down; however, burn-rate improvements and productization milestones (LineaRNAP, IVT kits, ISO 13485 timeline) could temper estimate reductions in out-quarters. Values retrieved from S&P Global.*

Key Takeaways for Investors

The quarter materially missed revenue expectations, driven by the strategic exit of legacy businesses and timing of Therapeutic DNA orders; margins compressed sharply, highlighting operating leverage sensitivity at low volumes .
Strategic clarity improved: Applied DNA is now a pure-play synthetic DNA/mRNA manufacturing story under LineaRx; operational complexity reduced after ADCL shutdown and Tagging wind-down .
Cash discipline is working: monthly cash burn trending down ($1.2M → $1.15M → $0.934M), with further reductions targeted in Q4; cash balance declined to $4.73M, sustaining urgency around commercial scale-up and capital planning .
Near-term trading setup: lack of Q3 call and revenue miss are negatives; watch for Q4 burn improvements, ISO 13485 progress, and any announced GMP IVT template wins as potential positive catalysts .
Medium-term thesis: commercialization of LineaRNAP/LineaIVT with demonstrated dsRNA reduction and faster workflows vs plasmid DNA can be differentiated; ISO certification and repeat IVD orders (>$600k) begin to validate customer demand .
Risk checks: continued net losses, going concern disclosures (earlier periods), and execution risk in converting pipeline to recurring GMP orders; listing stability improved with Nasdaq compliance regained .
Action items: monitor segment revenue mix for Therapeutic DNA recovery, margin trajectory as volumes return, and contract announcements with mRNA CDMOs/therapeutics developers; expect consensus to lower near-term revenue/margin forecasts post Q3 miss.

Additional Notes and Press Releases (Q3 FY2025 Window)

Strategic restructuring press release (June 30, 2025): 27% workforce reduction; focus exclusively on LineaRx; projected 23% payroll cost reduction; ADCL ceased operations .
Nasdaq compliance (July 2, 2025): regained minimum bid requirement; hearing canceled; securities remain listed on Nasdaq .
Q3 press release explicitly states no earnings call; IR available via email .

APPLIED DNA SCIENCES INC (APDN)·Q3 2025 Earnings Summary