ChromaDex Corp. (CDXC)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 delivered record net sales of $25.6M (+31% YoY), 63.5% gross margin, and the company’s highest net income ($1.9M) and Adjusted EBITDA ($2.9M) to date, with cash rising to $32.4M and no debt .
• Mix shift toward Niagen ingredients drove the upside: food‑grade Niagen sales surged to $5.8M (+304% YoY) and pharmaceutical‑grade Niagen (Niagen+) debuted at $0.9M; Tru Niagen consumer sales were $18.1M (+4% YoY) .
• Full‑year 2024 net sales growth guidance was tightened to approximately 15% (from a prior 10%–15%), with gross margin slightly improving YoY and S&M stable as a percentage of net sales; G&A expected down ~$1.5M YoY .
• Earnings call highlighted early momentum of Niagen+ in clinics (100 now; targeting ~300 “in the next few weeks”), premium pricing ($500–$700 per IV session), and supply constraints as the current governor on clinic expansion .

What Went Well and What Went Wrong

What Went Well

• Record quarter on both top and bottom line, driven by e‑commerce strength and Niagen ingredients: “we achieved record results… $25.6 million in revenue, a 31% increase year‑over‑year and net income of $1.9 million” .
• Successful Niagen+ launch and rapid clinic rollout: “It’s in 100 clinics today, and we expect it to be in about 300 within the next few weeks” with favorable patient experience vs NAD IV (shorter times, better tolerability) .
• Expense efficiency and margin gains: S&M improved to 27.5% of sales (−350 bps YoY) and gross margin expanded 210 bps to 63.5%, supported by mix and deferred revenue recognition .

What Went Wrong

• Watsons/Other B2B softness amid Hong Kong retail weakness led to YoY decline; Tru Niagen growth was modest (+4% YoY) despite stronger e‑commerce .
• Supply constraints for pharmaceutical‑grade Niagen are the main restraint on accelerating clinic count, requiring time for testing/sterilization processes and limiting near‑term scale .
• Working capital headwinds reduced operating cash flow YTD vs prior year: higher trade receivables and lower payables/accrued expenses, partially offset by $6.4M improvement in net income .

Financial Results

Quarterly Financials (chronological: Q1 → Q3 2024)

Q3 Year-over-Year Comparison

Segment/Channel Breakdown (Q3 2024)

KPIs and Mix

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “This quarter also marks our sixth consecutive quarter of positive adjusted EBITDA, reaching $2.9 million, and we generated total positive cash flow of $5.1 million. We ended the quarter with $32.4 million in cash and no debt.” — CEO Rob Fried .
• “On Amazon, we saw sustained growth following Prime Day in July… TRU NIAGEN’s position as the top NAD boosting supplement.” — CEO Rob Fried .
• “We have now shipped to over 100 clinics to date. In the coming weeks, we expect… over 300 clinics.” — CEO Rob Fried .
• “Our gross margins improved to 63.5%, up 210 basis points… driven by changes in our product mix… and the recognition of deferred revenue.” — CFO Ozan Pamir .
• “The only real restraint we have at this point is supply of material [pharma‑grade Niagen].” — CEO Rob Fried .

Q&A Highlights

• Clinic rollout and dosing: 100 clinics now, ~300 expected in weeks; typical IV dose 500 mg (15–20 minutes infusion), injections commonly 100 mg; injection SKU growing faster .
• Pricing/economics: Clinics generally charge $500–$700 per Niagen IV session; revenue recorded under pharmaceutical‑grade ingredient sales .
• Addressable market and constraint: ~3,000 U.S. clinics are addressable for IV/wellness offerings; supply of pharmaceutical‑grade Niagen is the limiting factor .
• Gross margin trajectory: Expect margins “around the range it’s in right now”; Niagen+ mix is accretive, physical retail exerts downward pressure .
• Working capital and cash flows: YTD operating cash flow change driven by AR increase, reduced payables/accrued, lower credit loss provisions, offset by $6.4M net income improvement .

Estimates Context

Wall Street consensus (S&P Global Capital IQ) for Q3 2024 revenue and EPS was unavailable due to missing CIQ mapping for CDXC, so we could not retrieve estimate comparisons. Values retrieved from S&P Global were unavailable for this ticker at the time of request.*

Other Relevant Press Releases (Q3 timing)

• ChromaDex appointed Ozan Pamir as CFO (effective Oct 21, 2024), reinforcing financial discipline and pharma-sector expansion focus .

Key Takeaways for Investors

• Niagen+ (pharma-grade) is an emerging growth driver with premium pricing and early clinic traction; supply is the near‑term bottleneck and key to upside pace .
• Mix shift toward ingredients and e‑commerce is lifting gross margins and profitability; watch Watsons/HK B2B headwinds that can dampen Tru Niagen growth .
• FY24 guide tightened to ~15% growth with disciplined OpEx; Q3 operating leverage demonstrated with positive EPS and record Adjusted EBITDA .
• Regulatory path (AT orphan/rare pediatric) and pre‑IND interactions represent optionality; timelines into 2025 remain contingent on FDA feedback .
• Working capital swings (AR) moderated operating cash flow vs prior year; balance sheet is strong ($32.4M cash, no debt) supporting continued investment .
• Near‑term trading implication: momentum narrative (Niagen+ clinics, margins, profitability) vs supply constraint and B2B softness; catalysts include clinic count updates and regulatory milestones .
• Medium‑term thesis: scaling Niagen+ and sustaining e‑commerce strength could structurally raise margins; monitor partner dynamics (possible cannibalization) and pharma‑grade manufacturing capacity .