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CI

CODEXIS, INC. (CDXS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue and EPS missed consensus, driven by a $2.5M customer payment that slipped into April and tough prior-year comps; total revenue was $7.5M vs ~$9.7M consensus and EPS was -$0.25 vs -$0.21 consensus. Management reiterated full-year 2025 revenue guidance of $64–$68M and affirmed strong cash runway to cash flow positivity by end of 2026 .
  • Commercial execution progressed: first revenue-generating ECO Synthesis manufacturing contract signed (siRNA), initial dsRNA ligase orders delivered to large pharma and a second innovator, and three CDMO collaborators will showcase Codexis ligases at TIDES USA .
  • Product gross margin improved YoY to 55% (from 49%) on mix shift to higher-margin products, offset by higher R&D expenses and lower R&D revenue vs the prior year’s Roche license and large orders .
  • Near-term catalysts: TIDES USA technical data showcase (scalability, reproducibility, stereocontrol), additional ECO contracts expected to drive second-half ramp, and securing a GMP scale-up partner by year-end 2025 .

What Went Well and What Went Wrong

What Went Well

  • ECO Synthesis commercialization milestones: “first revenue-generating contract for our ECO Synthesis manufacturing services” and growing ligase traction (first order to a large pharma, new order from a second innovator) .
  • Margin improvement: Product gross margin rose to 55% from 49% YoY on more profitable mix and decline of legacy products .
  • CEO confidence and execution narrative: “we’ve delivered a first quarter largely in line with our expectations… maintaining our runway to cash flow positivity by the end of 2026,” and reiterated the 2025 guidance range and current analyst estimates .

What Went Wrong

  • Revenue and EPS misses versus consensus: revenue $7.5M vs ~$9.7M consensus; EPS -$0.25 vs -$0.21 consensus—impacted by a $2.5M one-time Pharma Biocatalysis payment slipping from March (Q1) to April (Q2) and lumpy ordering patterns .
  • Tough prior-year comparison: Q1 2024 had $6.0M one-time Roche license recognition plus two sizable customer orders, inflating the YoY comp .
  • Operating losses widened: net loss -$20.7M vs -$11.5M in Q1 2024; R&D spend rose on salaries and lab supplies despite SG&A down modestly .

Financial Results

Headline P&L vs Prior Periods and Estimates

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$17.073 $12.833 $21.460 $7.543
EPS (Basic & Diluted, $USD)-$0.16 -$0.29 -$0.13 -$0.25
Product Gross Margin (%)49% 61% 63% 55%
Estimates Comparison (Consensus)Q1 2025 EstimateQ1 2025 Actual
Revenue ($USD)$9.6626M*$7.543M
EPS ($USD)-$0.2075*-$0.25

Values retrieved from S&P Global.*

Significant surprises: Revenue miss and EPS miss vs consensus due to timing slip of $2.5M payment and lumpy order patterns; management reiterated full-year guidance .

Segment / Revenue Mix

Metric ($USD Millions)Q1 2024Q3 2024Q4 2024Q1 2025
Product Revenue$9.551 $11.158 $9.818 $6.059
R&D Revenue$7.522 $1.675 $11.642 $1.484
Total Revenue$17.073 $12.833 $21.460 $7.543

Drivers: Q1 2025 R&D revenue down YoY absent the $6.0M Roche license and sizable orders in Q1 2024; product revenue reflects mix shift improving gross margin .

Operating Expenses and Cash KPIs

MetricQ1 2024Q3 2024Q4 2024Q1 2025
R&D Expense ($USD Millions)$11.246 $11.505 $12.099 $12.942
SG&A Expense ($USD Millions)$12.860 $13.568 $13.049 $12.355
Net Loss ($USD Millions)-$11.505 -$20.640 -$10.376 -$20.688
Cash, Cash Equivalents & ST Investments ($USD Millions)N/A$90.3 (as of 9/30/24) $73.5 (as of 12/31/24) $59.8 (as of 3/31/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenuesFY 2025$64–$68M $64–$68M Maintained
Cash Runway to Positive Cash FlowThrough end of 2026Sufficient to fund planned operations to end of 2026 Sufficient to fund planned operations to end of 2026; positive cash flow expected by end of 2026 Maintained / Clarified timeline

No explicit guidance provided for margins, OpEx, OI&E, tax rate, or dividends in Q1 materials .

Earnings Call Themes & Trends

TopicQ3 2024 (Prev Mentions)Q4 2024 (Prev Mentions)Q1 2025 (Current)Trend
ECO Synthesis commercializationInitiated technical collaborations; TIDES EU data; ECO Innovation Lab build-out Ready to sign revenue-generating contracts; ECO Lab commissioned; FY25 guidance introduced First revenue-generating ECO contract signed; TIDES USA to showcase scalability/reproducibility/stereocontrol Accelerating execution and validation
dsRNA ligase tractionCustomer testing, superior performance; plan to expand orders Follow-on ligase orders expected; in-house purification investment First order to large pharma; second innovator order; CDMO collaborator presentations Building commercial momentum
Supply chain/onshoring & BIOSECUREDiscussed raw material NQP/NTP enzymatic routes; onshoring benefits Emphasis on securing raw materials; path to GMP via partner then own facility Macro tailwinds for onshoring; ECO enables rapid, lower CapEx onshoring Tailwinds strengthening
ML/AI toolingNot prominentCommercial/operational focus; groundwork laid Launched ML tool for ligase/fragment design; reduces dev time/cost, performs well in partner hands New capability deployed and validated
GMP scale-up partnerPlanning and selection process outlined Target to secure partner in 2025; accelerate GMP path Expect to sign by end of 2025 Milestone approaching
Financial trajectory/cash flowPath to profitability by end-2026 with cash reserves extended to 2027 via ATM FY25 revenue guide $64–$68M; reiterate cash flow positivity by end-2026 Guidance reiterated; comfortable with Q2 consensus Consistent, reiterative messaging

Management Commentary

  • CEO positioning and confidence: “We’ve delivered a first quarter largely in line with our expectations… maintaining our runway to cash flow positivity by the end of 2026… confident in reiterating our 2025 guidance and the current range of published analyst estimates” .
  • Commercial progress: “first revenue-generating contract for our ECO Synthesis manufacturing services… ligase business is gaining traction… delivery of our first order to a large pharma customer, a new order from a second important drug innovator” .
  • Margin narrative: “Product gross margin was 55%… due to a shift in sales toward more profitable products, and declines in less profitable, legacy products” .
  • Strategic tech differentiation: “ECO Synthesis… enables 5x bigger batches, is 50% faster, and costs 70% less to stand up than phosphoramidite chemistry… ability to control chirality at scale” .
  • CFO on near-term cadence: Q1 dynamic impacted by $2.5M order timing; comfortable with Q2 consensus; reiteration of 2025 guidance and strong cash position ($59.8M) .

Q&A Highlights

  • Adoption roadmap: CDMOs are near-term first movers; small innovators cash-constrained; large pharma focused on 2–3 year demand—Codexis must “show me” reproducibility, shorter production time, rapid/low-cost GMP stand-up .
  • Second-half ramp drivers: Growth expected from ECO contracts signed in 1H25; ligase order expansion to drive revenue weighting to back half .
  • Cash flow and GMP facility: Cash flow positivity by end-2026 excludes own GMP; facility spend weighted to 2026–2027, staged financing; GMP partner would buy time and accelerate path .
  • Ligase orders trajectory: Expect repeat customers as assets move into Phase III; scaling volumes from grams to hundreds of grams annually as assets mature .
  • ML/AI deployment: Proprietary ML tool for ligase/fragment pairing reduces development timelines and costs; validated at collaborators; broader data science applications planned in manufacturing optimization .

Estimates Context

MetricQ1 2025 ConsensusQ1 2025 ActualSurprise
Revenue ($USD)$9.6626M*$7.543M Miss
EPS ($USD)-$0.2075*-$0.25 Miss
# of Estimates (Revenue / EPS)7 / 4*——

Values retrieved from S&P Global.*

Implications: Expect analysts to modestly shift near-term quarterly phasing (Q2 up, Q1 down) with full-year held, consistent with management reiteration; timing slip ($2.5M) plus prior-year one-offs (Roche $6.0M) explain variance .

Key Takeaways for Investors

  • Q1 miss is timing- and comp-driven; the core narrative is intact: guidance reiterated ($64–$68M) and management remains “comfortable” with Q2 consensus, pointing to a back-half ramp from ECO and ligase contracts .
  • Execution milestones are stacking: first ECO contract signed, ligase orders delivered, and third-party CDMOs presenting Codexis performance—strong external validation ahead of GMP partner signing by year-end 2025 .
  • Mix-led margin improvement is visible; continued pruning of legacy products and in-house purification investments should support margins as volume scales .
  • Technical moat expanding: ML-guided ligase/fragment design, stereocontrol capability, and fully/partially enzymatic routes position ECO to solve real-world siRNA manufacturing constraints (scale, speed, costs, quality) .
  • Strategic onshoring tailwinds (policy and supply chain) favor ECO’s lower CapEx, faster timelines and potential enzymatic raw material supply (NQPs/NTPs), broadening addressable markets and defensibility .
  • Near-term trading: watch TIDES USA disclosures and any ECO contract/GMP partner announcements; positive updates can re-rate execution confidence and back-half revenue visibility .
  • Medium-term thesis: If ECO transitions from development projects to multi-asset supply agreements in 2026+, revenue durability and margin structure could materially improve; CDMO-first adoption strategy offers network effects and deal-flow .