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DYADIC INTERNATIONAL INC (DYAI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue of $1.1646M rose 20% sequentially and beat Wall Street consensus by ~3.7%; EPS was $(0.06), missing consensus of $(0.043) as operating costs ramped with commercialization efforts . Revenue consensus: $1.1228M; EPS consensus: $(0.04333)*.
  • Management highlighted a strategic pivot to commercial execution, first bulk sale of a Dyadic-produced protein (FGF), and enhanced genetic engineering capabilities via an ERS Genomics CRISPR/Cas9 license—key near-term catalysts for product revenue growth .
  • Liquidity strengthened: ~$10.4M cash and investments at quarter-end, aided by ~$4.9M net proceeds from the August equity offering; balance sheet supports scaling product launches into 2026 .
  • Outlook: CFO expects product revenue growth in Life Sciences and Food & Nutrition, with OpEx held roughly in line with last year; $0.5M Proliant milestone recognized in Q4 should aid near‑term results .

What Went Well and What Went Wrong

What Went Well

  • First commercial bulk sale (FGF) and active sampling for DNase‑I and Transferrin—evidence of traction in the shift from R&D to product revenue; “no longer just a story about potential… it’s a story about execution, commercial traction and growing product revenue” .
  • CRISPR/Cas9 license with ERS Genomics expands strain optimization capability, improving productivity and time-to-market; management called it “a more powerful genetic toolbox to accelerate product development” .
  • International expansion with Intralink in Japan and Korea to pursue OEM/bulk opportunities in cell culture media and molecular biology reagents—positioned to benefit from regional manufacturing and tariff dynamics .

What Went Wrong

  • Year-over-year revenue fell to $1.1646M from $1.9575M, reflecting lapping of prior-year $1.425M license/milestone revenue and lower R&D collaboration revenue; grants partly offset the decline .
  • Operating loss widened to $(1.925)M vs $(0.203)M YOY as grant revenue carries associated delivery costs and G&A increased with rebranding and business development .
  • Net loss increased to $(1.976)M ($(0.06) per share) vs $(0.203)M ($(0.01) per share) YOY; investors may question timing to margin inflection as commercialization scales .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025Q3 2025 Consensus
Revenue ($USD)$1,957,500 $393,572 $966,630 $1,164,617 $1,122,830*
Diluted EPS ($USD)$(0.01) $(0.07) $(0.06) $(0.06) $(0.04333)*
Loss from Operations ($USD)$(202,614) $(2,002,475) $(1,729,068) $(1,925,369) N/A
Operating Margin (%)−10.4% (derived from $(202,614)/$1,957,500) −508.5% (derived from $(2,002,475)/$393,572) −178.9% (derived from $(1,729,068)/$966,630) −165.3% (derived from $(1,925,369)/$1,164,617) N/A
Net Loss ($USD)$(203,460) $(2,027,579) $(1,793,774) $(1,976,012) N/A
Net Margin (%)−10.4% (derived from $(203,460)/$1,957,500) −515.0% (derived from $(2,027,579)/$393,572) −185.6% (derived from $(1,793,774)/$966,630) −169.6% (derived from $(1,976,012)/$1,164,617) N/A

Note: Values marked with * retrieved from S&P Global.

Revenue mix detail:

Revenue CategoryQ3 2024Q2 2025Q3 2025
R&D Collaboration Revenue ($USD)$532,500 $213,449 $350,046
Grant Revenue ($USD)— $503,181 $814,571
License & Milestone Revenue ($USD)$1,425,000 $250,000 —
Total Revenue ($USD)$1,957,500 $966,630 $1,164,617

Operating expense components:

MetricQ3 2024Q2 2025Q3 2025
Cost of R&D Revenue ($USD)$395,894 $148,457 $254,753
Cost of Grant Revenue ($USD)— $465,134 $769,250
R&D Expense ($USD)$460,241 $629,379 $571,872
G&A Expense ($USD)$1,297,984 $1,436,630 $1,481,356

KPIs and balance sheet:

KPIQ3 2025
Cash, cash equivalents, restricted cash, and investment‑grade securities ($USD)~$10.4M
Accounts Receivable ($USD)$916,574
Deferred R&D Obligations ($USD)$1,337,138
Convertible Notes, net ($USD)$2,954,882 (non‑related)
Convertible Notes, net ($USD) – related party$2,058,569
Weighted Avg Shares (basic & diluted)34,507,530
Equity Offering Net Proceeds ($USD)~$4.9M (Aug 1, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product Revenue (Life Sciences; Food & Nutrition)Q4 2025–2026Not previously quantified“Expect to see growth in product revenue” Raised qualitatively
Operating ExpensesQ4 2025Not previously quantified“Maintain operating expenses in line with last year” Maintained
Proliant MilestoneQ4 2025Anticipated in prior updates$0.5M to be recognized in Q4 2025 Confirmed timing
Formal Revenue/EPS/Margin RangesQ4 2025–FY 2026N/ANo numeric ranges provided N/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Commercial pivot & first product salesQ2: Rebranding to “Dyadic Applied BioSolutions”; equity raise; approaching launches for DNase‑I and albumin First bulk sale (FGF); sampling underway for DNase‑I and Transferrin Accelerating execution
CRISPR/Cas9 capabilityNot highlighted in Q1; Q2 focused on platform advantages ERS Genomics license to speed optimization, improve yields Capability enhancement
Regional expansion (Japan/Korea)Q2: Early discussion of global partners Intralink partnership; OEM/bulk strategy in Asia Go‑to‑market broadened
Tariffs/macroLimited prior discussionTariffs favor local production in Asia; technology transfer strategy Strategic positioning
Biopharma grants/validationQ1/Q2: Gates ($3M), CEPI programs; EVH participation Further milestones; H5 antigen progress; continued non‑dilutive funding Ongoing validation
Balance sheet & listing statusQ2: $5.3M equity raise ~$10.4M cash/investments; Nasdaq compliance regained in Oct Strengthened liquidity, resolved listing issues

Management Commentary

  • “At the start of the fourth quarter, we saw our first commercial bulk sale of a Dyadic produced protein… We expect momentum to build with additional product opportunities emerging in 2025 and accelerating in 2026” — Joe Hazelton, President & COO .
  • “This license [ERS Genomics CRISPR] allows us to accelerate strain optimization, improve productivity and further increase yields…” — Joe Hazelton .
  • “Our biopharmaceutical programs are accelerating and delivering meaningful advancements… These efforts are generating strong data that demonstrates C1’s ability to rapidly, efficiently and affordably manufacture high quality biologics” — Mark Emalfarb, CEO .
  • “For the rest of 2025, we expect to see growth in product revenue… while maintaining our operating expenses in line with last year” — Ping Rawson, CFO .

Q&A Highlights

  • CRISPR licensing economics: ERS deal focused on engineering fungal cell lines; costs are modest relative to productivity benefits; enhances time‑to‑result and specificity for strain development .
  • DNase‑I opportunity: ~$250M recombinant DNase‑I market today and ~$1.5B total DNase‑I market; strategy is bulk/OEM supply with step‑up to higher grades (ISO/GMP) as revenues scale .
  • Asia strategy and tariffs: Targeting Japan/Korea manufacturers, distributors, and suppliers; tariff dynamics encourage local production with tech transfer; Dyadic aims for OEM bulk agreements rather than retail distribution .
  • Cost structure scaling: Model relies on distributors/wholesalers; minimal infrastructure expansion expected over 2–3 years; G&A not expected to scale at revenue pace .

Estimates Context

Results vs S&P Global consensus:

  • Q3 2025 revenue: $1.1646M vs $1.1228M estimate; beat by ~$41.8K (~3.7%)*.
  • Q3 2025 EPS: $(0.06) vs $(0.04333) estimate; miss by ~$(0.017)*.
  • FY 2025 revenue estimate: $3.856M; FY 2026 revenue estimate: $6.770M; FY EPS estimates $(0.225) and $(0.11) respectively*. Numbers of estimates: Q3 revenue/EPS (3), FY 2025 (2), FY 2026 (3)*.

Note: Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential revenue growth with a consensus beat, but EPS miss as commercialization costs and grant delivery expenses weighed on margins—consistent with early product launch dynamics *.
  • Commercial traction is tangible: first bulk order (FGF), DNase‑I and Transferrin sampling; multiple near‑term OEM/bulk opportunities targeted in Life Sciences .
  • CRISPR license expands Dyadic’s genetic engineering toolkit, likely improving yields and cycle times across C1 and Dapibus platforms—supports margin improvement potential over time .
  • Stronger liquidity ($10.4M cash/investments) plus equity proceeds ($4.9M net) provide runway to scale product revenues into 2026 .
  • Revenue mix shifting from milestone/license to product/grant—investors should monitor product revenue ramp and cost of grant delivery (cost of grant revenue was $769k in Q3) for gross margin trajectory .
  • Asia OEM/bulk strategy and tariff dynamics may accelerate adoption without heavy internal infrastructure, aiding operating leverage as revenues scale .
  • Near‑term catalyst: $0.5M Proliant milestone recognition in Q4 2025; watch for initial purchase orders in DNase‑I and Transferrin by year‑end .

Additional Relevant Press Releases in Q3 2025

  • Milestone achievements: Proliant $500k productivity milestone (payment in Q4), Inzymes $250k milestone; progression in DNase‑I and Transferrin programs .
  • Nasdaq compliance regained: MVLS and $1.00 bid price deficiencies cured in September/October .