Codexis (CDXS 6.99%), a biotechnology company specializing in enzyme engineering for pharmaceutical manufacturing, released its second quarter 2025 results on August 13, 2025. The headline news was an increase in revenue (GAAP) to $15.3 million, above analyst expectations of $14.09 million (GAAP). The net loss per share (GAAP) improved to ($0.16), also better than the estimated ($0.19) GAAP EPS. Management highlighted strong demand in its growing RNA therapeutics manufacturing segment, alongside expanded partnerships with key players in the industry. Overall, the period showed improved gross margins and commercial progress, although losses persisted and operational costs remained high.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.16) | ($0.19) | ($0.32) | 50.0% |
| Revenue (GAAP) | $15.3 million | $14.09 million | $8.0 million | 91.3% |
| Product Gross Margin | 72% | 45% | 27 pp | |
| Research & Development Expense | $13.8 million | $11.4 million | 21.1% | |
| Selling, General & Administrative Expense | $12.3 million | $15.7 million | (21.7%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Areas of Focus
Codexis develops and provides enzyme-based solutions for pharmaceutical manufacturing, focusing on platforms that make drug development more efficient and cost-effective. Its core business leverages proprietary enzyme engineering and optimization, which enables clients to synthesize pharmaceuticals and novel therapeutic products more sustainably and at larger scales.
Recently, Codexis has aimed to expand its technology into RNA interference (RNAi) therapeutics manufacturing. This expansion is anchored by the ECO Synthesis manufacturing platform, designed to deliver enzymatically generated building blocks for next-generation RNA medicines. Success for Codexis hinges on commercial uptake of its platforms, building partnerships with contract manufacturing organizations, and maintaining operational efficiency as its new business lines begin to scale.
Quarter Highlights: Financial and Operational Developments
The revenue figure (GAAP) outpaced consensus by $1.2 million, driven by variability in customer manufacturing schedules and clinical trial timing. Product revenue (GAAP) rose to $7.4 million from $6.1 million in Q1 2025, and Research and development revenue saw a significant boost, increasing to $7.9 million from $1.7 million in Q2 2024. The company noted higher revenue recognized from legacy agreements, showing ongoing relevance of its established enzyme portfolio in the pharma sector.
Product gross margin improved by 27 percentage points year-over-year, reaching 72%. This margin expansion resulted largely from a shift in sales toward higher-profit, newer products and lower volume from older offerings. Improved profitability from this mix shift is a positive indicator, as sales moved toward more profitable products and away from less profitable, legacy offerings.
Research and development expense was $13.8 million, compared to $11.4 million in Q2 2024, due in part to higher staffing and internal role changes supporting the ramp of the ECO Synthesis platform and other new initiatives. Conversely, Selling, general, and administrative expense was $12.3 million, compared to $15.7 million in Q2 2024, reflecting lower stock-based compensation and reduced use of outside services.
The company’s net loss (GAAP) narrowed from the prior-year period, with loss per share (GAAP) improving from ($0.32) to ($0.16). Despite this, Codexis continues to operate at a loss, underscoring its ongoing investment phase as it works to build out commercial operations and infrastructure. The company raised $27.3 million through a capital program and loan, bolstering its cash position and extending its operational runway. At quarter end, it reported $66.3 million in cash, cash equivalents, and short-term investments.
This period also saw operational milestones in the ECO Synthesis product family, which includes specialized enzymes enabling scalable siRNA (small interfering RNA) manufacturing. Highlights included external validation at a major pharmaceutical event, with three contract manufacturing partners (Bachem, Nitto Avecia, and ST Pharm) demonstrated successful transfer and use of Codexis’s ligation enzymes at their sites. These technical achievements signal growing acceptance and scalability of the ECO Synthesis approach among key industry players.
CDXS does not currently pay a dividend.
Looking Forward: Guidance and Priorities
Management did not provide specific new forward financial guidance in this release. Leadership reiterated a strategic target to achieve cash flow positivity by the end of 2026, as stated in management's 2025 financial guidance, underpinned by current cash resources and an anticipated ramp in new business contracts. They also confirmed plans to move forward with pilot-scale production of GLP-grade siRNA material and are targeting a partnership for Good Manufacturing Practice (GMP) scale-up by the end of 2025. The revenue ramp in the second half of 2025 is expected to be driven by new ECO Synthesis agreements and expanding customer adoption.
For the coming quarters, investors should watch for further details on large-scale manufacturing partnerships, the pace of external adoption for the ECO Synthesis platform. The company also flagged the timing of contracts and customer production as a cause of revenue variability, which could continue to affect results in future periods. No dividend is currently offered by Codexis.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
