BioHarvest Sciences Inc. (CSE:BHSC, OTC:CNVCF) this week released its latest quarterly financial results, a period marked by significant revenue and subscriber growth for its red grape cell nutraceutical product VINIA.
CEO Ilan Sobel joined Proactive to discuss the results.
Proactive: You're obviously in good spirits because you've released your financial numbers, which show very good numbers, in fact. And, you've reached $6 million in revenue, which is a huge milestone for the quarter.
Ilan Sobel: Indeed, we delivered north of the guidance. The guidance was $5.7 to $6 million. And we delivered above that $6 million mark of revenue. And, when you think about that in the context of one molecule, just our magical red grape cell VINIA, that's a lot of customers every day that are enjoying the unique functional benefits of a really powerful molecule that changes people's lives from a health and wellness perspective.
It’s been a lot of hard work by the team. And, you know, in doing that, we're seeing our subscription base increase dramatically. We increased our subscribers versus the same quarter last year by 135%, and we did that with only a 43% increase in marketing and sales. So you're getting significant efficiencies as it relates to improving the financial performance of the business.
You were also able to really improve margins as well, proving to 52%, up from 40%. That's significant, especially when you're looking at the translation into revenue.
Yes. Look, it's a real focus from the manufacturing organization, as well as what we call the downstream part of the business, which is how we actually get our products direct to our consumers as it relates to transportation services. We're looking at every opportunity to bring margins back over the line to our side of the fence. And, the plan over the next few quarters is to start getting that closer to north of 60% and ideally closer to 65%, which is where we want to be, where ultimately, the business starts becoming a viable, strong financial performance business.
Let's talk about coffee as well, because you also highlighted not only in this news release, but also in one previously about the success you're seeing within the coffee business that has really only been going for a short time and has had that much of a run to get to this point.
Well, our VINIA Superfood Coffee is now seven months old. We have the regular and the decaf. And, we're really proud to announce this week that we hit the milestone of selling $1 million of our VINIA superfood coffee direct to consumers. And it's important to understand this is direct to consumers being consumed every day in people’s Keurig machines. So it's a significant achievement for us. We've done that also very efficiently. This is really an add-on as it relates to our core internet eCommerce business, as well as our Amazon business. We've done that with really limited resources.
It just demonstrates to me and gives me confidence that when we double down from an investment perspective on our hot beverage strategy, we'll start to do that more from a portfolio perspective, because we're going to be bringing out, by the end of the year, a VINIA superfood coffee in a Nespresso compatible format. It will be the first superfood to be produced in that type of platform. And then we're also going to be launching a line of VINIA superfood teas that we'll be talking more about shortly. So, with the combination of that hot beverage strategy, we now have a growth engine for the company where we have scale, and we can actually start to drive marketing efficiency around our hot beverage strategy. And, we’re going to see those numbers significantly increase as we start to double down and put more resources behind it.
Obviously, the end of the summer, heading into the fall now, it's going to be a busy fall for sure. You talked about the hot beverage strategy. What else are you working on for the fall that we should be aware of?
Well, we've got a lot of marketing activity that we're going to be rolling out. We're expanding aggressively in the number of TV networks where we're starting to air our TV commercials, as well as integrated programming. We've seen fantastic results on channels like Newsmax and Fox, which have broad scale amongst our core consumers. In addition, we've got those two big product launches, which are really going to complete the play by the end of the year. We're looking forward to seeing continued momentum. We've given guidance for the third quarter of around $6.5 million. We're sitting now halfway, more than halfway through the third quarter. And that's definitely a reachable milestone.
And then obviously, we'll continue to up the ante in the fourth quarter, as we continue to drive increased revenue and leverage the scaling to improve margins for the business as we move the company down its path to profitability at an EBITDA level. So, very focused strategy. We continue to execute. And of course, our CDMO services business, we're starting to see significant momentum in that business. We’ve already announced two deals in that business as we work with major giants of industry in developing molecules with our unique, proprietary technology, botanical synthesis technology. We're looking forward over the next few months to announcing what we believe will be exciting opportunities to develop unique molecules for partners as we bring companies through the pipeline.
Quotes have been lightly edited for clarity and style