Earnings call transcript: Codexis beats Q1 2026 EPS forecast, stock rises

Codexis Inc. reported its financial results for the first quarter of 2026, surpassing analysts’ expectations with an earnings per share (EPS) of -0.1, compared to the forecasted -0.16. The company also reported revenues of $15.2 million, exceeding the anticipated $14.79 million. Following the announcement, Codexis shares rose 1.5% in after-hours trading, reflecting investor optimism.

Codexis demonstrated robust performance in Q1 2026, with revenues more than doubling from the previous year, largely due to the Merck Technology Transfer Agreement. The company’s strategic shift towards higher-margin products contributed to a notable improvement in gross margins. Additionally, Codexis managed to reduce its net loss by 58% compared to Q1 2025, reflecting effective cost management. With a current ratio of 3.82 as of the last twelve months, the company maintains strong liquidity, and according to InvestingPro analysis, liquid assets exceed short-term obligations—a crucial factor supporting management’s confidence in the 2027 cash runway.

Codexis achieved an EPS of -0.1, which was better than the forecasted -0.16, resulting in a positive surprise of 37.5%. The company also exceeded revenue expectations, reporting $15.2 million against a forecast of $14.79 million, a 2.77% surprise. This performance marks a significant improvement over previous quarters, indicating effective execution of strategic initiatives.

Following the earnings release, Codexis shares experienced a 1.5% increase in after-hours trading, reaching $2.7. This movement comes despite a slight decline in the regular trading session, where shares closed at $2.66, down 2.63%. The stock has delivered impressive returns with a 53% gain over the past six months and a 58% year-to-date return, reflecting growing investor confidence. At its current market capitalization of $235 million, InvestingPro analysis suggests the stock appears undervalued relative to its Fair Value—positioning it among opportunities on the platform’s Most Undervalued list. Investors seeking deeper insights can access one of 8+ additional ProTips and comprehensive Pro Research Reports available for CDXS and 1,400+ other US equities.

Codexis provided guidance for the upcoming quarters, projecting continued revenue growth with an expected $16.5 million in Q2 2026. The company anticipates maintaining its enhanced gross margin levels for the year. Management remains optimistic about sustaining operations through 2027, supported by current cash reserves and strategic cost management.

CEO John Nicols stated, "Our strong Q1 results reflect the successful execution of our strategic initiatives and partnerships, particularly the Merck Technology Transfer Agreement. We are committed to driving growth and improving margins through focused product development and operational efficiency."

During the earnings call, analysts inquired about the sustainability of the current gross margin levels and the potential impact of new partnerships on future revenue streams. Management emphasized their commitment to maintaining margin improvements and exploring strategic partnerships to bolster growth.

Conference Call Operator: Greetings, welcome to the Codexis Report 2026 Q1 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Georgia Erbez, Chief Financial Officer and Chief Business Officer. Please go ahead.

Georgia Erbez, Chief Financial Officer and Chief Business Officer, Codexis: Thank you, operator. With me today are Dr. Alison Moore, Codexis’ President and Chief Executive Officer, and Britton Jimenez, Senior Vice President, Sales and Marketing. During this call, management will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our guidance for 2026 revenue, anticipated milestones, including product launches, facility expansions, technical milestones, and public announcements related thereto, as well as our strategies and prospects for revenue growth and successful execution of current and future programs and partnerships. To the extent that the statements contained in this call are not descriptions of historical facts regarding Codexis, they are forward-looking statements reflecting the beliefs and expectations of management as of the statement date, May 7, 2026.

You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond Codexis’ control and that could materially affect actual results. Additional information about factors that could materially affect actual results can be found in Codexis’ filings With the Securities and Exchange Commission. Codexis expressly disclaims any intent or obligation to update these forward-looking statements except as required by law. Now I’ll turn the call over to Alison.

Dr. Alison Moore, President and Chief Executive Officer, Codexis: Thank you, Georgia, and thanks, everyone, for joining. While it’s been a short 8 weeks since our last call, we’ve accomplished a lot at Codexis. We are pleased to report another strong quarter and are busy preparing for the TIDES conference next week, where we will present important new data on our ECO Synthesis technology. Codexis generates manufacturing solutions using biocatalytic enzymes. Over the last 3 years, we have developed the ECO Synthesis manufacturing platform for the production of RNA medicine, specifically siRNA, and we are now focused on bringing this to the market. The standard approach of using solid-phase oligonucleotide synthesis for siRNA manufacturing is complex, solvent-intensive, and challenging to scale. Currently, siRNA pipelines are expanding from rare diseases to large population indications, which will create a significant manufacturing bottleneck in the next 3 years.

ECO Synthesis has the potential to alleviate production constraints by delivering greater scalability and higher product quality with the added benefit of dramatically improving environmental impact. Last year, we achieved a number of important milestones in platform performance and industry engagement, which generated tangible interest from our customers. In 2026, the potential impact of our platform is well understood, and across the industry, we are seeing increased interest in enzymatic production solutions. Our goal is to position Codexis as the leading manufacturing technology innovator. We are operationalizing our platform through scaling, improving process control, and by our platform’s unique capability of delivering superior siRNA product. A new feature of our ECO Synthesis platform is the ability to generate siRNA with specific stereochemical control. Stereoisomers exist at both ends of most siRNA molecules and are made of the same atoms but are arranged differently in three-dimensional space.

As a reminder, drug developers have little influence over stereochemistry today, as existing chemical manufacturing methods produce random mixtures that can vary in terms of therapeutic potency and purity. Our engineered enzymes used in ECO Synthesis can deliver product with specific stereoisomer configurations. These stereopure molecules confer overall improved product quality and have the potential to deliver improved potency. We continue to explore the biological impact of this control and believe it could be a tremendous asset to those customers who seek ways to improve their products. Our small molecule biocatalysis business remains an important part of Codexis and provides support for the investments we are making in ECO Synthesis. We supply uniquely designed enzymes for 13 branded commercial pharmaceutical products. This portfolio continues to grow with the recent approval of islatravir, a part of an important new combination treatment for HIV.

Codexis partnered with Merck, who carried out groundbreaking process chemistry, substituting a 16-step chemical synthesis with a biocatalytic cascade. This achieved a Green Chemistry Challenge Award in 2025. We are supplying enzymes for this commercial product and are proud to participate in this supply chain for HIV patients. We are making remarkable progress at Codexis, and momentum is increasing in 2026. We are proud of the advances we are making to further enhance the utility of the ECO Synthesis platform. We look forward to showing our customers and investors additional tangible proof of value of the technology. Now, to update you on our commercial activities and progress, let me turn it over to Britton.

Britton Jimenez, Senior Vice President, Sales and Marketing, Codexis: Thanks, Alison. Our ECO Synthesis manufacturing platform continues to mature into a thriving and successful business. Most importantly, it is a platform capable of broadly supporting product development for the most important growing modality in the genomic medicine space. The number of RNA medicines in development is growing at an estimated rate of at least 10% per year, with over 100 candidates in clinical trials and more than 400 in pre-clinical development. Current production technologies will not be able to keep up with future demand. For example, there are 4 drugs in late-stage clinical development for cardiovascular indications. A 2%-3% market penetration of one of these therapeutics into a 25 million addressable patient population will require more oligonucleotide production than the entire rare disease portfolio combined.

The impact of these powerful new therapies may not reach their full potential if they cannot be produced reliably, efficiently, and at scale. As innovators and CDMOs search for ways to expand capacity, the