• Full Year Revenue: Just over $5 million.
• Gross Profit: $2.1 million.
• Gross Margin: 41.3%.
• R&D and SG&A Expenses (Second Half 2024): $4.9 million.
• Q4 Revenue: Approximately $1.2 million, a 56% increase year-over-year.
• Zola Sales Growth (Full Year 2024): 46% increase compared to 2023.
• Zola Sales Growth (Q4 2024): 124% increase compared to Q4 2023.
• GLA Oil Sales Decline (Full Year 2024): 49% decrease.
• Cost of Revenues (2024): Approximately $3 million, a 36% increase year-over-year.
• SG&A Costs (2024): $9.6 million, including $2 million of transaction costs.
• Cash Balance (End of 2024): $4.2 million.
• Accounts Receivable (End of 2024): $1.2 million.
• Inventory Balance (End of 2024): $904,000.

• Warning! GuruFocus has detected 4 Warning Signs with RKDA.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Arcadia Biosciences Inc (NASDAQ:RKDA) successfully executed a multiyear plan to focus on profitability, exiting underperforming brands and simplifying operations.
• The company monetized a portion of its wheat intellectual property portfolio, providing non-dilutive capital and reducing operating expenses.
• Zola coconut water products experienced significant growth, with revenues increasing 46% year-over-year and distribution expanding by 86%.
• Arcadia's gross margins remained strong, with Zola achieving a gross margin of 33% in 2024, consistent with previous guidance.
• The company reduced its operating cash consumption by 30% in the second half of 2024, aligning with its strategy of profitable growth.

Negative Points

• Arcadia Biosciences Inc (NASDAQ:RKDA) reported a decline in gross margin rate from 51% in 2023 to 41% in 2024 due to changes in product sales mix.
• The company incurred $1.2 million in unanticipated transaction-related fees in the second half of 2024, impacting its financial performance.
• Sales of GLA oil declined by 60% in the second half of 2024, and the company has completely sold out of GLA inventory, with no sales expected in 2025.
• Selling, general, and administrative costs increased to $9.6 million in 2024, up from $8.2 million in 2023, partly due to transaction costs.
• Arcadia ended 2024 with a reduced cash balance of $4.2 million, down from $11.6 million at the start of the year, reflecting cash consumption challenges.

Q & A Highlights

Q: Can you elaborate on your expectations for continued distribution growth for Zola in 2025? A: We have a healthy pipeline as we enter 2025, similar to 2024. We will benefit from the full 12 months of new distribution gains made in the second half of 2024.

Q: What was the full year and fourth-quarter revenue for GLA, and is the product completely sold out? A: Full year GLA revenue was $756,000, with $55,000 in Q4. We are completely out of GLA inventory, and there will be no GLA sales in 2025.

Q: Can you update us on efforts to monetize the legacy IP from the prior business model? A: We are seeking to monetize our patent portfolio, likely through a series of transactions due to legal constraints. We are in advanced discussions and hope to announce something in the first half of the year.

Q: What are the financial highlights for Arcadia Biosciences in 2024? A: Full year revenues were just over $5 million, with a gross profit of $2.1 million and gross margins of 41.3%. Zola sales increased 46% compared to the previous year, driven by new distribution.

Q: How did Zola perform in the coconut water category in 2024? A: Zola's growth outpaced the coconut water category by more than 2:1. For the full year, the category grew 18.5%, while Zola increased 38.5%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.