My take on SYZM earnings!

Financial Results

Total revenue for the first quarter ended March 31, 2015 was $12.6 million compared with $12.4 million in the first quarter of 2014, while product revenue of $8.8 million was up 20% versus the comparable quarter. GAAP net loss was $34.7 million for the first quarter of 2015, unchanged from the first quarter of the prior year. On a non-GAAP basis, the net loss was $29.5 million for the first quarter of 2015, compared with net loss of $30.5 million in the prior year quarter.

This is SO incredibly HORRIBLE that it’s hard to fathom. They lost $29.5 million and they had total revenue of $12.6 million. That means they spent $42.1 million! More than three times their total revenue.

But it’s worse than that. Their product revenue was only $8.8 million. The rest was research grants and things. So they spent 4.8 times their total product revenue.

But wait, it’s worse even than that! Their cost of revenue was $4.7 million, or about 53%, giving them a gross margin of 47%. That gives them about $4.1 million in product revenue after the cost of that revenue. So they spent over ten times what they brought in in gross margin!!!

So, if they keep that same gross margin and triple their product revenue (I’m not talking 30% increases here, I’m saying let’s think of them tripling revenue!), they will add $8.2 to their gross margin and only lose $21.3 million.

If they quintuple their product revenue (it was up 20% this quarter, by comparison), they will add $16.4 million to their gross margins, and ONLY lose $13.1 million.

And of course, that’s without any increases in operating expenses to support quintupling of sales. (Who are we kidding?) Of course SG&A and R&D will go up. Maybe only by 20%, much less than 400% growth in product revenue, but still that would add $6.6 million to total expenses and make their loss $19.7 million, with a quintupling of product revenue.

Do you see them getting to breakeven in your lifetime? Maybe you are a lot younger than I am. And that’s just breakeven. How about making a profit?

Just wondering…

Saul

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Solazyme Inc. has you so upset you got the ticker symbol backwards! It’s “SZYM” :wink:

This is one stock I managed to avoid several years back when I was interested in “green energy” stocks.

Denny Schlesinger

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