Cyanotech (CYAN) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 FY2026 increased 19.3% year-over-year to $6.98 million, driven by higher bulk and online sales, especially in e-commerce channels.

• Gross margin improved to 34.3% from 25.3% a year ago, reflecting higher production volumes, cost efficiencies, and price increases.

• Operating income reached $190,000, reversing an operating loss of $975,000 in the prior year.

• Net income was $1,000, or $0.00 per diluted share, compared to a net loss of $1.15 million, or $0.16 per share, last year.

• Trailing twelve-month net sales were $25,269,000, with a net loss of $1,776,000, improved from $5,452,000 year-over-year.

Financial highlights

• Q2 FY2026 net sales: $6,976,000, up from $5,845,000 in Q2 FY2025.

• Q2 FY2026 gross profit: $2,393,000 (34.3% margin), up from $1,479,000 (25.3% margin) year-over-year.

• Six-month net sales rose 9.0% year-over-year to $12.8 million, with bulk sales up 63.6% and packaged sales down 2.3%.

• Operating expenses for the six months decreased by 4.9% to $4.7 million, mainly due to lower G&A and R&D costs.

• Cash at September 30, 2025: $649,000; working capital at $39,000, both down from the prior year.

Outlook and guidance

• Management remains focused on operational excellence, cost control, and building a resilient business for long-term success.

• Focus on stabilizing production, expanding e-commerce, and leveraging core competencies.

• Management expects gross margin to be impacted by production volumes, input costs, and market competition.

• Continued emphasis on higher-margin consumer products and process improvements.

• Confident in positive momentum and improving profitability trends despite market challenges.