This article first appeared on GuruFocus .
-
Revenue Growth:17% year-over-year growth for Q3 fiscal 2026.
-
Antigen Sales:Up 20% year-over-year in the quarter.
-
CAP Sales:Up 13% year-over-year in the quarter.
-
Gross Margin:Improved to 54%, up from 41% in the prior year Q3.
-
Net Loss:Controlled net loss reported, reflecting strict cost controls.
-
Operating Expenses:Down from the prior year.
-
Cash Position:CAD7.2 million in cash.
-
Share Buyback (Quarter):Bought back just under 800,000 shares at a cost of CAD209,000.
-
Share Buyback (Year-to-Date):Bought back 2.3 million shares at a cost of approximately CAD571,000.
Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Microbix Biosystems Inc ( MBXBF ) reported solid year-over-year revenue growth of 17% in Q3 fiscal 2026, with antigen sales up 20% and CAPS sales up 13%.
-
Gross margins improved significantly to 54% in Q3, up from 41% in the prior year, driven by better product mix and manufacturing efficiencies.
-
The company is making strong progress on its Kinlytic therapeutic program, with major breakthroughs in drug substance process development that have increased yields and will improve margins.
-
Microbix Biosystems Inc ( MBXBF ) is seeing growing B2C sales to end-user clinical labs, which increased 35% quarter-over-quarter and are becoming a more significant, recurring revenue stream.
-
The company maintains a strong cash position of CAD7.2 million and is actively buying back shares, repurchasing 2.3 million shares year-to-date.
Negative Points
-
Microbix Biosystems Inc ( MBXBF ) continues to report net losses, with a controlled net loss in Q3, indicating the company has not yet reached its break-even point.
-
The company's revenue recovery is still below its goal of at least 20% year-over-year growth, and it remains dependent on a few large clients, which poses concentration risk.
-
China sales, which had previously been a significant revenue source, have not fully recovered and are expected to remain below historical highs, with a return to only CAD2-3 million per year projected.
-
The timeline for formalizing agreements with major international diagnostics companies is uncertain and largely controlled by clients, potentially delaying revenue growth.
-
Government procurement for the VTM product line remains a frustration, with 95% of sales coming from outside Canada, limiting domestic market opportunities.
Q & A Highlights
Q: Why have your gross margins improved relative to fiscal Q1 despite similar revenues? Do you expect similar margins going forward? A: Jim Currie (CFO) explained that the improvement is largely due to product mix, as different antigens carry different margin profiles. Additionally, the absorption of fixed manufacturing costs improved due to operational efficiencies and disciplined cost controls. Cameron Groome (CEO) added that as sales return to break-even levels, these efficiencies will be reflected in better gross and net margins.
Q: Have you reduced your breakeven point from CAD5.5 million a quarter, or is that an initiative that you're working on? A: Cameron Groome (CEO) confirmed that the company has allowed some staff attrition without replacement, reducing headcount from peak levels without degrading capabilities. However, he emphasized that Microbix is focused on "growing its way into prosperity" rather than cutting its way there, with new projects starting at six-figure levels and potentially scaling to seven or eight figures over a 2-3 year development cycle.
Q: Is there a point in the development commercialization process at which you will be able to start disclosing large CAPS customers and the products you're working on? Is there an expected timeline for that? A: Cameron Groome (CEO) stated that the company expects to begin such disclosures in the balance of calendar 2026. However, he noted that the granularity of disclosures will be negotiated with clients, and the company's bias will be to avoid identifying specific clients unless there is a compelling reason, to avoid pointing competitors toward their projects.
Q: Can you talk a little bit about who you view as competitors? A: Cameron Groome (CEO) described a narrow competitive landscape: in the native antigen business, there are roughly three companies of consequence globally, with Microbix being the largest by volume. In the controls business, about half a dozen companies are deeply involved, and Microbix is becoming dominant in infectious disease and virology. The company's bias is toward whole-organism controls that work with any test, which is critical for proficiency testing clients.
Q: Given the two to three-year lead time on projects, where are you right now in the process with the largest clients? A: Cameron Groome (CEO) explained that for the largest antigen clients, Microbix is already "embedded" in their tests and cannot be easily unembedded. For CAPS, the company is providing feasibility samples to multiple large test makers, which will likely drive formal contractual agreements. He compared the process to a gaming console: if a company has thousands or tens of thousands of instruments in the field, a new assay (or "game") can be adopted much faster.
Q: Regarding the RNA virus control you mentioned, is that a naked RNA or in virus control? A: Ken Hughes (COO) clarified that Microbix does not make naked oligos for controls. Cameron Groome (CEO) added that the RNA controls are "armored" encapsulated in a phage shell with an RNA payload so that the extraction process, which is critical to assay function, is also controlled. This makes the controls a facsimile of a genuine patient specimen, challenging the entire test workflow from extraction through fluidics.
Q: Are any of the CAPS products currently embedded in commercial stage assays? A: Cameron Groome (CEO) confirmed that some CAPS products are already embedded in commercial-stage assays. He noted that the company is working with companies that have very large installed bases of instruments, particularly in the point-of-care field, and that this represents a return to a flow that was interrupted by a major program cancellation. The goal is to diversify exposure to avoid setbacks from any single client.
Q: Is there any update on orders into China? Has there been any progress? A: Cameron Groome (CEO) reported that China revenues, which had run at CAD2-3 million per year before spiking in 2024 and mid-2025, are beginning to recover. China has moved back up into the six-figure range this year, and the company is looking for a return to the seven-figure range in 2027. He noted that barring another outbreak, it's difficult to see a return to the elevated levels, but a normalized CAD2-3 million per year is not unrealistic.
Q: What's the concentration of your CAPS revenue? Are you diversifying that revenue base? And how long do you expect that to take? A: Cameron Groome (CEO) acknowledged that diversification is a "teeter-totter" adding smaller clients diversifies, but landing a huge client reduces diversification while boosting revenues. He noted that the company is seeing a growing proportion of B2C sales to end-user clinical laboratories, which Jim Currie (CFO) quantified as a 35% quarter-over-quarter increase, making it a seven-figure-plus revenue stream that is very much recurring and less dependent on any single client.
Q: Can you provide enough on the NCIB? A: Jim Currie (CFO) provided figures: in Q3, the company bought back 796,000 shares at a cost of CAD209,000, and year-to-date, 2.3 million shares at a cost of CAD579,000. Cameron Groome (CEO) added that the company is buying back about 15,000 shares per day, balancing cash consumption with prudent buybacks, and may ratchet up toward the maximum level as it tracks back toward profitability.
Q: Do you expect conference attendance and presentation to be in a similar cadence of the first half of the year? Do you expect to increase your marketing and investor outreach efforts in the second-half of the year? A: Cameron Groome (CEO) explained that scientific congress presentations have slowed due to intense client engagement on projects. However, the company plans to increase investor outreach this fall, attending CEM, Planet Micro Cap, and CanTech conferences in late September and October. He hopes to have fresh business announcements by then, or at least be able to discuss the nature of the work being done.
Q: Are there any updates on VTM DXTM product line? Given we currently have few confirmed orders in the pipeline, what's the plan for that assembly line? A: Cameron Groome (CEO) stated that the assembly line is being used principally for "
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
