Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors

You're looking at Cyanotech Corporation (CYAN) to see if their microalgae growth story is defintely translating into financial stability, and the short answer is a mixed bag of progress and peril. For the full fiscal year 2025, which ended March 31, the company posted net sales of $24,215,000, a modest 5.0% increase, but still closed the year with a net loss of $3,203,000, even after cutting the operating loss by almost 45% compared to the prior year. The opportunity is real, though: the most recent Q2 Fiscal Year 2026 results show a significant acceleration, with net sales jumping 19.3% year-over-year and net income hitting a break-even point of just $1,000, a major operational win. But here's the quick math on the risk: that recent momentum is overshadowed by a critically tight balance sheet, as the company's latest filing notes a substantial doubt about continuing as a going concern due to liquidity issues, leaving working capital at a razor-thin $39,000 as of September 30, 2025. We need to look past the sales growth and focus on the immediate cash runway.

Revenue Analysis

You're looking for a clear picture of how Cyanotech Corporation (CYAN) actually makes its money, and honestly, the story for fiscal year 2025 (FY2025), which ended March 31, 2025, is one of steady growth masked by a major shift in product mix. The company's total net sales for FY2025 came in at $24,215,000, a solid 5.0% increase from the previous fiscal year's revenue of $23,071,000. That's a decent start, but the real insight is in what drove that number.

Here's the quick math on their primary revenue streams. Cyanotech Corporation is essentially a two-product company, focusing on microalgae-based nutritional supplements. Their flagship products, BioAstin® and Hawaiian Spirulina Pacifica®, account for almost all of their sales, with a small but growing segment in specialized services.

The core of the business is BioAstin®, their natural astaxanthin supplement, which is a powerful antioxidant. This product line was responsible for the lion's share of revenue in FY2025, bringing in approximately $15.7 million, which represents about 65% of total net sales. Their second major product, Hawaiian Spirulina Pacifica®, a nutrient-rich superfood, contributed roughly $7.6 million, or 32% of net sales. The remaining revenue came from contract extraction and R&D services, which generated $849,000, about 4% of the total. That's a highly concentrated revenue profile, so you defintely need to watch demand trends for those two main products.

The most important change in the revenue streams isn't the total growth, but the type of sales. In FY2025, Cyanotech Corporation saw a huge surge in bulk sales-meaning raw ingredients sold to other manufacturers-while their packaged goods sales (like their Nutrex-brand products sold directly to consumers) slowed down. This shift is a double-edged sword: higher bulk volume drives revenue but often means lower margins. Bulk sales growth was significant:

• Bulk Spirulina sales grew 53% year-over-year.
• Bulk Astaxanthin sales grew 74% year-over-year.
• Packaged sales, however, declined by 5%.

This dynamic continued into the most recent reporting period, with net sales for the second quarter of fiscal year 2026 (Q2 FY2026, ended September 30, 2025) jumping 19.3% year-over-year to $6,976,000, still driven by higher bulk sales and strong online channel performance. This trend shows a clear market appetite for their raw product, but the company's challenge is to re-accelerate the higher-margin packaged sales. For a deeper dive into who is betting on this turnaround, you should read Exploring Cyanotech Corporation (CYAN) Investor Profile: Who's Buying and Why?

Here is the breakdown of the full fiscal year 2025 revenue:

Profitability Metrics

You need to know if Cyanotech Corporation (CYAN) is making money, not just selling product. The short answer for fiscal year 2025 (FY2025) is that they're not yet profitable, but the trend is defintely moving in the right direction. Their focus on operational efficiency is paying off, cutting deep into their losses.

For the full FY2025, which ended March 31, 2025, Cyanotech reported net sales of $24,215,000. Here is the quick math on their core profitability metrics compared to the prior year:

• Gross Profit Margin: 28.4% (Up from 25.8% in FY2024)
• Operating Profit Margin: -10.4% (Loss of $2,508,000)
• Net Profit Margin: -13.2% (Loss of $3,203,000)

The company is still operating at a loss, but the substantial jump in gross margin is a critical sign of operational improvement. That's a 2.6 percentage point increase, driven by higher production volumes and efficiencies in their unique microalgae production process in Kona, Hawaii.

Operational Efficiency and Margin Trends

The most important takeaway for investors is the trend. Cyanotech is showing clear momentum in operational efficiency. While the gross profit of $6,876,000 in FY2025 is still relatively low for the sector, the year-over-year improvement is significant. The focus on cost management is visible in the reduction of their operating loss.

Here's the quick math: the operating loss was nearly cut in half, dropping from $4,592,000 in FY2024 to $2,508,000 in FY2025. This suggests that management's cost control initiatives and production efficiencies are having a tangible impact on the bottom line, even before accounting for non-operating items like interest and taxes. This is a business turning a corner on cost of goods sold (COGS) and overhead.

Industry Comparison: The Profitability Gap

When you look at the broader nutritional supplements market, Cyanotech's margins show they have a long way to go to catch up. The average profit margin for the US nutrition and supplement market is around 38%. While that industry figure is a general 'profit margin' and not strictly a gross margin, it highlights the gap.

To be fair, Cyanotech is a vertically integrated producer of specialized microalgae-based ingredients (astaxanthin and spirulina), which often means higher initial capital costs and a different cost structure than a pure-play supplement retailer. Still, their 28.4% gross margin is substantially below the broader industry's benchmark, meaning they have less buffer to cover their operating expenses (SG&A) before hitting a net loss. This is why their operating margin is still deep in the red. You can dig deeper into the company's market position and investor base by Exploring Cyanotech Corporation (CYAN) Investor Profile: Who's Buying and Why?

What this estimate hides is the potential for non-linear margin expansion. As production volumes increase, the per-unit cost of goods sold (COGS) for a fixed-cost operation like Cyanotech's farm should drop faster, which could rapidly push that 28.4% gross margin toward the industry average, potentially flipping the operating loss to a profit in the near term. The Q2 Fiscal 2026 results, showing a break-even net income of $1,000, suggest this momentum is accelerating.

Debt vs. Equity Structure

You're looking at Cyanotech Corporation (CYAN) to understand its financial foundation, and the clear takeaway is this: the company is highly leveraged, relying significantly on debt relative to its equity base. Its most recent Debt-to-Equity (D/E) ratio of 1.04 signals a much higher risk profile than its peers in the broader health and supplement space, which is a critical factor for any investor to consider.

The company's financing strategy is currently defined by a heavy reliance on secured and related-party funding. As of the September 30, 2025, quarterly report, the total shareholders' equity stood at approximately $8.06 million. The company's total debt is substantial against this equity figure, with the most immediate pressure coming from a related-party revolving credit facility.

Here's the quick math on the specific debt components as disclosed in the November 2025 filings:

• Related-Party Revolver: $4.200 million outstanding (with a total capacity of $4.600 million).
• 2012 Term Loan: $2.809 million remaining balance.
• 2023 Term Loan: $370,000 remaining balance.

This structure means that roughly 57% of the specific debt cited is held by a related party, which is an important signal about where the company is able to secure its capital. This isn't defintely a red flag, but it does mean the company's financial flexibility is heavily tied to a single, non-traditional lender.

Debt-to-Equity and Industry Comparison

The 1.04 Debt-to-Equity Ratio tells you that for every dollar of shareholder equity, Cyanotech Corporation (CYAN) has $1.04 in debt. This is high, especially when you compare it to the average for the Biotechnology industry, which often sits closer to 0.17. This gap highlights that Cyanotech Corporation (CYAN) is using external financing-debt-to fund its assets and operations at a rate that is six times the industry benchmark.

A high D/E ratio means the company is highly leveraged, which can amplify returns in good times but dramatically increases the risk of default if revenues falter. This is a capital-intensive business, so some debt is expected, but the current ratio suggests a thin margin of safety for equity holders.

Recent Financing Activity and Risk Mapping

The most crucial aspect of Cyanotech Corporation (CYAN)'s debt situation isn't the ratio itself, but the context of its recent activity and liquidity. The company's 10-Q filing, dated November 10, 2025, explicitly cites a 'substantial doubt about continuing as a going concern.' This is the most serious risk you face as an investor.

This risk stems from a few factors: prior noncompliance with loan covenants (which required waivers) and a bank freezing further advances on a line of credit. The company's ability to balance debt financing and equity funding is currently reliant on the continued support of the related-party revolver and its ability to execute cost controls. This is a fragile balance. You can review the company's strategic priorities for addressing this in the Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN).

The company is not currently issuing new equity or debt in the public markets to pay down this debt; instead, it is managing tight liquidity-cash was $649,000 and working capital was only $39,000 as of September 30, 2025. This is a cash-flow-dependent scenario, not a stable balance sheet one. The action for you is to monitor the next quarterly report for any signs of the bank lifting its freeze or a reduction in the related-party debt.

Liquidity and Solvency

You need to know if Cyanotech Corporation (CYAN) has the cash on hand to cover its near-term bills, especially as they pursue their Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN).. Honestly, the liquidity position is tight. This isn't a company sitting on a pile of cash; it's a firm managing a challenging balance sheet while trying to grow sales.

The core measure of short-term financial health-the Current Ratio-was around 0.98 for the trailing twelve months ended October 2025. This is a red flag. A ratio below 1.0 means current liabilities (debts due in one year) are greater than current assets. For a quick check on their most liquid assets, we look at the Quick Ratio (Acid-Test Ratio), which removes inventory from the current asset calculation. Given that inventory was a significant portion of their $10,545,000 in current assets at the close of fiscal year 2025 (March 31, 2025), the Quick Ratio is defintely much lower than 0.98, suggesting a significant reliance on selling that inventory quickly to meet obligations.

Working capital, which is simply current assets minus current liabilities, tells the same story. At the end of FY 2025 (March 31, 2025), working capital stood at a very slim $302,000. By September 30, 2025, that figure had shrunk further to just $39,000. That's a razor-thin margin to run a business with $24,215,000 in annual net sales.

• Current Ratio (TTM Oct 2025): 0.98
• Working Capital (Mar 31, 2025): $302,000
• Working Capital (Sep 30, 2025): $39,000

Here's the quick math on cash flow: Cyanotech Corporation has sustained negative cash flows from operations for both fiscal year 2024 and 2025. This means the core business is not generating enough cash to fund itself. They are relying on external sources to bridge the gap and fund capital expenditures. For the six months ended September 30, 2025, the company had a net increase in cash of $392,000, but this was driven entirely by financing activities, which provided a net of $698,000 in cash.

This reliance on financing is the central liquidity concern. The company explicitly noted in its filings that these conditions raise substantial doubt about its ability to continue as a going concern (the assumption that a business will remain in operation). This is a serious disclosure. Plus, the bank instituted a freeze on additional advances from their revolving credit agreement back in June 2023. While they have access to a related-party revolver, this is a stop-gap, not a long-term solution. They are managing expenses and inventory tightly, but the balance sheet remains stressed. Cash on hand as of September 30, 2025, was only $649,000.

The risk is clear: without a sustained, positive shift in cash flow from operations, the company will need to continue relying on debt or equity raises, which dilutes shareholders or increases interest expense, which was already $630,000 in FY 2025.

Valuation Analysis

You're looking for a clear signal on Cyanotech Corporation (CYAN) now that we have the full fiscal year 2025 data, and the short answer is that traditional valuation metrics paint a complex picture, largely because the company is still navigating losses. As of November 2025, the stock appears cheap on a book value basis, but its negative earnings make a true valuation difficult.

The core issue is profitability. For the fiscal year ended March 31, 2025, Cyanotech Corporation reported a net loss of $3,203,000, or $0.45 loss per diluted share. This negative number immediately renders the Price-to-Earnings (P/E) ratio - the most common valuation tool - effectively meaningless, or at least unhelpful for comparison against profitable peers. It's a red flag that demands a deeper look at operating cash flow and balance sheet health.

Here's the quick math on other key multiples, which highlight the company's current position:

• Price-to-Book (P/B): The P/B ratio for fiscal year 2025 stood at just 0.28. This is a significant discount, suggesting the market values the company at less than a third of its net asset value (assets minus liabilities).
• Enterprise Value-to-EBITDA (EV/EBITDA): The Trailing Twelve Months (TTM) EV/EBITDA is highly negative, around -39.60. This reflects a negative Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), confirming that operations are still burning cash, even before accounting for non-cash items.

The stock price trend over the past year has been volatile, which is typical for a micro-cap stock on the OTC market. Over the last 52 weeks, the stock has traded in a wide range, from a low of $0.230 to a high of $0.600. As of mid-November 2025, the share price is near $0.320, representing a decline of about -38.46% over the last year. That's a serious headwind.

The company does not pay a dividend, so both the dividend yield and payout ratios are 0.00%. This is standard for a company focused on turning around its profitability and conserving capital.

What this estimate hides is the lack of institutional coverage. Analyst consensus on the stock is thin; some data aggregators show a consensus of Hold, while others, based on technical signals, have recently upgraded it to a Buy candidate. Honestly, with a market capitalization around $2.37 million, you're mostly looking at independent and quantitative analysis, not BlackRock-level coverage. One valuation model suggests a fair value of $0.56, implying it is currently undervalued, but you must be wary of models that don't fully account for the consistent net losses.

The low P/B ratio is your key opportunity signal, suggesting a potential deep-value play, but the negative P/E and EV/EBITDA are your near-term risks. The market is pricing in significant distress. For a more complete view, you should also review the full context of the company's financial health in the main post: Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors.

Next step: Dig into the latest quarterly report (Q2 2026) to see if the recent positive momentum in sales and gross margin is sustainable.

Risk Factors

You need to look past the recent positive sales momentum at Cyanotech Corporation (CYAN) because the core financial risk, the ability to continue as a going concern, is still the dominant factor. While management is making progress on margins, the company's liquidity position remains extremely tight, which is a red flag for any investor. This isn't just theory; it's a risk explicitly detailed in their recent regulatory filings.

The most immediate internal risk is the precarious state of the balance sheet. As of September 30, 2025 (Q2 Fiscal Year 2026), Cyanotech Corporation (CYAN) reported a cash position of just $649,000 and working capital (current assets minus current liabilities) of only $39,000. This severely limits their financial flexibility and ability to handle unexpected operational shocks. They also rely heavily on a related-party revolving credit facility, which has $4.200 million outstanding against a $4.600 million capacity, and they have faced prior debt covenant noncompliance issues. That is a very thin margin for error.

• Liquidity is the single biggest threat.

Operational risks are compounded by their single-site cultivation and processing facility in Kona, Hawaii. This means production is highly vulnerable to local weather patterns, which can cause significant production problems and subsequent revenue volatility. Furthermore, their dependence on a few large customers for a significant portion of their sales-Net Sales for Fiscal Year 2025 were $24,215,000-means a loss of even one major contract could immediately destabilize their financial projections.

To put the financial health into perspective, here is a snapshot of the core liquidity and profitability challenges:

On the external front, Cyanotech Corporation (CYAN) faces intense competition from global microalgae producers, many of whom are not constrained by the higher operating costs of farming in Hawaii. Plus, the dietary supplement market is subject to continuous regulatory changes from the Food and Drug Administration (FDA) and other bodies, which can impact product claims and market access. The CEO also noted that economic uncertainty, shifting demand, and potential new tariffs could defintely impact costs and global markets, especially for contract extraction services.

The good news is that management is aware of these risks and has mitigation strategies in play. They are focusing on operational efficiency, which helped boost the Gross Profit Margin to 34.3% in Q2 FY 2026, up from 25.3% in the prior year period. They are also using strategic pricing for their Nutrex-branded products to strengthen their competitive position. If you want a deeper dive into their long-term vision that underpins these strategic moves, you should review their Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN). The immediate action, however, must be to closely monitor their quarterly cash flow and debt covenant compliance in the next two quarters; if onboarding takes 14+ days, churn risk rises.

Growth Opportunities

You're looking at Cyanotech Corporation (CYAN) and seeing a steady-as-she-goes operation, but the real story is in their strategic shift toward operational efficiency and the premium market. The company is poised for modest revenue growth, driven by a focus on high-margin products and cost discipline, which is finally translating into better gross margins.

For the full fiscal year 2025, Cyanotech Corporation reported total net sales of $24,215,000, a 5.0% increase over the prior year. This growth is anchored by their two flagship products: BioAstin® natural astaxanthin, which brought in approximately $15.7 million and accounted for about 65% of net sales, and Hawaiian Spirulina Pacifica®, contributing roughly $7.6 million. That's a very clear product concentration, so their growth bets are simple: push the premium microalgae.

• Focus on BioAstin® and Hawaiian Spirulina Pacifica®.
• Expand into key e-commerce and bulk ingredient markets.
• Drive brand value through differentiated storytelling.

The near-term revenue forecasts reflect this focused strategy, projecting net sales of $25.06 million for fiscal year 2026 and $25.56 million for fiscal year 2027. This isn't explosive growth, but it is a realistic, steady climb that relies on a strong competitive moat (a sustainable competitive advantage).

The Competitive Edge and Future Drivers

Cyanotech Corporation's core competitive advantage is its unique, vertically integrated production facility on the Kona Coast of Hawaii. This 96-acre farm leverages the region's favorable climate and access to cold, deep ocean water, which is a key differentiator for product purity and quality. This Hawaiian origin and the company's GMP (Good Manufacturing Practices) certification allow their BioAstin® brand to command a premium in the natural astaxanthin market, which is projected to grow at an 8.5% Compound Annual Growth Rate (CAGR).

Their strategic initiatives are less about flashy acquisitions and more about execution: operational excellence. Here's the quick math: in the second quarter of fiscal year 2026, the gross profit margin expanded by nine percentage points to 34.3% from the prior year, a direct result of production efficiency gains and strategic pricing. This margin improvement is a more reliable growth driver than chasing volatile top-line sales, especially in a competitive supplement market. You can read more about their core philosophy here: Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN).

Near-Term Risk: Liquidity and Going Concern

To be fair, you can't look at growth without acknowledging the financial foundation. While the operational turnaround is defintely positive, the company's liquidity remains tight. As of September 30, 2025, Cyanotech Corporation reported cash of only $649,000 and working capital of $39,000. What this estimate hides is a significant going concern risk. The company itself has noted substantial doubt about its ability to continue as a going concern, citing prior covenant noncompliance and reliance on a related-party revolver. This means that while the business model is improving, the balance sheet still presents a major risk. The growth story is contingent on successfully managing this debt and liquidity challenge.

Next Step: Review the company's latest 10-Q filing to assess the terms and maturity dates of the related-party debt facility.