MindWalk Holdings (NASDAQ:HYFT) held its fourth-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.

Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.

View the webcast at https://events.q4inc.com/attendee/894551483

Summary

MindWalk Holdings Corp. reported a 46% increase in revenue to C$15.6 million for fiscal year 2026, with gross margins expanding to 59%.

The company signed its first two recurring platform agreements and launched new products like Reef IQ, strengthening its SaaS model and platform adoption.

MindWalk Holdings regained NASDAQ compliance and joined the Russell 3000E and Russell Microcap indexes, reflecting improved market support.

Strategic initiatives highlighted include partnerships with AMD and advancements in biological AI and drug discovery platforms.

Management emphasized the company's shift towards recurring revenue models and its focus on proprietary data as a competitive advantage.

Full Transcript

OPERATOR

Good afternoon and welcome to the MindWalk Holdings Corp. financial results conference call for the fiscal year ended April 30, 2020. All participants are in a listen-only mode. Following prepared remarks, we will open the line for questions. This call is being recorded. Before we begin, I would like to remind listeners that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including the company's history of net losses, the ability to convert platform adoptions into contracted recurring arrangements, market acceptance of Reef IQ and Lensai, intellectual property risks, competition, and capital markets conditions. A fuller description of these risks appears in the company's annual report on Form 20F and other filings available on SEDAR+ and EDGAR. All financial figures discussed during this call are in Canadian dollars. Filed financial statements and MD&A are available on the company's website at mindwalkai.com, sec.gov, and on SEDAR Plus.

A replay of this call will also be available following its conclusion. I will now turn the call over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Please go ahead.

Jennifer

Let me turn this call over now to Scott to review our financial results and then I'll make some closing comments before Q&A.

Scott

Thank you, Jennifer, and good afternoon everyone. I will take you through the fiscal 2026 financial results and the drivers behind them. As a reminder, all figures are in Canadian dollars unless otherwise specified and are preliminary pending the filing of our annual report on Form 20-F. The financial story of fiscal 2026 is straightforward: revenue growth, margin expansion, disciplined operating investment in the commercial engine, and a stronger balance sheet.

Revenue grew meaningfully year over year from 10.6 million to 15.6 million, or a 46% increase in fiscal year 2026. Revenue for Q4 2026 was 4.1 million, or a 50% increase as compared to 2.7 million for Q4 2025. The quality dimension of that revenue is as important as the volume. This was the year we booked the first contracted recurring platform revenue in MindWalk Holdings' history through the two enterprise Lens AI agreements Jennifer described.

Those are software layer engagements carrying different economics than project-based services, and they open a revenue model we intend to scale. Gross margin expanded from 5.7 million, or 54% of revenue, to 9.1 million, or 59% of revenue. Gross margin for Q4 2026 was 2.5 million, or 61%, compared to 1.6 million, or 58%. This reflects a shift in revenue mix toward platform and higher-margin service work together with structural efficiencies following the divestiture.

Now on to operating expenses. Total operating expenses were 24.1 million as compared to 42.6 in the prior year. However, the prior year included 21.2 of intangible asset amortization and 1.5 million of impairment that did not recur on a comparable basis. Operating expenses increased by approximately 4.2 million, which reflects deliberate investments in the commercial infrastructure. Research and Development expense for fiscal year 2026 was 4.9 million, up slightly from 4.2 million, demonstrating continued investment in our commercial infrastructure.

Research and Development expense for Q4 2026 was 1.6 million as compared to 0.8 million in Q4 2025. Sales and Marketing expenses were 5.9 million in fiscal year 2026, up from 3.6 million for the same period in 2025, reflecting increased staffing and expanded North American business development capacity. Sales and Marketing expenses for Q4 2026 were 1.5 million versus 0.9 million in Q4 2025. We expect operating expenses to increase as we continue to invest in our pipeline assets and R&D. Net loss from continuing operations was 15.1 million in 2026 versus 33.1 million in the prior year. Net loss for the fiscal year 2026 was approximately 14 million as compared to 30.2 million in the prior year. Loss per share from continuing operations was $0.33 per share versus $0.99 in the prior year. For the quarter ended Q4 2026, net loss from continuing operations was 3.9 million versus 3.4 million in the prior year. Quarter net loss for the fourth quarter of 2026 was 3.9 million as compared to 2.2 million in the prior year.

Now turning to the balance sheet, we ended the year with a cash balance of 11.5 million as of April 30, 2026, as compared to 10.8 million as of April 30, 2025. In summary, the company generated non-dilutive capital by divesting our European operations for net proceeds of US 10.3 million without sacrificing revenue growth. We continue to invest in the infrastructure that matters, integrating Reef IQ into our lab operations and advancing our engineering work with AMD, foundation beneath both our own pipeline and our clients' data management.

With that, I will turn the call back to Jennifer.

Jennifer

Thank you, Scott. As we enter fiscal year 2027, our strategy coalesces around three pillars. The same three we've communicated in our filings and the same three by which we would ask you to measure us. Pillar one: build intelligence-driven recurring revenue. In fiscal year 2026 we integrated Lens AI into every new client program, and clients began paying to add Lens AI applications to their work. The first application layer revenue at scale. That adoption is deepening.

Double-digit clients are now in the Lens AI portal accessing their data directly, with dozens more programs actively moving into that usage. This is our lab-in-a-loop. Outputs from our laboratory work that flow back through the portal where Reef IQ enriches each client's context with every run, and it's the feeder into what comes next: broader data management adoption and recurring SaaS licensing. That deepening is the leading indicator of the recurring revenue engine that we're building.

The market is telling us, engagement by engagement, that this is the layer it needs. Pillar two: advance and protect the internal asset portfolio. We are building a proprietary biologics and vaccine pipeline—dengue, influenza, GLP-1, and our pandemic response platform work—and additional programs across infectious disease and autoimmunity that we will disclose as they mature. These are not service arrangements; they are assets we own, built into our own platform.

Our wet lab is one of the most productive antibody discovery engines in the industry. It has put thousands of molecules into the clinic for our clients and it is doing that work right now. That is the discovery capability behind this pipeline. What's new is the second level we've added to it. Our AI that encodes the relationships between the sequence and the structure and the function, so our models reason with biological context that others don't—surfacing targets and designing molecules that conventional approaches never surface because they can't see that connection.

Neither capability is borrowed and neither is new to us. Now they run as one engine. The AI points to the lab at the right experiments, and the lab's results deepen the AI, and every program compounds, richer in context than either could reach alone. Pillar three: deepen enterprise partnerships. The relationships that matter are the ones that change how the work goes or how the work gets done. AMD is the proof—joint engineering that made our platform faster, made our platform more scalable—running in production every single day, not a logo on a slide.

We're building the same kind of relationship with pharmaceutical and biotech companies right now in those relationships, embedded in artificial intelligence and embedded on the capabilities running with MindWalk Holdings and AMD in combination. When those are far enough along to show results, that's when we'll announce them. And with that, evidence, not just the name. The AI drug discovery sector is being repriced right now—away from the model, toward the context layer beneath it.

That is the layer we have spent two decades building, and it is the layer that we lead. This is no longer our view alone. Independent research has arrived at it. Our clients are arriving at it—one expanded engagement, one platform agreement, one medicine reaching patients at a time. Fiscal year 2026 was the year that the market caught up to what we built. Fiscal year 2027 is the year that we press the advantage: while we are in front, while the field is still catching up, and while the assets we own are compounding on a foundation that no one else has.

This week we are on that stage at AMD, advancing AI in front of the entire industry. A fitting place to be because the company we're describing today is the one the market is now looking for. We thank our shareholders, our clients, and our team for their confidence. Operator, please open the line for questions.

OPERATOR

Thank you. And everyone, if you would like to ask a question, please press Star one on your telephone keypad. Once again, that is Star One if you have a question. Our first question comes from Soyampakula Ramanka from H.C. Wainwright.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Thank you. Good afternoon, Jennifer, Scott.

Jennifer

Hi, RK, how are you?

Soyampakula Ramanka, Analyst at H.C. Wainwright

Good, good. So congratulations on all the developments. Obviously, you know, having the second or two recurring revenue licenses is pretty good, but I just have a few questions, if I may. So to start off, you know, of the 15 and a half million dollars that you recorded as revenue for 2026, fiscal year 2026, what percentage of that revenue comes from the recurring revenue that the first license you have, you know, in the books now?

Jennifer

Yeah. Okay. I mean, our revenue is almost primarily still fee-for-service work. We signed this agreement early the middle of this fiscal year. It was a modest amount and I, you know, obviously I don't disclose individual revenue amounts, but it wasn't significant to our overall revenue for fiscal year 2026.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Okay, perfect.

Scott

I wouldn't mind adding just a little something to that, RJ. Because yeah, I would say, is it material to the 15.5? No, I wouldn't say it's material. I also wouldn't say it's not nothing. It's actually pretty decent. And we're just rev rec-ing every month as we go, right. So we provided an invoice, they paid that invoice, and now we're rev rec-ing in equal distributions over the course of the time frame that they have agreed upon in that agreement. And then I would like to follow up on that with probably the most important part here is, you know, we provided that SaaS model contract to a company who saw the value of the applications that were provided in that contract.

They have been using that contract actively against that invoice and that payment. And 100%, the most important part was they worked with us, they saw the value—we were doing fee-for-service work first—then they turned around and said, we want to actually take the SaaS model license to these applications and take a deeper dive in this. And they did. So of course, going back to everything that I'm pointing to today, that is our primary focus now is, yeah, great, you're seeing it, you're using it.

You know, we're rev rec-ing that, we're watching them use the applications. Maybe most important part here to focus on is of course now, you know, we're targeting that exact profile for Reef IQ for data management engagement. And so kind of back to that thesis, you know, that's really the next step I had asked people to watch for. And that's exactly what we're doing with the dozens of clients who are also utilizing our SaaS model—really the portal with the Lens AI applications as we turn data back as well.

And that's also our focus for the other client with the newer agreement. So just want to make sure I put that in some full context there.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Thanks for that explanation. Yes. Now I understand that since it becomes part of already the programs that the clients had signed up for, it's really difficult to tease out specifically the dollar amount. Probably that's—I'm assuming that's what you're telling me, and that's understandable. So maybe another way to look at this is, as you continue to increase utilization of the platform in any or all of these programs, how—and I'm trying to think about at least margin—so, you know, how can we talk through the margins and say, like, how as you continue to increase the utilization, you know, how the margins could expand from here not only at the gross margin level, but also at the operational level.

Scott

Yeah, look, the, you know, SaaS—one of the reasons people like the SaaS model subscription is because they do generate high margins. I don't have an exact number because we still need to understand what the compute cost that goes with that would be as they start to engage more with it, which would end up in the costs. But I would still expect it to be, you know, a high margin business. And I think once we get a couple more clients and I have a sense of where that'll fall, I could be able to talk a little bit more about it.

But I would expect it to be very healthy margins.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Okay, good. And then on the, on the two things happened over the last six weeks or eight weeks now, not only launching on the Reef IQ, but also the IP that was filed, the application was filed. So as you go forward, how do you plan to pack this together? And is there a way to invite new customers such that they use that as a separate package or would that always be included within your services that you already offer to any of your current customers?

Jennifer

I love that question, RK, because we didn't talk a lot about that on the call. And so I think it is important for us to make sure that it's extremely clear that yes, of course it is something that can be packaged. It's something that I think is more tempting to people who have used our applications, who have used our fee for service, who see what a difference that having the connectivity and the context and the meaning have made to the programs. And I think in large part, if we wanted to point to a few specific but anonymous examples, they have seen that most definitely when we've been able to solve problems that other people couldn't. And that's what drew them deeper, you know, into using our platforms, into taking a SaaS model license, or into contracting us to do that type of Lens AI work with them. Just as a quick note, that type of fee for service work has actually come to an end. We are now asking people to contract us either in a partnership model or they can take a SaaS license to do some of that work on their own. We're no longer offering piecemeal fee for service for people to get introduced to the platform, because the platform in and of itself is more mature than it was when we began offering that.

But can people come to the table and use these platforms without going through the channels of like right now, where we've distributed SaaS model subscriptions, or we've distributed data back to dozens of clients within Lens AI so they can see the applications or trial the applications. That's just one direction. And that's a really unique way because we have these loyal clients, we have clients just day in and day out where we're turning data back.

But I think the most important part here that we need to emphasize is the fact that utilizing Reef IQ to provide context and to provide meaning isn't limited not only to our clients. It's not limited in almost every other way that you would look at software or applications or access to technology in potentially being limited. Reef IQ is something that everyone can access no matter what AI model they're using. Right? And that's what we really see out there.

We see a lot of people in the drug discovery business, people in just areas of research and development, developing AI models in order to try to do things faster, be more accurate, save money, whatever it might be. And what we're finding is they're all running into that same difficulty. That same difficulty being that all of a sudden you've been training their model, they're training their model. When their model sees something it's never seen before, it hasn't trained on it before, it doesn't have the answers.

And unfortunately, that's where these models start to hallucinate. And it's not like using ChatGPT, where you just get back an answer that might be a bit ridiculous. You're probably going to flag it and you're going to see it, but it was hallucinating its answer to it. And it might, you know, cost you 15 minutes to get it back on track, or maybe something you don't recognize is wrong and it costs you an afternoon or a couple of days. When hallucination happens at this level in drug discovery, it can cost hundreds of millions of dollars, it can waste years.

And if people have never experienced it, it's a new target, it's a new indication, it's a first-in-class molecule. They don't know the mechanism of action. When the data is being analyzed and then the information coming back is inaccurate, it can completely destroy and kill a program. And that's where Reef IQ definitively comes into play. Anyone can use it no matter what their AI model is. They can literally snap on. It can be used most definitively with agentic AI, it can be queried directly with generative AI programs, and it's compatible with any other platform that anyone has built.

And it doesn't have competition in the space to do this. So it elevates everyone else's AI models and it is perfectly fine for someone to come to us and say Reef IQ is the orchestration layer that we need and to purchase access to Reef IQ and then to feel confident that this can be utilized in a secure environment without jeopardizing or threatening the security of their data or the systems that their programs are running within. So absolutely, and that's a very important message that we will continue to talk about this year so people can understand the breadth in which this Reef IQ technology can be utilized.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Okay, so one, one last question from me before I step back into the queue. In addition to this, you know, you also have three assets that you're working on. The dengue virus, the influenza and the GLP-1. Of these three, you know, over the next year, which ones do you think could advance enough that either you can attract somebody to help you out in developing further or you would be able to attract enough funding such that you can take this forward itself?

Jennifer

That is an interesting question. So I think, I think there's a number of points and I'll try to be succinct here in my answers to them. The first one being the honest answer is I don't know which one will move the furthest. What's really interesting is we continue to find and build new context around these particular molecules and the diseases that they cause. And so there's an aspect around that of when do we move something forward a little bit more and, you know, when do we take it and take a look at maybe formulation or presentation of that molecule?

We're looking at some of the minute details as we go through, you know, so we kind of on the surface make it sound relatively simplistic. Right. We're, you know, we're immunizing these animals, we're collecting the sera, we're doing this, we're doing that, we're looking for neutralization, et cetera. Reality is we're also taking a fine-tuned look at, you know, what arms of the immune system are we actually amplifying and are we stimulating and to what extent, you know, would we predict MHC class I or class II responses and in what geographies what people are likely to give us these responses and to what extent do we understand the type of response that we need as we move through looking at a desired mechanism of action, a desired type of response that's going to provide lasting immunity or lasting therapy, depending on the product that we're making. So not to get too wordy about that, but it's a little deeper than kind of what we've already provided. And the assets right now as they're moving along, we are quite happy with the way they're moving. But there's another caveat here, which is like what we've shared is not the full extent of, of course, what we're working on.

And so that makes it even more difficult to choose one of those three assets because certainly some are ahead of others, some are just in validation or in repetition because we'll never take a single data point or study and lean into that to move it forward. And others have, you know, different aspects of how far we plan to move them. Some of them have prospective partners already lined up and waiting, which means we aren't going to move them all the way through if they continue to be successful.

And when we look at some of the other assets that, you know, we're moving along that are not, you know, we haven't really talked about in, that we haven't at all talked about in the public domain, who's to know if some of those might even leapfrog and move faster? So what I can say, RK, with certainty is we are focused on these every day. We've built a team and we're continuing to add on to that team in subject matter experts, whether it is in the engineering, whether it is, you know, biologics, experts in immunology and design.

You know, we're continuing to build that team to make sure that as our assets grow, we can continue to keep this a priority. And, and so it is, as I mentioned, it's one of our major three pillars of focus this year. And we are also focused on getting that non-dilutive funding in the door for those assets, making sure that we have a ring-fenced structure that makes piping that money directly in as easy as possible for investors. And that's a lot of work we have been doing over the last quarter in particular in making sure that that's designed in a way that is optimized for MindWalk Holdings and for those assets to move forward.

So all of that is kind of front and center in what we're doing and things are moving along likely and quite well. And I think over this fiscal year we don't know which is going to move the fastest. But we are probably just as excited as you and some of our investors are in seeing how far these go and which ones are moving most quickly to these milestones.

Soyampakula Ramanka, Analyst at H.C. Wainwright

Perfect. No, thank you. Thanks for taking all my questions.

OPERATOR

Thank you. The next question is from Danya Ben Hale from Jones.

Danya Ben Hale, Analyst at Jones

Hi, congrats on the progress and thank you for taking your questions. Thanks, Tanya. First one is what should we expect for the operating expenses trajectory over the next two quarters?

Scott

So I think, you know, our operating expenses, as I indicated in my prepared remarks, I expect them to increase. You know, the work that we're doing on the pipeline assets, the continued R&D in Reef IQ, you know, are all commercial investments we think are worthy. I don't have a specific comment on like the percent that it's going to increase but, you know, I would, I would expect them to increase. We're trying to run as tight a ship as we can and, you know, we're going to make commercial investments where we think they're going to generate a return and obviously try and be mindful of capital allocation and expenses.

Danya Ben Hale, Analyst at Jones

Yes, thank you for that and for the pipeline. What should we expect? Can you give any color or guidance on clinical data updates, publications, any updates on IND-enabling studies on any of the programs?

Scott

We do not have any updates to prepare or to provide here that we haven't already provided with the exception that, you know, we don't have any clinical data for pipeline programs that we have built because we don't currently have pipeline products and so there's no update to be had there. I think we've provided our most recent update on dengue, kind of reinforced it here, and we're getting the cross-reactivity from that platform that we desire. That is one that we continue to take a close look at, the exact details of what that immune response looks like.

We're quite happy in being able to establish that cross-reactive immunity. The next step in that, we expect to finish. We don't have an exact date. We do have a third-party partner that's doing some further analysis on that, but it'll definitely be over the next couple of quarters. I don't think we'll be doing any publications on these molecules just for the sake of, you know, the fact that any publications that we would do on an internal product at this point in time would jeopardize our IP protection of those molecules.

And none of these molecules are all the way through IP protection. And any data that does come out wouldn't have been something that would be included anyway. So what I can say is it's not impossible for other pipeline products. Depending on the partner, you know, that some of those could be in peer-review publications, again, just depending on the partner and the level of disclosure that might have already occurred around those particular molecules historically.

So what I will say is, you know, as these molecules are moving forward, when there are material updates, we will release them. But one thing that we're considering quite important is we get a lot of, not from our analysts, but we do get a lot of requests to just release as much information as possible, release updates as often as possible. And oftentimes I don't think there's something that, like Danya, you or myself would consider to be material updates.

And that's something that, you know, giving the updates in between the material updates is something we want to back away from because they don't seem meaningful. Right. For people like ourselves who understand, like you and I, who understand, you know, what really adds value to a molecule as it's moving forward? The touch-by-touch and play-by-play, little things that move in very small increments but don't represent true milestones with regard to the end game of the product are an area that, you know, we're going to watch closely and to back down from just to preserve energy and professionalism when it comes to announcing these.

So every material milestone that we hit, and we will still consider things like, you know, you know, strong in vitro readouts and in vivo readouts, anything that's moving us toward IND application as a material update, we will keep everyone posted on those.

Danya Ben Hale, Analyst at Jones

Okay, thank you very much. Looking forward. Thank you.

OPERATOR

Thank you and everyone. At this time there are no further questions. That does conclude our question and answer session. It also concludes our conference for today. We would like to thank you all for your participation. And you may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.