Revenue during the quarter dropped 14.55 percent to $14.87 million from $17.40 million in the previous year period. Total expenses were 90.46 percent of quarterly revenues, up from 67.30 percent for the same period last year. That has resulted in a contraction of 2316 basis points in operating margin to 9.54 percent.

Operating income for the quarter was $1.42 million, compared with $5.69 million in the previous year period.

"Our exceptional third quarter financial results feature revenues of $14.9 million and I'm pleased to report that $4.1 million came from product revenues," said Codexis president and chief executive officer John Nicols. "Through the first nine months of 2016, product revenues have grown by over 60% versus the same period last year, highlighting the growing momentum of our engineered enzymes being increasingly used in our customers' processes. Revenues for both the quarter and year to date reflect the recognition of an $8.0 million milestone earned in September from the successful technology transfer of our CodeEvolver protein engineering platform technology to Merck. Payment for this milestone was received in October 2016. Net income for the third quarter of $1.4 million was positive for the second quarter in a row."