• Life Sciences Services Revenue Growth: 9% growth for the third quarter.
• BioStorage and BioServices Revenue Increase: Over 12% compared to last year.
• Gross Margin for Life Science Services: Improved to 46%.
• Full Year Revenue Guidance: Maintained at $225 million to $235 million.
• Adjusted EBITDA and Cash Flow: Positive through the quarter.
• CRYOPDP New Contracts: Nine high-value contracts with a total value of over $6 million per year.
• Global Clinical Trials Supported: Total of 691, a net increase of 21 clinical trials over last year.

• Warning! GuruFocus has detected 6 Warning Signs with CYRX.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CryoPort Inc (NASDAQ:CYRX) reported a 9% growth in its life sciences services business for the third quarter, with BioStorage and BioServices revenue increasing over 12% compared to last year.
• The company maintained its full-year revenue guidance of $225 million to $235 million, indicating confidence in continued growth despite market challenges.
• CryoPort Inc (NASDAQ:CYRX) launched its IntegriCell cryopreservation solution, enhancing its end-to-end global temperature-controlled supply chain platform.
• The company reported improvements in gross margin, adjusted EBITDA, and positive cash flow through the quarter, reflecting successful cost reduction and realignment strategies.
• CryoPort Inc (NASDAQ:CYRX) supported a total of 691 global clinical trials as of September 30, with a net increase of 21 clinical trials over the previous year, indicating strong engagement in the clinical trial market.

Negative Points

• The life sciences product business experienced ongoing softness, impacting overall revenue growth.
• CryoPort Inc (NASDAQ:CYRX) faced weaker cryogenic freezer demand in North America and EMEA, contributing to uneven market recovery in its MVE Biological Solutions business.
• Biopharma market funding took a sequential step down in the third quarter, potentially affecting future trial activity and revenue.
• The commercial revenue was down slightly sequentially, reflecting uneven performance among commercial customers.
• The company acknowledged that macro and sector-specific challenges impacting the life sciences tools industry are expected to continue in the near future.

Q & A Highlights

Q: Can you discuss the timeline for label expansions in the clinical trial service business? A: Jerrell Shelton, CEO: It takes about 6 to 12 months for label expansions to impact operations. Mark Sawicki, CSO, added that early treatment lines are already benefiting the company, with projects from J&J, Legend, Gilead, and Bristol-Myers Squibb contributing. Newer products like CRISPR and Vertex will start contributing revenue in 2025.

Q: How is the MVE products business performing, particularly in terms of dewars and freezers? A: Jerrell Shelton, CEO: The market recovery for MVE is uneven. Dewar sales met expectations, but cryogenic freezer demand was weaker in North America and EMEA. However, there was an increase in order flow from APAC, excluding China. Robert Stefanovich, CFO, noted that despite lower revenue, the products business maintains a robust gross margin and positive cash flow.

Q: Can you provide an update on the BioStorage business and the IntegriCell launch? A: Mark Sawicki, CSO: BioServices revenue increased by 12%, with several projects onboarded in the last six months. IntegriCell opened in October in Houston, with a grand opening in Belgium planned. Initial contracts have been signed, and revenue contribution is expected to grow next year.

Q: What are the expectations for market demand and cost actions in 2025? A: Mark Sawicki, CSO: The services business is progressing well, with a strong clinical portfolio. Jerrell Shelton, CEO, mentioned that MVE remains profitable despite depressed demand, and the company is implementing a strategy for China. Robert Stefanovich, CFO, highlighted cost reduction efforts expected to generate over $20 million in annualized savings, with positive EBITDA anticipated in 2025.

Q: How is the commercial revenue performing, and what are the expectations for the fourth quarter? A: Mark Sawicki, CSO: Commercial revenue was slightly down sequentially but up 14% year-over-year for the nine-month period. A strong step-up is expected in Q4 as established therapies ramp up and new therapies contribute. Robert Stefanovich, CFO, reiterated the full-year guidance of $225 million to $235 million, with a conservative view on Q4 product expectations but robust services growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.