BioLife Solutions, Inc. Q2 FY2025 earnings call

• Delivered strong Q2 performance with cell processing revenue up 28% YOY and total revenue up 29% YOY.
• Adjusted EBITDA margin expanded 400 basis points to 24%.
• Invested in Pluristyx, a developer of innovative iPSC-based products for the cell therapy market.
• Focused on cross-selling opportunities with BPM customers, with early traction observed.
• FDA's removal of REMS requirement is seen as an encouraging signal for CGT access.
• Strong cash position with $100.2 million in cash and marketable securities at quarter end.

Cell processing revenue reached $23 million in Q2 2025, a 28% year-over-year increase, driving a 29% increase in total revenue for the quarter. This segment represents approximately 85% of Q2 cell processing revenue. The evo and Thaw platform is expected to contribute $9 million to $10 million, a 3% to 15% growth over 2024.

• Raised full-year total revenue guidance to $100 million to $103 million (22%-25% growth over 2024).
• Cell processing revenue guidance raised to $91 million to $93 million (24%-26% growth over 2024).
• Adjusted gross margin expected to be in the mid-60s in 2025.
• Anticipates reduction in GAAP net loss and expansion in adjusted EBITDA margin in 2025.

• Persistent near-term uncertainties including tariffs, NIH budget pressures, and ongoing FDA leadership changes. However, no material impact on 2025 financial outlook expected.

Q: Maybe just first one on the guidance. The updated guide seems to suggest kind of a 6% ramp in the back half versus what you did in the first half year. Can you just talk about your level of visibility into that given some of the macro you called out? Is that all tied to commercial ramps? Are there any kind of later-stage clinical items you hope to see move further along? And then just maybe one quick one in terms of phasing. Any more color in terms of what you expect to see between 3Q and 4Q? I assume maybe there's a bit of seasonality in 4Q, but Troy, any more color on that would be appreciated.

A: Matt, it's Rod here. Yes, you're correct in the percentage increase first half to second half. And it's based on pretty good visibility with respect to the 80% of biopreservation media revenue that's made up of the 20 largest customers, including distribution, which we have decent visibility on as well. So we feel pretty confident. Based on what we're seeing, there may be some lumpiness between Q3 and Q4, but we're highly confident in the overall second half number and therefore, the full year number.

Q: And then, Rod, you talked a little bit in the prepared remarks, but I would love to just hear a little more color from you on updates around the team's focus on cross-selling dynamics. I know you and the team have been focused on that. I think you talked about kind of early traction. Just any more color in terms of proof points? Is that trialing products? Is that early indications on orders, parts of the funnel? Just any more color you can kind of provide on the cross-selling dynamics and maybe just a little more color in terms of what's maybe near to midterm and then what's more mid- to long term?

A: Yes. So we look at it as a percent of our media customers that are purchasing and utilizing other technologies or tools that we have. That's sort of the framework that we look at it within. And we have some baseline numbers that we're working with coming out of '24 and then applying that same filter to Q1 and Q2. We're internally figuring out the best way to report that out and expect to be able to report it out in Q3 so that we have that be part of the periodic metrics that we report. But I think anecdotally, it's fair to say that we're definitely seeing some traction, and there's a couple of larger accounts that can provide some significant revenue opportunity with respect to adopting, for example, our CT-5 automated fill device with one of our largest customers that has 2 commercial therapies in the market and they're pretty close to making a decision on that. So all in all, I think things are going well. What's also helped is the fact that we finished up our clinical trial drill down in terms of really understanding what are the commercially sponsored clinical trials in the U.S. that we're in. And we talked to that both in the press release and on the -- in my prepared remarks. And so that really gives the sales team a road map to go out and talk to the, call it, 70% of customers or clinical trials, I should say, that are using media and introducing the other products that we have. And then with the 30% that we can identify their use of media, the opportunity there is to understand what is going on there. And the team is working on it. We have a relatively small number of team members in the sales force. But at the same time, the absolute number of clinical trials that they need to go touch are also relatively small. So give us another quarter, and we'll be able to get more specific around that, Matt.

Q: Just wanted to touch on Pluristyx a little bit. The company also has sort of this PluriFreeze, cryopreservation product. Do you view that as a competitor today? Obviously, you have a huge moat and are the incumbent in commercial therapies. Would a future acquisition of Pluristyx allow you to enter any other parts of the market?

A: Yes. So we're clearly aware of their PluriFreeze product. And again, we have respect for what their capabilities are. We do not see them as any kind of competitive threat from a cryopreservation perspective. Their focus with respect to cryopreservation has been specifically around iPSC cells and trying to gain some incremental benefit. So that's kind of a side tangential part of it all. The real big focus for us is this idea that they're starting to develop some assays, which is an area that we're interested in looking at more closely. And that's really what the focus of the investment was about.

Q: It seems commentary lately has just been more recently focused around the cell processing segment, obviously, a priority just given where it's at. But I'd like to take your temperature on expectations around evo and Thaw and just given your comments around Pluristyx, just how that segment fits into the portfolio longer term?

A: Yes. So evo and Thaw are -- we do obviously present those separately, albeit combined. evo continues to be a product line that we have under evaluation. With respect to whether it's a long-term fit with the overall strategy of BioLife. Thaw, we are definitely convinced that, that will be something that we will maintain in the product portfolio. It's incredibly consistent with respect to the revenue it generates on a quarterly basis. So it's a nice product line to have. There was a second part of your question?

Q: I think that answered it pretty accurately. I appreciate that. And then focusing on early clinical stage portion of the business within media. Just given the continued funding challenges and headlines from a regulatory perspective and things of that nature, what are you seeing in terms of demand trends there?

A: Yes. Good question. So I would say that in Q2, it's fair to say that all of our customer segments were up year-over-year. But from a percentage increase, I would say the lightest of those would be what we call our other clinical customers, which are the smaller earlier stage Phase I, Phase II customers. So clearly, we're seeing a little bit of softness, but nevertheless, they're still up year-over-year, and we expect that to continue for the balance of '25.

Q: On the quarter. Maybe first, you called out strength in both your direct sales and distribution network. And I know distribution is often exposed to more uncertainty. So is there anything you would call out there in terms of visibility? Or has anything changed there from the first quarter?

A: No, you're right in pointing out the visibility issue. So in our last call, I think we stated that to the extent that we expected to see any ramifications of in particular, NIH funding that we would likely see it through our distribution channel, which sells primarily to small labs, et cetera. We have not seen that, certainly not in Q2. And based on the forecast that we received for the second half of the year, we're not seeing any weakness there either. So at least as we sit today, we're confident that, that distribution line is going to continue to have some strength to it throughout the rest of the year.

Q: Just on the M&A front. I know you acquired the remaining PanTHERA business. Maybe if you could just touch on how you see this business advancing your existing portfolio, maybe boosting your market share? And then how do you view your M&A strategy going forward?

A: Yes. So with respect to PanTHERA, really, the fundamental driver there was to really underscore our market leadership within the area of biopreservation. So by adding IRI, which has some unique characteristics relative to our core product line, in addition to bringing on several very accomplished cryobiologists to beef up our staff and scientific expertise in that area. Really, I think it puts us without question between that and the market leadership that we have from a clinical trial standpoint and from an approved therapy standpoint. It's hard to debate that BioLife is the market leader and gold standard in biopreservation. So that was a strong driver for doing that. What we expect to come out of it is a line of products sort of in the second half, and it will probably be one product first with several others that come behind it. And the opportunity there with these products are to have better cryopreservation efficacy when combined with our standard CryoStor product. It has the opportunity to have the same cryopreservation efficacy, but with a lower concentration of DMSO. And then the real, I think, home run for us would be to be able to allow these cell therapies to be shipped not at LN2 196 -- minus 196 temperature ranges, but more minus 80. And I think that's a much longer term but potentially significant alteration to the way that cold chain logistics works in today's marketplace.

Q: Could you give us some comment on the rationale behind the $2 million convertible note and also whether you will eventually acquire that target company? And also in general, your M&A strategy going forward?

A: Yes. So I'll speak to the second part of your question with respect to the Pluristyx investment. And whether we did structure the investment similar to that of PanTHERA and Sexton, thank you, Troy. And so in that case, we do have an opportunity to have some rights relative to an acquisition down the road. But what will determine that is 2 things. One is our conclusion that assays are a place that we want to be from a product adjacency and that the uptake or the revenue growth that Pluristyx is going to realize over the next few years is going to be sufficient to make a difference to us. So relative to Pluristyx, that's sort of how it works. In terms of the overall M&A strategy, I think it really is focused on a disciplined approach to make sure that whatever we do has a strategic rationale to it with respect to where we already are from a product portfolio. So again, in the simplest terms, it's between the walls of the cell manufacturing facility. It's products that are adjacent to products we already have. And whether that, as in the case of PanTHERA, solidifies our market leadership position or some other opportunities that we're looking at, which would take an existing product line that we have and move us into the market leadership position. Those are the kind of things we're looking at.