Cryoport, Inc. Q1 FY2025 earnings call

• Cryoport had a solid start to the year with $41 million revenue from continuing operations, 10% Y/Y growth, and adjusted EBITDA improvement.
• Client engagement and life sciences services grew substantially, Life Sciences Products order patterns stabilized, and strategic partnership with DHL and sale of CryoPDP to DHL (now discontinued operations) were highlighted.
• Life Sciences Services supported 19 commercial therapies and 711 clinical trials (70% of cell and gene therapy trials), with subsequent to Q1 end supporting 20 commercial therapies and six BLA/MAA filings in Q1.
• Partnership with DHL, sale of CryoPDP to DHL; confident in organic growth outlook for FY2025 with revenue guidance $165M to $172M (midpoint 7.5% growth Y/Y).
• Diversified supply chain to mitigate tariff impacts, will implement surcharges if needed, but confident in managing costs.

For the first quarter, Cryoport had $41 million of revenue from continuing operations, representing 10% year-over-year growth. Life Sciences Services revenue increased 17% year-over-year, with commercial cell and gene therapies growing 33% over last year, accounting for 56% of total revenue. Life Sciences Products revenue grew 2% year-over-year with order patterns showing signs of stabilization.

Fiscal year 2025 revenue guidance is $165 million to $172 million, representing 7.5% growth relative to FY2024. Confident in organic growth outlook for the full year.

Tariffs on raw materials like electronics, aluminum, stainless steel could impact costs, but steps taken to diversify supply chain and implement surcharges; uncertainties in economic environment and regulatory changes could affect business.

Q: Could you give us a brief update on the launch of IntegriCell and how the end client adoption is going there? And could you touch upon, CGT trial growth?

A: First, we see the market very positively with commercial revenue continuing to ramp, number of commercial therapies growing, etc. IntegriCell is progressing nicely with facilities open and multiple commercial contracts; CGT market has continued growth in clinical trials, filings, etc.

Q: When I look at the adjusted EBITDA loss, it's sort of a minor amount, but it's including a drag it looks like from contingent consideration. I'm just curious why that as a one-time event wouldn't have been backed out of that number, because if my math is right, it looks like you'd be positive EBITDA without that drag.

A: We did back out the contingent consideration related to one of the acquisitions released in Q1. Adjusted EBITDA did improve significantly over Q1 of last year based on initiatives taken in 2024.

Q: My first one has to do with the service gross margins. I'm getting about like a 500 basis point year-over-year expansion. So I'm curious if, like, what's driving that growth and also if we should expect a similar year-over-year expansion in the balance of the year?

A: We saw a significant increase in the services gross margin for Q1 year-over-year. Expect strong gross margins to continue throughout '25 and beyond as we leverage core services in the cell and gene therapy space, though newer initiatives like IntegriCell may have some impact in the short term.

Q: How are your clients responding to potential 25% tariffs? There was this executive order for drug pricing signed on April 15th. There's the ongoing impact from the Inflation Reduction Act. IQVIA had a year-over-year decline in their services bookings. The CROs are under pressure. Are you seeing, like, what is the response from your clients and demand, the demand side of your business, if any?

A: We really don't have any significant tariff impact on cell and gene therapy. The vast majority of government actions are focused on small molecule and biologic drug product, which is different from cell and gene therapies. We're continuing to see commercial revenues ramp and commercial therapies maturing.

Q: You have Michael on for Puneet. My first one has to do with the leading indicators. You talked about both orders stabilizing for Life Science Products, but also engagement levels increasing meaningfully for the Life Science Solution side. So any way you can kind of put a finer point or qualify the order improvement you're seeing or the nature of conversations with customers and potential customers?

A: On the service side, our clinical trial portfolio is strong with 711 trials and net increase of 10 programs in Q1. BioStorage and BioServices revenue up 22.5% Y/Y, indicating health in the service business with new client on-boarding and diversification.

Q: I wanted to touch quick on the recent news with DHL, I was wondering if you could make any initial comments on the impact of this partnership, and if you've seen any benefit of being carrier-agnostic, maybe in terms of customer conversations or if this just increases your ability to meet the incoming pipeline of larger cell and gene therapies?

A: The strategic relationship with DHL helps increase competitiveness in Asia Pac and EMEA. It fortifies our balance sheet and improves margins for continuing operations, and will ramp up to be significant globally.