- Annual Revenue: $15 million, a year-over-year decline of approximately $4 million or 7%.
- Annual Loss from Operations (GAAP): $7.4 million compared to $5.3 million in 2023.
- Adjusted Annual Loss: $3.9 million compared to $1.3 million in the previous year.
- Fourth Quarter Revenue: $14 million, an increase of $900,000 or 7% from the previous year.
- Fourth Quarter Adjusted EBITDA: Approximately $900,000 compared to an adjusted loss of $900,000 in Q4 2023.
- Fourth Quarter Cost of Sales: $7.2 million, a 1% increase from the previous year.
- Annual Cost of Sales: $29.1 million, a 1% increase from the previous year.
- Fourth Quarter Pharmacology Services Gross Margin: Expanded to 49% from 47% in the previous year.
- Annual Gross Margin: 43% for the full year.
- Fourth Quarter R&D Expense: Approximately $2 million, down from $2.8 million in the previous year.
- Annual R&D Expense: $9.5 million compared to $11.5 million in fiscal 2023.
- Fourth Quarter Sales and Marketing Expense: $1.8 million, relatively unchanged from the previous year.
- Annual Sales and Marketing Expense: $6.9 million compared to $6.8 million last year.
- Fourth Quarter G&A Expense: $2.1 million compared to $2.2 million in the previous year.
- Annual G&A Expense: $8.5 million compared to $8.1 million in the previous year.
- Cash Position: Ended the year with $2.6 million in cash and no debt.
- Cash Used in Operating Activities (Q4): $1.8 million.
Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Champions Oncology Inc (CSBR, Financial) ended the year stronger and leaner, positioning for a return to revenue growth and profitability.
- There is a gradual loosening of R&D budgets, leading to an uptick in opportunity generation.
- Operational improvements have led to better revenue numbers and adjusted EBITDA profitability in Q4.
- The ex vivo platform has contributed meaningfully to top-line growth, with expectations for further substantial contributions.
- The company has no debt and is managing cash carefully, expecting a cash-neutral position over the next few quarters.
Negative Points
- The biotech sector's economic environment led to a decrease in bookings growth and an increase in cancellations.
- Operational issues during the year increased costs and delayed revenue recognition.
- Revenue for fiscal year 2024 was $15 million, a decline of approximately $4 million or 7% year-over-year.
- The loss from operations for fiscal year 2024 was $7.4 million, compared to a loss of $5.3 million in 2023.
- The company experienced a contraction in its top line for the first time in many years.
Q & A Highlights
Q: Can you elaborate on whether the improvements seen in Q4 were due to delayed projects getting funding or new business from an improving funding environment?
A: Ronnie Morris, CEO: The improvements in Q4 were due to a combination of factors, including a decrease in cancellations, operational efficiencies, and a slight opening in the funding environment. It's not back to 2021 levels, but there's a positive trend. The organization has improved operationally and commercially, positioning us well for the fiscal year.
Q: Could you provide more details on the operational improvements implemented to drive faster revenue conversion?
A: Ronnie Morris, CEO: We have upgraded our operations technologically, process-wise, and management-wise to become more efficient and scalable. This includes better management and processes to handle biological systems more effectively. We are confident in returning to previous margin levels and have made changes to be more reliable and scalable.
Q: What percentage of your revenues are coming from large pharma, and how has this focus shifted?
A: David Miller, CFO: Approximately 40% of our revenues come from top-tier customers. We've been evenly distributed across Tier A (top pharma), Tier B, and Tier C (new biotech) over the years. Recently, we've focused more on deepening relationships with top-tier customers, which is starting to show in larger opportunities.
Q: Do you feel like you've turned the corner and can return to historical growth levels?
A: Ronnie Morris, CEO: While we are confident in our return to profitability and growth, predicting a return to historical growth levels is challenging due to external market uncertainties. We need more time to assess market conditions and the impact of our operational changes before providing guidance on growth rates.
Q: Are the operational improvements fully implemented, or are you still in the early stages of seeing their benefits?
A: Ronnie Morris, CEO: We are in a good position with the operational improvements we've made, which are now in place. These changes have made us more efficient and scalable, and we are comfortable with our ability to return to previous margin levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
