Cryoport, Inc. (CYRX) Q3 2025 Earnings Call Transcript

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Overview

The earnings call highlights reaffirmed revenue guidance for 2025 and a strong outlook for commercial revenue growth, supported by FDA approvals. The strategic partnership with DHL is expected to enhance capabilities, and there is optimism for regulatory approvals. While there are some uncertainties, such as the gene therapy pause and lack of profitability guidance for 2026, the overall sentiment is positive, particularly with the potential for market expansion and strategic initiatives. The Q&A session further supports this with positive analyst sentiment and no significant concerns about market exits.

Key Financial Performance

Revenue from commercial cell and gene therapy $8.3 million, a 36% year-over-year increase, driven by the continuing global adaptation of these life-saving therapies.

Life Sciences revenue 16% year-over-year increase, representing 55% of total revenue from continuing operations for the quarter. Growth driven by the rising prevalence of chronic and rare diseases and advancements in cell and gene therapies targeting solid tumors and autoimmune diseases.

BioStorage - Bioservices revenue 21% year-over-year increase, reflecting persistent demand for integrated platforms.

Life sciences product market revenue 15% year-over-year increase, driven by improved demand for market-leading cryogenic systems.

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Operating Highlights

Launch of MVE Biological Solutions next-generation SC4/2V and SC4/3V vapor shippers: These cryogenic systems models have been redesigned with innovative technologies to offer added protection during extended or challenging shipments. They include advancements to enhance performance and reliability, integrated with real-time condition monitoring technology by Tacromed.

Onboarding of IntegriCell cryopreservation services: Cryopreservation services launched in Liege, Belgium, and Houston, Texas, to optimize the supply chain for cell-based therapies through high-quality standardized cryopreserved starting materials.

Opening of global supply chain center in Paris, France: A 55,000 square foot facility at Charles de Gaulle Airport to serve European and global markets, supporting biologistics, bioservices, and future cryopreservation services. Bioservices to open in mid-2026.

Upcoming global supply chain center in Santa Ana, California: Expected to open in the second half of 2026, consolidating three existing locations and featuring next-generation technology to optimize operations and client support.

Revenue growth in Life Sciences Services and Products: Life Sciences Services revenue grew 16% year-over-year, driven by demand for integrated platforms. Life Sciences Products revenue grew 15% year-over-year, supported by demand for cryogenic systems.

Support for commercial cell and gene therapy: Revenue grew 36% year-over-year to $8.3 million, driven by global adoption of regenerative therapies.

Strategic partnership with DHL Group: Partnership aims to enhance positioning in APAC and EMEA regions, leveraging DHL's global scale and capabilities to reshape competitive profile.

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Risk or Challenges

Macroeconomic, Political, and Geopolitical Challenges: The company acknowledges ongoing challenging macroeconomic, political, and geopolitical backdrops, which could impact the growth of regenerative therapies and overall business performance.

Supply Chain Diversification and Tariffs: While no new material impacts from tariffs were experienced in the third quarter, the company has taken steps to diversify its supply chain to mitigate potential impacts. However, any impacts not covered by these mitigations are addressed through surcharges, indicating potential cost pressures.

FDA Shutdown Impact: The current government shutdown of the FDA in the United States could impact the timing of application filings for new therapies, potentially delaying revenue growth from these approvals.

Strategic Partnership Implementation: The strategic partnership with DHL Group is expected to take time to implement fully. Delays in this process could impact the company's positioning in the APAC and EMEA regions and its competitive profile.

Facility Expansion Risks: The company is advancing toward opening new global supply chain centers in Paris, France, and Santa Ana, California. Delays or challenges in these expansions could impact operational efficiency and client support.

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Guidance & Outlook

Revenue Guidance for 2025: Cryoport updated its full-year 2025 revenue outlook to a range of $170 million to $174 million.

Market Trends and Growth Expectations: The regenerative therapies market is in its early stages and remains resilient despite macroeconomic and geopolitical challenges. The company anticipates continued growth driven by advancements in cell and gene therapies targeting solid tumors and autoimmune diseases.

Product Launches and Innovations: Cryoport launched MVE Biological Solutions' next-generation SC4/2V and SC4/3V vapor shippers, featuring advanced real-time condition monitoring technology. These innovations aim to enhance performance and reliability for life sciences applications.

Facility Expansion Plans: Cryoport opened a new 55,000 square foot global supply chain center at Charles de Gaulle Airport in Paris, France, with bioservices expected to open in mid-2026. Additionally, a global supply chain center in Santa Ana, California, is expected to come online in the second half of 2026.

Strategic Partnership with DHL: Cryoport is implementing a strategic partnership with DHL Group to enhance its positioning in the APAC and EMEA regions, leveraging DHL's global scale and capabilities.

Clinical and Commercial Pipeline: Cryoport supports 745 global clinical trials, including 83 in Phase III. The company anticipates up to 7 additional application filings, 1 new therapy approval, and 2 approvals for label or geographic expansions in 2025.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Can you reconcile the implied sequential decline in guidance with the positive momentum across the business?

A:The company acknowledges macro uncertainties such as the government shutdown and tariff landscape, which influence the guidance. Despite this, they remain bullish on their market-leading position and long-term growth rate, which aligns with the cell and gene therapy market. Commercial revenue is a significant portion of total revenue, approximately 18%-19%, and they aim to balance cautious macro views with a strong outlook.

Q:Has the recent release of the triple FDA draft guidance resulted in an uptick in clinical trial interest?

A:The draft guidance targeting orphan markets and biologics approvals is impactful and expected to drive more activity in the future. The REMS requirement will positively impact the implementation of cell therapies in community care settings, as evidenced by strong growth in CARVYKTI revenue.

Q:Are there different trends within gene therapy and cell therapy in the broader cell and gene therapy market?

A:Gene therapy faces financing challenges but remains a long-term opportunity with significant activity and investment. The cell therapy side receives the lion's share of funding, with strong activity and potential approvals expected. The company is more exposed to cell therapy, with gene therapies comprising a single-digit percentage of their clinical trial portfolio.

Q:Is the expectation to reach profitability on a quarterly basis still valid, and what about profitability by 2026?

A:The company is close to achieving positive adjusted EBITDA, with a Q3 loss of $600,000 and positive cash flow from operating activities. They aim to reach positive EBITDA by year-end or early next year. Profitability guidance for 2026 has not been provided, but they are focused on executing growth initiatives and achieving positive EBITDA.

Q:What is driving the strength in product growth, and how does the backlog provide visibility into the product growth outlook for 2026?

A:Product growth is driven by market stabilization and new product launches, particularly in the animal health business. The backlog is now at a normal 6-8 week lead time, indicating market stabilization. High single-digit growth is expected for 2026.

Q:Are there downstream impacts from cell therapy exits by companies like Takeda and Novo?

A:The company views these as strategic portfolio decisions rather than market-driven. They continue to see strong pipeline activity, regulatory filings, and commercialized therapies, with no significant concerns about the exits.

Q:How should we think about segment modeling for Q4, and what are the impacts of the government shutdown?

A:Year-over-year increases are expected in services, while product growth depends on timing, especially for larger orders. The government shutdown causes delays in filings and capital expenditures but is seen as temporary.

Q:What does the ISO certification mean for customer win rates and competitive dynamics?

A:The ISO 21973 certification reinforces the company as a best-in-class provider for cell therapy management, enhancing their quality paradigm and positively influencing client decision-making.

Q:What is the progress on the China first strategy, and what milestones can be expected?

A:No growth in China is assumed for 2026, but efforts are underway for potential growth by 2027. The company recognizes China's importance and continues to work on strategies.

Q:Is there potential for catch-up orders heading into 2026?

A:The market is stabilizing, and while more material requiring cryogenic storage is being developed, no significant catch-up orders are anticipated at this time.

Q:What are the impacts of regulatory changes like the Inflation Reduction Act on cell and gene therapies?

A:Cell and gene therapies are exempt from pricing constraints and tariff talks, with strong support from the White House for their development.

Q:What is the status of client growth at bio storage facilities?

A:The company continues to onboard clients at a robust rate, with significant growth in the Bioservices area expected into 2026.

Q:What is the status of the IntegriCell platform?

A:IntegriCell has started generating revenue from facilities in Belgium and Houston. Revenue is expected to ramp modestly in 2026, with significant growth post-2026.

Q:How will new facilities impact margins, and what is the timeline for achieving long-term margin targets?

A:New facilities may temporarily depress margins due to start-up costs, but operating leverage from existing facilities is improving. Long-term targets of 55% gross margins and 30% EBITDA margins are expected to be achieved as the market matures.

Q:Review of Unclear Management Responses

A:Management avoided providing specific guidance on profitability by 2026, citing a focus on executing growth initiatives and achieving positive EBITDA. They also did not provide detailed segment commentary for Q4, instead emphasizing uncertainties like the government shutdown and timing of orders. Additionally, no concrete updates were given on the China first strategy, with growth in the region deferred to 2027.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

CYRX Transcript

Cryoport, Inc. (CYRX) Q3 2025 Earnings Call Transcript

Positive11-4

Cryoport, Inc. (CYRX) Q2 2025 Earnings Call Transcript

Positive8-5

The earnings call summary and Q&A reflect a generally positive outlook. The strategic partnership with DHL, strong demand in clinical trials, and positive customer feedback indicate growth potential. Gross margins are stable, and the company's strategic focus on Life Sciences and new product launches are promising. Although there are uncertainties like the impact of FDA's REMS update and competitive dynamics, the overall sentiment is optimistic, supported by robust financial metrics and strategic initiatives. The positive response to being more carrier-agnostic post-DHL transaction further strengthens the outlook.

Cryoport, Inc. (NASDAQ:CYRX) Q1 2025 Earnings Call Transcript

Positive5-8

The earnings call reveals strong financial performance with 10% revenue growth and a strategic partnership with DHL, enhancing market positioning. Guidance for 2025 shows continued growth, and management is optimistic about market conditions and shareholder value. The Q&A confirms positive market sentiment, with strong growth in services and a strategic focus on leveraging partnerships and new product launches. Despite some unclear responses, the overall sentiment is positive, supported by robust growth in key areas and strategic initiatives.

Cryoport, Inc. (CYRX) Q1 2025 Earnings Call Transcript

Positive5-7

The earnings call indicates steady growth in revenue, particularly in Life Sciences Services, and a positive market outlook with increased commercial revenue and clinical trials. The strategic partnership with DHL is expected to enhance positioning and provide capital, while the company aims for positive adjusted EBITDA in 2025. Despite some risks in tariffs and supply chain, the company's proactive measures and optimistic guidance suggest a positive sentiment, likely resulting in a 2% to 8% stock price increase.

CYRX Slides

Cryoport Q2 2025 slides: Revenue growth accelerates across all segments

2025-08-05

CYRX Report

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