Champions Oncology (CSBR) 18 Jul 242024 Q4 Earnings call transcript

Greetings. Welcome to Champions Oncology's Fourth Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. Please note this conference is being recorded.

I will now turn the conference over to your host, Dr. Champions at CEO Morris, Oncology. Ronnie

You may begin.

I afternoon. am Ronnie Oncology. Champions of CEO Morris, Good

is our earnings David Thank today me Joining Miller, joining for you Chief us our quarterly call. for Officer. Financial

will remind today's from during that what Before I described And begin, you we'll those forward-looking call. differ be could results in that actual are statements making materially I statements.

XX-Q that of that differ the GAAP is be our earnings Form Additional non-GAAP during to available reconciliation release. A measures results information and could on call XX-K. cause financial may available factors discussed measures financial Form in on to is the

positioned This to a growth revenue profitability. a historical positive challenging has transition return was I past also and the negative emerging the will but the With trends. and one then that year year disappointing impact for compared performance, to the and us to financial results ending detail one. leaner stronger,

we combination thus the growth achieving. were negatively have discussed a retraction we they in the our biotech indicating and Over our in decrease to the to and been that Externally, budgets, R&D external the factors. affected of accustomed year, weakness challenges a leading sector by bookings caused internal

not did from Our still solid bookings were but the year. prior expand

less rate a conversion. only manifest economic [indiscernible] and above customers study cancellations, itself experienced parts environment of the the lower size. past. as in heavily in the biotech our a not did our quicker or also increase historical in study while the plug companies norms, noticing as slight we cancellation that bookings on pull were well than with The decrease revenue to resulted new in weakness services booking bookings, study our This average our The

to impacted revenue the -- need discussed we course led the some that increasing our delaying financial by plagued as the of recognition. Additionally, and some costs to work, our results. operational the issues repeat issues the year, we These on of were during

] news. better [ the Now

As year, budgets pivot a towards our opportunity and fiscal of we R&D to end leading uptick new detected in have loosening we an the year gradual generation.

have sign focused deepening recently Cancellations to These big the sector. bookings somewhat downturns have less studies ability our this to are the on customers and pharma the signed Strategically, expanding more larger on customers. we relationships and susceptible slowed. with in have

companies are Biotech focus integral strategic our and feel provides downside this of still protection. upside opportunity an but business, part that we

the QX Regarding constructed. our of than and that is are operational we internal challenges, of adjusted scale our revenue profitability improved achieved EBITDA in track improvements. in of and operations confident more The are previously on the to the number evidence is some result back this which build and

with also But our enable operational to as need costs gross that increase believe margins we in growth smaller the have our systems and operating a improved improved with to revenue our revenue expense. redesigned teams we our

Turning core industry-leading us in give continues our to our products. vivo an to remains edge The business spend strong. PDX and

we line the growth Vivo confirming fiscal We substantially, plaform of gross even Vivo has meet increased last lifting top to our the meaningfully with year. revenue contribution continue Vivo's and Ex are XX%, overall key excess in [indiscernible] at with contributed Ex of contribution over and years develop our hire strategic the Ex to addition key more that revenue growth this optimistic margin. a our end the few and

further customer business are working to base. is the and biomarker expand clinical growing, Our we

we our have excited continue the developed. development Corellia, wholly owned compounds that the be subsidiary, about to regard target With on we drug to

to discussions of in engaged our programs. actively out-license are several We

entity. We a are for impact of cognizant and our on carrying cost bottom the line results this

on fronts. to working are two we such, burden As the minimize

actively spending while of not license harming the our are while we we development. for target potential reducing searching are First, our

support to with investors engaged raise capital continue growth. actively we to our Second, an to and be accelerate in effort

have new summary, while last to take improvements made financial a as robust for was In expectations. year. will from and anticipate perspective, quarter we Despite our that the historical below and we year platform, to is strong trajectory that hold slowly continue year's this stellar the have continue the a on targeted head down we seen comprehensive a stage. our as performance, a anticipated We team fiscal bookings, to next the reputation poised [indiscernible] a

are revenue that and the term. confident stronger will emerge profitability with we We over long

a over detailed to of call review let financial me Now David for results. the more turn the Miller

Ronnie. Thanks,

Fiscal as Ronnie by challenging was As XXXX mentioned, results. evidenced our financial

stock line of we approximately a to top with disposal the in our on $X.X loss or a $X revenue a a million On from saw basis, years, at million, and $X.X contraction GAAP loss, time loss fiscal for For compared million, XXXX XXXX. for $X.X in a a the million year was in X%, net loss the comp million noncash of of larger Included in coming depreciation included operations our to million $XX in representing expenses $X.X totaling year. loss first many decline which year-over-year equipment. approximately our leading

noncash adjusted an of adjusted XXXX period. at million loss ago items, was our to $X.X these loss in the compared Excluding for $X.X year million

the the in financial Turning quarter We the the quarter. signs and to rebound of focus cash-based awaited began fourth the fourth see results. to long

period. million to X%. $XX or the year Our of $XX.X ago in increase $XXX,XXX revenue An increased compared million to

was in EBITDA $XXX,XXX $XXX,XXX of compared adjusted QX to an adjusted approximately of XXXX. Our loss

fourth teams to indicative last improve rightsize relatively million sales million base. revenue our efficiencies in quarter higher $X to and cost that cost Total The X%. was million on the of a unchanged of growing $X.X our costs is to operational was sales of taken on leverage revenue an $X.X compared measures increase year, approximately of our

was sales million ago, X% $XX.X year of $XX.X to a Cost year, the a increase. For million compared similar representing

repeat total of relative to work year, related inefficiencies. Although the sales cost component due unchanged variable costs other revenue to sales and mostly to were of -- was total although expenses cost the our for high our

improvement in year. We quarter the this last full the to future to guiding is margin we had margin [ reflective For of quarter's as services expanded that but QX, XX% pressure more year. during XX% for been under would gross be delivered the pharmacology compared are fourth margins ] to compared XX% results confident XXXX,

manage and growth maintaining efforts. both attributed R&D For support million spend to million ago fourth $XX.X to quarter, for XXXX. strategy in the and quarter our target was R&D fourth fiscal the compared to while was in decline for strategically the R&D discovery more the compared $X.X ability to million And $X.X future R&D year $X the to was our stated expense for period. sustain approximately year, expense million our The year-over-year

and last expense $X.X remaining relatively compared was unchanged full quarter, marketing Similarly fourth was $X.X the million the year. expense million, the to to year. million For year $X.X prior Sales unchanged,

to expense costs, was year, year G&A fees. for compared to an $X.X $X.X the million for offset primarily G&A Average the ago million This fourth quarter to And in fourth million in was compared year. by reduction the a expense $X.X increase period. quarter in the million compensation-related $X.X for professional last IT due was and

ahead a total reducing we Looking as anticipate G&A while mostly flat, keeping year revenue. percentage of XXXX, to fiscal

no We cash. debt. cash of year turning Now and the ended million sheet balance on to with $X.X the

For the activities in quarter, $X.X cash used million. operating was

a anticipate cash year fiscal neutral the XXXX, few quarters. over position generally next maintaining we to ahead Looking

term. cash balance line long We results, expect that monitoring with will improving and position cash bottom are carefully our over managing and the rebound our

improve margins. significant and We of to made the automate functions do as in Ex and course efficiencies, ] not us increase anticipate revenue have prior investments expand lab to CapEx our capacity Vivo increase already to year over our [ platform the and periods been our other allowing

our this than although obstacles call. were In we XXXX we're to not expected summation, on financial impacted -- unexpected delivering, were results, accustomed outlined as the multiple by weaker

company. that long-term as setback, evidenced the feel from our we're despite in by emerging quarter for downturn, confident results, we prospects the and slowly However, fourth we're the the

going focused to line of the this to of to growth forward on ahead first the bottom to to we're coming half in first an message be decline prospects we that results the the revenue our profitability improving are reiterate XXXX. half expectation compared XXXX, of and financial look and quarters. with results I year, the have want long-term positive, despite in past Looking the

should turnaround results. when we our quarter our which quick approximately a first in X time report for weeks have next call, We'll be

open to now call will questions. the We

Instructions]. question We coming from did Hewitt in a queue have [Operator Matt from Craig-Hallum.

some macro if Maybe the to environment or in finally on last improving business on maybe situation. projects that implemented? even of QX like dig had in a either some held off later quarters the funding improving sounds of of for delayed was that funding things you that in been pharma had was received what a bit you starting getting curious biotech? are maybe It here just couple QX, more little a because bit. function that QX new this be I'm or and the are Or saw early to and little

Yes.

more that seeing Matt, XXXX, pharma better an we're compared generation, necessarily discussions with we're to seeing think, it in and definitely I opening last but the back say wouldn't I way it's biotech. to seeing year. certainly we're was opportunity

a areas respect. positive of there's lot So that in

a the in different say would accumulation we bunch that I trend see factors. of QX that is an to of started

was, one in a little a just I of cancellations. the bit think decrease

think just able was it work working it's attributed partially just we've done. said to into gear to of while, you that for And efficiencies our two, really getting stuff think getting just the some of up. I being I opening us things on and a operational been what and -- complete

combination it was of a things. I different of a think just So bunch

perspective. last a things half last to we things operationally I year an think had the the commercially do decided of one marketing got from improve say, and -- to and I year organization, a and both over things got when tighter, shall tighter as we when

better. I think we to just had become

And so year. a in fiscal now good this and I us really to are go think forward those of place gives things in a position lot

parse XXX% I it's getting So it's of combination back on just out sometimes to think factors. attributing track? hard a those to what's

just stages in [ more been have the want deals You're of you now across as improvements you what getting more then implemented? seeing conversion, of And implemented you the it's go of -- into And we those? be maybe those helpful. couple of mentioned faster That's color little the the could it. function drive a ] operational Got now are? basically bit that to they revenue benefits you've are transom? early times to a improvements to and Or a where

Yes.

I think couple the we in of certainly, spurt growth I had every years. evolution, rapid a think fairly over last organizational

are think think better shape I management fundamental where what a just of growth in just the I to some us. get combination sometimes the right a of And company. that's needing point place. in bit little the with in not happened to the That, get operations you to for

biological system. a getting So studies couple there Remember, were deal terms a in just of of with done. we issues

take So in little things But management both a process just technological areas. that used a think all than others. and sometimes from just perspective, we a perspective opportunity longer a I upgrade perspective, to

more things that level. more to making able level to get next and scalable, to to be the efficient, bump So up next

we years, of an and certainly to in that seen a operational perspective So very had just that to more we to that about become more comfortable feel get feel we going the efficient, more we -- very on reliable, the made now that back changes lot we're comfortable on. kind margins of scalable, prior and in

pharma? are Got remarks, putting what or you coming large percentage your emphasis revenues you're big it. large more you've of your on prepared focus that Do increased, little your from know mentioned your customers. In pharma pharma, you a

That's for David, it the changes because all time.

you today? David, have [indiscernible] do So the

call sure. and middle. time. estimate, the and top remained customers. Tier Rough we've evenly in change B the being the Tier We're somewhere it's the years, pretty A A, all distributed the approximately being new XX% top-tier C. pharma, yes, pretty Tier It over from and B Tier we being C -- Yes, the what does actually biotech,

I pretty much our coming But of see over And So would starting into so, over customers. relatively of we've larger an years. many the opportunities top to or emphasis think year had been distributed terms of say, we've getting the been deeper evenly some them. -- we're -- from tier I more we've last in

customers that and So coming that, hold, starting over -- take think the have will see anticipate maybe to skew top-tier that revenue we a the conversion year. the that we we towards

maybe back growth That's to growth Or can that's were like queue. historical get more first Got you for Do take growth, back then look when maybe fantastic the get going it. growth little for QX corner you're you the hop half. obviously, forecasting point? sounds time a the then we've you the -- to in to when feel And returned you the at It or bit in some you to longer? turned year. back but one levels? only I'll first -- And in not this do at, But here news. projecting a and think you your like

Yes.

that it's right for figure have ball what's out now a us we're out still I a think because to crystal happening hard on little externally. there to trying that

very feel there that to gotten very We confident confident we So feel back that is growth. profitability. we've

where still to a historical see something need the shake The markets more at, that and growth that's time we question how about little things out. are

that's we growth those should hopefully, get market to. for on a given two and of better how haven't effect, lot we idea that or when have is we've a So higher over accustomed been guidance turning taking to really quarter are we around, get our upgrades why a But the lot we whether can of next our how up rates back a sense that. this changes

were would back [Operator for at there Dr. the I hand lines to now Morris time. from Ronnie no Instructions]. to questions the like other closing this And call remarks.

is Thank at call. to very you. where We're the is cautiously and good about business now everybody, excited us BioTech right We for earnings world quarterly back profitability. optimistic about for get to feel Thank where our you, the joining going.

with weeks. our approximately them speaking look results forward X give QX everybody, in So to that, we to to

a have joining everybody. for So evening, Thank you us. good

you. conclude Thank This today's does conference.

lines for at Thank your participation. your disconnect time. may You this you