• Revenue: $14.1 million, an increase of 12% from the first quarter of 2024.
• Income from Operations: $1.3 million, compared to a loss of $2.6 million in the prior year.
• Adjusted EBITDA: $2 million, compared to an adjusted loss of $1.7 million in the year-ago period.
• Cost of Sales: $7 million, a decline of 6% from the previous year.
• Gross Margin: Improved to 50%, compared to 40% for the same period last year.
• R&D Expense: $1.5 million, a decline of $1.3 million from the year-ago period.
• Sales and Marketing Expense: $1.6 million, unchanged from the previous year.
• G&A Expense: $1.9 million, a decrease of $400,000 from the year-ago period.
• Cash Position: Ended the quarter with $2.9 million of cash and no debt.
• Cash Generated by Operating Activities: $300,000 for the quarter.

• Warning! GuruFocus has detected 4 Warning Signs with CSBR.

Release Date: September 11, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Champions Oncology Inc (NASDAQ:CSBR) reported a strong revenue quarter, exceeding $14 million, marking a 12% increase from the previous year.
• The company achieved an adjusted EBITDA of $2 million for the quarter, compared to an adjusted loss of $1.7 million in the same period last year.
• Operational efficiencies led to a 6% decline in the cost of sales, improving the gross margin to 50% from 40% in the previous year.
• The company ended the quarter with $2.9 million in cash and no debt, indicating a solid cash position.
• Positive momentum from the previous quarter continued, with improved operational efficiency and scalability leading to expanded profitability.

Negative Points

• Champions Oncology Inc (NASDAQ:CSBR) faced challenges due to external factors such as weakness in the biotech sector and tight capital markets, affecting customer R&D budgets.
• There is expected volatility in revenue and EBITDA over the coming quarters, indicating potential financial instability.
• The funding environment remains tight, posing challenges for raising capital to support and accelerate growth.
• Internally, the company experienced operational issues that led to cost inefficiencies and delays in revenue recognition.
• R&D expenses were strategically reduced, which could impact future growth and innovation if not managed carefully.

Q & A Highlights

Q: Could you provide some insights on what you're hearing from customers, especially regarding the funding environment and any differences between smaller and larger customers? A: Ronnie Morris, CEO: The funding environment is improving compared to a year ago, though it's not back to levels seen a couple of years ago. Smaller biotech firms still face tight conditions, while midsized to larger pharma companies are cutting back but continue to have budgets for essential services like our preclinical offerings. We expect conditions to improve further over the next year.

Q: Have the conversion rates and cancellation rates continued to improve into the first quarter? A: Ronnie Morris, CEO: Yes, both conversion rates have improved, and cancellation rates have decreased, continuing the positive trends observed in the fourth quarter. This has positively impacted our revenue.

Q: With the BIOSECURE Act passing in the House, do you compete with any entities listed in that bill, and could this create opportunities for you? A: Ronnie Morris, CEO: We do compete with some of the entities mentioned in the bill. If they are blocked in the U.S. market, it could potentially benefit us by allowing us to capture additional market share.

Q: Can you comment on the overall financial performance and outlook for the company? A: David Miller, CFO: Our first quarter revenue was $14.1 million, a 12% increase from the previous year. We achieved a GAAP income from operations of $1.3 million, compared to a loss last year. Our adjusted EBITDA was $2 million, reflecting operational efficiencies and improved revenue conversion. We anticipate some volatility but expect to maintain strong financial results.

Q: How is the company managing its cash position and what is the outlook for cash flow? A: David Miller, CFO: We ended the quarter with $2.9 million in cash and no debt. Operating activities generated $300,000 in cash. As our operational results stabilize and improve, we expect a gradual increase in our cash balance, maintaining a solid cash position.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.