Cryoport(CYRX) - 2024 Q2 - Quarterly Results

Cryoport Q2 2024 Financial Results Q2 2024 Highlights & Management Commentary Cryoport reported sequential revenue growth across all businesses, driven by commercial Cell & Gene Therapy, while implementing significant cost reductions and revising full-year 2024 revenue guidance - Revenue from the support of commercial Cell & Gene Therapies increased by 51% year-over-year and 20% sequentially, indicating strong demand[2] - The company is implementing cost reduction initiatives expected to yield approximately $22 million in annualized savings for 2025, aiming for a return to positive adjusted EBITDA in 2025[4] - Full-year 2024 revenue guidance has been updated to a range of $225 million to $235 million, reflecting anticipated sequential growth in Life Sciences Services and continued softness in Life Sciences Products[1][4] - As of June 30, 2024, Cryoport supported a record total of 684 global clinical trials[1] Financial Performance Total revenue for Q2 2024 increased, but a significant impairment loss led to a net loss, with negative Adjusted EBITDA despite a strong cash position Revenue Q2 2024 total revenue increased, driven by Life Sciences Services growth, partially offset by a decline in Life Sciences Products Revenue by Segment (Q2 & H1 2024 vs 2023) | (in thousands) | Q2 2024 (in thousands) | Q2 2023 (in thousands) | % Change | H1 2024 (in thousands) | H1 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Life Sciences Services | $38,040 | $35,204 | 8% | $74,826 | $71,040 | 5% | | BioLogistics Solutions | $34,517 | $32,003 | 8% | $67,775 | $64,608 | 5% | | BioStorage/BioServices | $3,523 | $3,201 | 10% | $7,051 | $6,432 | 10% | | Life Sciences Products | $19,557 | $21,817 | -10% | $37,363 | $48,798 | -23% | | Total Revenue | $57,597 | $57,021 | 1% | $112,189 | $119,838 | -6% | Gross Margin Total gross margin for Q2 2024 slightly improved, with variations across Life Sciences Services and Products segments Gross Margin Performance (Q2 & H1 2024 vs 2023) | Gross Margin | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Gross Margin | 43.7% | 43.4% | 41.9% | 43.2% | | Life Sciences Services | 44.5% | 43.2% | 42.9% | 45.0% | | Life Sciences Products | 42.2% | 43.7% | 39.7% | 40.7% | Operating Costs, Impairment, and Net Loss Operating costs significantly increased in Q2 2024 due to a large impairment loss, resulting in a substantial net loss - Operating costs for Q2 2024 were $104.4 million, a significant increase from $43.1 million in Q2 2023, primarily due to a non-cash impairment loss of $63.8 million related to the write-off of remaining goodwill for MVE Biological Solutions[13] - Excluding the impairment loss, Q2 2024 operating costs were $40.6 million, down from $43.1 million in Q2 2023, reflecting the company's cost reduction initiatives[14] Net Loss Summary (Q2 & H1 2024 vs 2023) | (in millions) | Q2 2024 (in millions) | Q2 2023 (in millions) | H1 2024 (in millions) | H1 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(78.0) | $(18.4) | $(96.9) | $(23.9) | | Net Loss (ex-impairment) | $(14.2) | $(18.4) | $(33.1) | $(23.9) | | Net Loss per Share | $(1.62) | $(0.42) | $(2.05) | $(0.58) | Adjusted EBITDA and Liquidity Adjusted EBITDA remained negative for Q2 2024, while the company maintained a robust cash and short-term investments balance - Adjusted EBITDA was negative $3.8 million for Q2 2024, compared to negative $1.3 million for Q2 2023 For H1 2024, Adjusted EBITDA was negative $11.5 million compared to positive $1.6 million for H1 2023[16] - The company held $427.1 million in cash, cash equivalents, and short-term investments as of June 30, 2024[16] - The Board of Directors authorized a new repurchase program for up to $200 million of the company's common stock and/or convertible senior notes, effective through December 31, 2027[16] Business & Operational Highlights The company expanded its commercial Cell & Gene Therapy portfolio and maintained a robust clinical trial pipeline with anticipated new approvals Commercial Cell & Gene Therapy Progress Revenue from commercially approved Cell & Gene therapies grew significantly, expanding the supported portfolio with new approvals and label expansions - Revenue from commercially approved Cell & Gene therapies grew 51% year-over-year[7] - The total number of supported commercial therapies reached 17 as of August 1, 2024, with recent approvals including ImmunityBio's Anktiva, SanBio's AKUUGO, and Adaptimmune's Tecelra[7] - During Q2, two previously approved therapies received new approvals for earlier lines of treatment, and two others received expanded label approvals, increasing their addressable markets[7] Clinical Trial Pipeline Cryoport continued to support a growing number of global clinical trials, with several new application filings and therapy approvals anticipated Cryoport Supported Clinical Trials by Phase (as of June 30) | Phase | 2023 | 2024 | Net Change | | :--- | :--- | :--- | :--- | | Phase 1 | 273 | 286 | +13 | | Phase 2 | 313 | 322 | +9 | | Phase 3 | 82 | 76 | -6 | | Total | 668 | 684 | +16 | - For the remainder of 2024, the company anticipates up to an additional seven application filings (BLA/MAA), two new therapy approvals, and one additional approval for label/geographic expansion[9] Cost Reduction Initiatives & 2024 Outlook Cryoport implemented a comprehensive cost reduction plan targeting significant annualized savings and revised its full-year 2024 revenue outlook Cost Reduction Initiatives The company implemented substantial FTE reductions and CAPEX deferrals, expecting significant annualized cost savings for 2025 - The company has reduced global Full-Time Equivalents (FTEs) by 101 in Life Sciences Services and 46 in Life Sciences Products[5] - Capital expenditure (CAPEX) reductions and deferrals have been implemented, including delaying new facilities and reprioritizing R&D projects[5] - These initiatives are expected to be fully implemented by the end of 2024 and result in approximately $22 million in annualized cost savings for 2025[4] Full Year 2024 Outlook The company revised its full-year 2024 revenue guidance, anticipating a return to year-over-year growth in the second half Full Year 2024 Revenue Guidance | Metric | Guidance Range (in millions) | | :--- | :--- | | 2024 Revenue | $225 million - $235 million | - The company expects a return to year-over-year revenue growth in the second half of 2024, driven by sequential improvements in Life Sciences Services and new product/service launches[5] Financial Statements & Non-GAAP Reconciliations This section presents unaudited financial statements, including Condensed Consolidated Statements of Operations and Balance Sheets, along with reconciliations of GAAP to non-GAAP measures for enhanced performance insight Condensed Consolidated Statements of Operations The statements detail Q2 2024 revenue, gross margin, a significant impairment loss, and the resulting net loss Condensed Consolidated Statements of Operations (unaudited, in thousands) | | Three Months Ended June 30, (in thousands) | Six Months Ended June 30, (in thousands) | | :--- | :--- | :--- | | | 2024 | 2023 | 2024 | 2023 | | Total revenue | $57,597 | $57,021 | $112,189 | $119,838 | | Gross margin | $25,190 | $24,733 | $46,965 | $51,805 | | Impairment loss | $63,809 | - | $63,809 | - | | Loss from operations | $(79,228) | $(18,332) | $(100,509) | $(28,377) | | Net loss | $(77,989) | $(18,355) | $(96,884) | $(23,929) | | Net loss per share | $(1.62) | $(0.42) | $(2.05) | $(0.58) | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets were $852.3 million, with $427.1 million in cash and investments, and $400.1 million in stockholders' equity Condensed Consolidated Balance Sheet Highlights (unaudited, in thousands) | | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $46,458 | $46,346 | | Short-term investments | $380,684 | $410,409 | | Total current assets | $501,986 | $535,112 | | Goodwill | $52,384 | $108,403 | | Total assets | $852,341 | $957,744 | | Convertible senior notes, net | $355,665 | $378,553 | | Total liabilities | $452,246 | $468,721 | | Total stockholders' equity | $400,095 | $489,023 | Reconciliation of GAAP to Non-GAAP Measures Reconciliation details the adjustments from GAAP net loss to Adjusted EBITDA, including impairment loss, depreciation, and stock-based compensation Reconciliation of GAAP Net Loss to Adjusted EBITDA (unaudited, in thousands) | | Q2 2024 (in thousands) | Q2 2023 (in thousands) | H1 2024 (in thousands) | H1 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | GAAP net loss | $(77,989) | $(18,355) | $(96,884) | $(23,929) | | Impairment loss | $63,809 | — | $63,809 | — | | Depreciation & amortization | $7,558 | $6,723 | $15,027 | $13,127 | | Stock-based compensation | $4,997 | $5,800 | $10,453 | $10,984 | | Other adjustments | $(1,622) | $5,145 | $(2,320) | $3,614 | | Adjusted EBITDA | $(3,838) | $(1,348) | $(11,524) | $1,594 |