Cryoport(CYRX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Cryoport's unaudited condensed consolidated financial statements, highlighting increased net income and total assets due to the CRYOPDP divestiture and improved gross margins ITEM 1. Financial Statements This section details Cryoport's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, with notes on key financial changes Condensed Consolidated Balance Sheets The balance sheets show a significant increase in total assets and stockholders' equity, driven by a substantial rise in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :-------------- | :---------------- | :----- | :------- | | Total Assets | $773,927 | $703,493 | $70,434 | 10.0% | | Total Liabilities | $258,536 | $301,595 | $(43,059) | (14.3%) | | Total Stockholders' Equity | $515,391 | $401,898 | $113,493 | 28.2% | | Cash and cash equivalents | $243,416 | $34,137 | $209,279 | 613.0% | | Current assets held for sale | $0 | $36,251 | $(36,251) | (100.0%) | | Current liabilities held for sale | $0 | $15,435 | $(15,435) | (100.0%) | Unaudited Condensed Consolidated Statements of Operations The statements of operations reflect a substantial turnaround from net loss to net income, primarily due to income from discontinued operations Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $45,454 | $39,709 | $86,494 | $77,000 | | Loss from continuing operations | $(12,014) | $(76,420) | $(18,752) | $(91,455) | | Income (loss) from discontinued operations, net | $117,194 | $(1,569) | $111,951 | $(5,429) | | Net income (loss) | $105,180 | $(77,989) | $93,199 | $(96,884) | | Net income (loss) per share — basic and diluted | $2.05 | $(1.62) | $1.78 | $(2.05) | Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) The statements of comprehensive income show a significant shift from total comprehensive loss to income, aided by other comprehensive income Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $105,180 | $(77,989) | $93,199 | $(96,884) | | Other comprehensive income (loss) | $10,339 | $888 | $15,530 | $(3,124) | | Total comprehensive income (loss) | $115,519 | $(77,101) | $108,729 | $(100,008) | | Foreign currency translation adjustments (H1) | N/A | N/A | $12,154 | $(2,760) | Unaudited Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased significantly, influenced by net income and stock-based compensation, partially offset by common stock repurchases Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Item | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :-------------- | :-------------- | | Total Stockholders' Equity | $515,391 | $400,095 | | Net income (loss) (H1) | $93,199 | $(96,884) | | Stock-based compensation expense (H1) | $6,075 | $10,453 | | Repurchase of common stock (H1) | $(4,260) | $0 | Unaudited Condensed Consolidated Statements of Cash Flows Cash flows show a substantial net increase in cash and cash equivalents, primarily from investing activities, including proceeds from a divested business Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Net cash used in operating activities | $(11,687) | $(11,290) | | Net cash provided by investing activities | $235,961 | $19,766 | | Net cash used in financing activities | $(16,053) | $(8,252) | | Net change in cash and cash equivalents | $198,127 | $112 | | Cash and cash equivalents — end of period | $243,416 | $46,458 | | Proceeds from divested business | $210,239 | $0 | | Repayment of 2025 Convertible Senior Notes | $(14,344) | $0 | | Repurchase of common stock | $(4,259) | $0 | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, business nature, and specific financial items Note 1. Management's Representation and Basis of Presentation This note outlines the basis of presentation for the unaudited interim financial statements, prepared under U.S. GAAP, and notes a reclassification correction - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information, with all necessary adjustments included. Operating results for the current period are not necessarily indicative of the full year[18][19] - A $2.3 million correction was made for the reclassification of Selling, general and administrative expenses associated with the CRYOPDP business disposal to Income (loss) from discontinued operations, net for transaction costs for the six months ended June 30, 2025[20] Note 2. Nature of the Business This note describes Cryoport's core business as a temperature-controlled supply chain provider for Life Sciences and details the strategic divestiture of its CRYOPDP business - Cryoport is a leading global provider of temperature-controlled supply chain solutions for the Life Sciences, with an emphasis on regenerative medicine, supporting biopharmaceutical companies, CDMOs, CROs, developers, and researchers[22] - On June 11, 2025, Cryoport completed the divestiture of its specialty courier CRYOPDP business to DHL for $133.0 million, which included the repayment of approximately $77.2 million of outstanding intercompany loans[22] - The divestiture and strategic partnership with DHL are expected to enhance Cryoport's ability to develop its business, particularly in the EMEA and APAC regions, and to provide differentiated and high-value services aligned with the Company's long-term growth strategy[22] - The CRYOPDP business results were classified as discontinued operations in the condensed consolidated statements of operations and balance sheets for all periods presented due to its strategic shift[23] Note 3. Summary of Significant Accounting Policies This note summarizes Cryoport's significant accounting policies, including foreign currency translation and the impact of recently adopted and unadopted accounting pronouncements - No material changes to the Company's significant accounting policies during the six months ended June 30, 2025, except for those related to discontinued operations[24] - Foreign currency translation adjustments resulted in a $12.2 million gain for the six months ended June 30, 2025, compared to a ($2.8) million loss for the same period in 2024[25] - Recently adopted accounting pronouncements (ASU 2024-02, ASU 2024-01, ASU 2023-07, ASU 2022-03) did not have a significant impact on the consolidated financial statements or disclosures, except for disclosure-only impacts[28][30][31][32] - Several accounting guidance updates have been issued but not yet adopted, including ASU 2025-04, ASU 2025-03, ASU 2024-04, ASU 2024-03, and ASU 2023-09. The company is currently evaluating their potential impact[33][34][35][37][38] Note 4. Revenue, Concentrations and Geographic Information This note provides details on revenue by major type and geographic region, confirming no significant customer concentrations and reporting deferred revenue changes - No single customer accounted for more than 10% of net accounts receivable at June 30, 2025, or December 31, 2024, and no single customer generated over 10% of revenue during the three or six months ended June 30, 2025 and 2024[41][42][43] Revenue by Major Type (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | BioLogistics Solutions | $19,874 | $16,628 | $38,404 | $32,585 | | BioStorage/BioServices | $4,495 | $3,524 | $8,830 | $7,052 | | Life Sciences Services | $24,369 | $20,152 | $47,234 | $39,637 | | Life Sciences Products | $21,085 | $19,557 | $39,260 | $37,363 | | Total revenue | $45,454 | $39,709 | $86,494 | $77,000 | Geographical Revenue by Origin (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $33,237 | $29,420 | $65,432 | $56,110 | | Europe, the Middle East, and Africa (EMEA) | $5,833 | $6,533 | $11,413 | $13,933 | | Asia Pacific (APAC) | $6,384 | $3,756 | $9,649 | $6,957 | | Total revenue | $45,454 | $39,709 | $86,494 | $77,000 | - Deferred revenue increased to $1.7 million at June 30, 2025, from $1.1 million at December 31, 2024[46] Note 5. Net Income (Loss) Per Share This note details the calculation of basic and diluted net income (loss) per share, including the impact of discontinued operations and excluded shares Net Income (Loss) Per Share (Basic and Diluted) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss from continuing operations — basic and diluted | $(0.28) | $(1.59) | $(0.45) | $(1.94) | | Net income (loss) per share from discontinued operations — basic and diluted | $2.33 | $(0.03) | $2.23 | $(0.11) | | Net income (loss) per share — basic and diluted | $2.05 | $(1.62) | $1.78 | $(2.05) | | Weighted average common shares outstanding | 50,257,112 | 49,345,644 | 50,102,918 | 49,182,830 | Shares Excluded from Diluted EPS (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 521,769 | 1,910,321 | 555,018 | 1,575,421 | | Restricted stock units | 1,136,619 | 1,108,779 | 1,136,619 | 1,108,779 | | Series C preferred stock | 6,257,168 | 6,013,015 | 6,257,168 | 6,013,015 | | Conversion of 2026 Senior Notes | 1,583,280 | 3,071,445 | 1,583,280 | 3,071,445 | | Conversion of 2025 Senior Notes | — | 599,954 | — | 599,954 | | Total excluded shares | 9,498,836 | 12,703,514 | 9,532,085 | 12,368,614 | Note 6. Discontinued Operations This note details the divestiture of the CRYOPDP business, its classification as discontinued operations, and its financial impact, including a significant gain on disposal - On June 11, 2025, Cryoport completed the divestiture of its specialty courier CRYOPDP business to DHL for $133.0 million, including the repayment of approximately $77.2 million of outstanding intercompany loans[51] - The transaction represents a strategic shift, leading to the classification of CRYOPDP business results as discontinued operations in the condensed consolidated statements of operations and balance sheets for all periods presented[52] Assets and Liabilities of Discontinued Operations (December 31, 2024, in thousands) | Category | Amount | | :----------------------------------- | :------- | | Total assets of discontinued operations | $106,950 | | Total liabilities of discontinued operations | $23,232 | Income (Loss) from Discontinued Operations (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Life Sciences Services revenue | $15,068 | $17,889 | $32,161 | $35,190 | | Gain on disposal | $116,662 | — | $116,662 | — | | Income (loss) from discontinued operations, net | $117,194 | $(1,569) | $111,951 | $(5,429) | Note 7. Cash, Cash Equivalents and Short-Term Investments This note provides a breakdown of cash, cash equivalents, and short-term investments, including fair value measurements and unrealized gains and losses on available-for-sale securities Cash, Cash Equivalents and Short-Term Investments (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $243,416 | $34,137 | | Short-term investments | $182,559 | $216,460 | | Total | $425,975 | $250,597 | - Available-for-sale investments had a fair value of $84.3 million at June 30, 2025, with $1.2 million in gross unrealized gains. At December 31, 2024, fair value was $118.8 million with $2.9 million in gross unrealized gains[56] - The company had $4.6 million in gross unrealized losses on available-for-sale debt securities at June 30, 2025, primarily due to interest rate increases. Management does not consider these to be other-than-temporarily impaired[59] - Equity investments with readily determinable fair values totaled $98.3 million at June 30, 2025. Net gains of $0.6 million were recognized on equity securities for the six months ended June 30, 2025, compared to net losses of $(1.0) million in the prior year period[61] Note 8. Fair Value Measurements This note explains the three-tier hierarchy for fair value measurements and provides a breakdown of financial instruments by level, including convertible senior notes and contingent consideration - Fair value measurements are based on a three-tier hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable prices corroborated by market data), and Level 3 (unobservable inputs)[62][63][64] Fair Value Measurements (June 30, 2025, in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market mutual fund | $204,477 | $0 | $0 | $204,477 | | Mutual funds | $98,288 | $0 | $0 | $98,288 | | U.S. Treasury notes | $31,505 | $0 | $0 | $31,505 | | Corporate debt securities | $52,766 | $0 | $0 | $52,766 | | Convertible Senior Notes | $0 | $184,504 | $0 | $184,504 | | Contingent consideration | $0 | $0 | $628 | $628 | - The fair value of Convertible Senior Notes is estimated using Level 2 inputs. Contingent consideration is measured using Level 3 inputs, with an aggregate fair value of $0.6 million at June 30, 2025, down from $6.6 million at December 31, 2024[68][69] - Gains of $5.2 million related to contingent consideration were recognized in earnings and reported in operating costs and expenses for the six months ended June 30, 2025[70] Note 9. Inventory This note details the composition of inventory, including raw materials, work-in-process, and finished goods, and their carrying values Inventory Composition (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------- | :-------------- | :---------------- | | Raw materials | $13,842 | $14,616 | | Work-in-process | $797 | $1,116 | | Finished goods | $8,396 | $5,744 | | Total | $23,035 | $21,476 | Note 10. Goodwill and Intangible Assets This note provides carrying values for goodwill and intangible assets, detailing impairment charges and amortization expenses Goodwill Carrying Value (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Goodwill | $122,845 | $124,701 | | Accumulated impairment losses | $(104,132) | $(104,132) | | Total | $18,713 | $20,569 | - An interim impairment assessment as of June 30, 2024, resulted in a $54.6 million impairment charge related to the MVE reporting unit's goodwill due to a sustained decrease in share price and reduced projected operating performance[73] Intangible Assets (June 30, 2025, in thousands) | Item | Gross Amount | Accumulated Amortization | Impairment | Net Carrying Amount | | :---------------------- | :----------- | :----------------------- | :--------- | :------------------ | | Technology | $44,763 | $15,157 | $0 | $29,606 | | Customer relationships | $125,803 | $41,624 | $0 | $84,179 | | Patents and trademarks | $36,823 | $221 | $(8,980) | $27,622 | | Total | $213,341 | $60,506 | $(9,245) | $143,590 | - Amortization expense for intangible assets was $3.1 million for the three months and $6.3 million for the six months ended June 30, 2025, consistent with the prior year[76] - Expected future amortization of intangible assets as of June 30, 2025, is $113.4 million[77] - A $9.0 million impairment charge related to MVE trademarks and a $0.3 million charge for Cell&Co's trade name were recorded as of June 30, 2024[78] Note 11. Convertible Senior Notes This note details the carrying value and maturity of convertible senior notes, including the repayment of 2025 notes and interest expense Convertible Senior Notes Carrying Value (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Principal amount of 2025 Senior Notes | $0 | $14,344 | | Principal amount of 2026 Senior Notes | $186,185 | $186,185 | | Total carrying value, net | $184,504 | $198,217 | - The 2025 Senior Notes matured on June 1, 2025, and the principal amount of $14.3 million was repaid. The 2026 Senior Notes, with a principal amount of $186.2 million, are due in December 2026[79] - Interest expense on Convertible Senior Notes was $0.7 million for Q2 2025 and $1.5 million for H1 2025, down from $1.4 million and $2.8 million, respectively, in the prior year periods[79] - In May 2024, the company repurchased $10.0 million of 2026 Senior Notes for $8.7 million cash, resulting in a $1.2 million gain on extinguishment of debt[80] Note 12. Leases This note provides information on lease costs, weighted-average remaining lease terms, discount rates, and future minimum lease payments for operating and finance leases - Total lease cost for the six months ended June 30, 2025, was $4.4 million, up from $2.8 million in the prior year[83] - Weighted-average remaining lease terms as of June 30, 2025, were 9.3 years for operating leases and 3.3 years for finance leases[84] - Weighted-average discount rates as of June 30, 2025, were 7.1% for operating leases and 8.0% for finance leases[84] Future Minimum Lease Payments (June 30, 2025, in thousands) | Years Ending December 31 | Operating Leases | Finance Leases | | :------------------------- | :--------------- | :------------- | | 2025 (excluding H1) | $3,509 | $256 | | 2026 | $6,299 | $496 | | 2027 | $5,831 | $412 | | 2028 | $5,399 | $281 | | 2029 | $4,910 | $79 | | Thereafter | $32,108 | $13 | | Total future minimum lease payments | $58,056 | $1,537 | Note 13. Commitments and Contingencies This note addresses potential product litigation and indemnification obligations, noting no material adverse effects or liabilities recorded to date - The company may become a party to product litigation in the normal course of business and accrues for open claims based on historical experience and available insurance coverage[86] - The company indemnifies its directors, officers, employees, agents, and lessors for certain claims. Historically, no payments have been obligated or incurred for these indemnities and guarantees, so no liabilities have been recorded[88][89] Note 14. Stockholders' Equity This note details authorized shares, common stock repurchase programs, recent repurchases, and shares reserved for future issuance - The company has 100,000,000 authorized shares of common stock and 2,500,000 undesignated preferred stock, with specific designations for Class A, Class B, and Series C Convertible Preferred Stock[90] - The company has two active repurchase programs: the 2022 Repurchase Program (up to $100.0 million through Dec 31, 2025) and the 2024 Repurchase Program (up to $200.0 million through Dec 31, 2027)[91] - In June 2025, the company purchased 628,217 shares of its common stock for $4.2 million at an average price of $6.76 per share under the Repurchase Programs[95] - As of June 30, 2025, approximately $69.7 million of repurchase authorization remains available under the Repurchase Programs[97] - As of June 30, 2025, approximately 15.2 million shares of common stock were reserved for future issuance upon vesting, conversion, or exercise of stock options, restricted stock units, Senior Notes, and Series C Preferred Stock[98] Note 15. Stock-Based Compensation This note provides assumptions for stock option valuation, details stock-based compensation expense by category, and reports unrecognized compensation expense Stock Option Weighted Average Assumptions (June 30) | Assumption | 2025 | 2024 | | :---------------------- | :--------- | :--------- | | Expected life (years) | 3.7 - 4.8 | 3.8 - 4.9 | | Risk-free interest rate | 4.0% - 4.0% | 4.2% - 4.5% | | Volatility | 74.4% - 82.9% | 68.9% - 70.5% | | Dividend yield | 0% | 0% | Total Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $446 | $680 | $983 | $1,289 | | Selling, general and administrative | $1,407 | $3,201 | $3,724 | $6,849 | | Engineering and development | $192 | $320 | $402 | $729 | | Total | $2,045 | $4,201 | $5,109 | $8,867 | - As of June 30, 2025, unrecognized compensation expense for unvested stock options was $5.7 million (expected to be recognized over 2.0 years) and for unvested restricted stock units was $11.7 million (expected over 2.4 years)[102][103] Note 16. Segment Reporting This note outlines Cryoport's operating segments, aggregated into Life Sciences Services and Life Sciences Products, and reports Adjusted EBITDA for segment performance - Cryoport has two operating segments aggregated under its Life Sciences Services reportable segment (logistics, biostorage, bioservices) and a Life Sciences Products reportable segment (cryogenic systems)[106] - The Chief Executive Officer, as the chief operating decision maker (CODM), uses "Adjusted EBITDA" to measure segment performance, which excludes corporate costs[105][107] Adjusted EBITDA for Reportable Segments (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | | :--------------------- | :------- | :------- | | Life Sciences Services | $(2,538) | $(8,961) | | Life Sciences Products | $7,521 | $5,637 | | Total | $4,983 | $(3,324) | Note 17. Subsequent Events This note discloses common stock repurchases made in July 2025, detailing the number of shares and total cost - In July 2025, the company purchased an additional 371,783 shares of common stock for $2.7 million at an average price of $7.36 per share under its Repurchase Program[110] - Year-to-date through July 31, 2025, total common stock repurchases amounted to 1,000,000 shares for $7.0 million at an average price of $6.98 per share[110] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management discusses Cryoport's financial condition and results, focusing on its life sciences supply chain solutions, the CRYOPDP divestiture's impact, and improved revenue, gross margin, and net income Overview This overview highlights Cryoport's leadership in temperature-controlled life sciences supply chain solutions, its clinical trial support, and the strategic CRYOPDP divestiture - Cryoport is a global leader in temperature-controlled supply chain solutions for the Life Sciences, with an emphasis on regenerative medicine, supporting biopharmaceutical companies, CDMOs, CROs, developers, and researchers[117] - As of June 30, 2025, the company supported 728 clinical trials (82 in Phase 3) and 18 commercial therapies, expecting regenerative medicine advanced therapies to be significant future revenue drivers[119] - On June 11, 2025, Cryoport completed the divestiture of its CRYOPDP business to DHL for $133.0 million, including the repayment of $77.2 million in intercompany loans. This strategic move is expected to enhance business development in EMEA and APAC[123] - Inflationary pressures have impacted gross margins in 2024 and 2023, and could affect future financial performance if not offset by net realized annual price increases and productivity gains[124] Results of Operations (Three months ended June 30, 2025 compared to three months ended June 30, 2024) This section analyzes Cryoport's financial performance for Q2 2025 versus Q2 2024, showing increased revenue, improved gross margin, and a significant shift to net income Revenue Performance (Three Months Ended June 30, in thousands) | Revenue Type | 2025 | 2024 | $ Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- | | Life Sciences Services revenue | $24,369 | $20,152 | $4,217 | 20.9% | | Life Sciences Products revenue | $21,085 | $19,557 | $1,528 | 7.8% | | Total revenue | $45,454 | $39,709 | $5,745 | 14.5% | | Commercial Cell & Gene therapy revenue (BioLogistics) | $7,500 | $5,600 | $1,900 | 33.9% | | Revenue from discontinued operations | $15,885 | $17,889 | $(2,004) | (11.2%) | - Gross margin improved to 47.0% in Q2 2025 from 44.5% in Q2 2024. Life Sciences Services gross margin was 48.9% (vs 46.7% in Q2 2024) and Life Sciences Products gross margin was 44.9% (vs 42.2% in Q2 2024)[129][130][131] - Net income for Q2 2025 was $105.2 million, a significant improvement from a net loss of $(78.0) million in Q2 2024, primarily driven by a $116.7 million gain on the sale of the CRYOPDP business[126][141] - Selling, general and administrative (SG&A) expenses decreased by 1.2%, and Engineering and development expenses decreased by 11.4% in Q2 2025 compared to Q2 2024[132][133] Results of Operations (Six months ended June 30, 2025 compared to six months ended June 30, 2024) This section analyzes Cryoport's financial performance for H1 2025 versus H1 2024, showing increased revenue, improved gross margin, and a significant shift to net income Revenue Performance (Six Months Ended June 30, in thousands) | Revenue Type | 2025 | 2024 | $ Change | % Change | | :-------------------------- | :------- | :------- | :------- | :------- | | Life Sciences Services revenue | $47,234 | $39,637 | $7,597 | 19.2% | | Life Sciences Products revenue | $39,260 | $37,363 | $1,897 | 5.1% | | Total revenue | $86,494 | $77,000 | $9,494 | 12.3% | | Commercial Cell & Gene therapy revenue (BioLogistics) | $14,600 | $11,100 | $3,500 | 31.5% | | Revenue from discontinued operations | $32,978 | $35,189 | $(2,211) | (6.3%) | - Gross margin improved to 46.3% in H1 2025 from 42.5% in H1 2024. Life Sciences Services gross margin was 48.4% (vs 45.1% in H1 2024) and Life Sciences Products gross margin was 43.7% (vs 39.7% in H1 2024)[147][148][149] - Net income for H1 2025 was $93.2 million, a significant improvement from a net loss of $(96.9) million in H1 2024, primarily due to a $116.7 million gain on the sale of the CRYOPDP business and the absence of a $63.8 million impairment loss recorded in H1 2024[143][153][160] - SG&A expenses decreased by 11.3% (driven by decreases in contingent consideration and stock compensation), and Engineering and development expenses decreased by 14.3% in H1 2025 compared to H1 2024[151][152] Non-GAAP Financial Measures This section presents non-GAAP financial measures like Adjusted EBITDA and constant currency revenue, providing supplemental insights into operating performance - Cryoport provides Adjusted EBITDA and revenue at constant currency as supplemental non-GAAP financial measures to offer insights into operating performance and underlying revenue trends, noting they are not substitutes for U.S. GAAP measures[161][163] - Adjusted EBITDA from continuing operations for the six months ended June 30, 2025, was $(3.7) million, an improvement from $(12.2) million in the prior year period[166] - Foreign currency exchange rate fluctuations favorably impacted Q2 2025 revenue by $0.3 million, but had a flat impact on revenue for H1 2025 at constant currency[168] Liquidity and Capital Resources This section discusses Cryoport's liquidity position, including cash, investments, working capital, and cash flow activities, affirming sufficient resources for future operations - As of June 30, 2025, the company had $243.4 million in cash and cash equivalents, $182.6 million in short-term investments, and working capital of $459.3 million[172] - Management believes current cash, short-term investments, and projected cash flows will satisfy operational and capital requirements for at least the next twelve months[173] Cash Flows Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | $ Change | | :----------------------------------- | :------- | :------- | :------- | | Operating activities | $(11,687) | $(11,290) | $(397) | | Investing activities | $235,961 | $19,766 | $216,195 | | Financing activities | $(16,053) | $(8,252) | $(7,801) | | Net increase (decrease) in cash and cash equivalents | $198,127 | $112 | $198,015 | - Net cash provided by investing activities was $236.0 million for H1 2025, primarily due to $210.2 million from the CRYOPDP sale and $36.0 million from short-term investment maturities[176] - Net cash used in financing activities was $16.1 million for H1 2025, mainly due to the repayment of $14.3 million for 2025 Senior Notes and $4.3 million for common stock repurchases[177] - As of June 30, 2025, approximately $69.7 million of repurchase authorization remains available under the company's repurchase programs[183] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Cryoport is exposed to market risks from interest rate changes, foreign currency fluctuations, and investment market values, potentially leading to material gains or losses - The company is exposed to market risk from interest rate changes, foreign currency fluctuations, and changes in the market values of its investments[185] - Interest rate risk primarily relates to the investment portfolio and debt. The fair value of Convertible Senior Notes was $170.7 million as of June 30, 2025[186] - Foreign exchange risk impacts international business, with revenue from international operations (18% of consolidated revenue) increasing by $0.2 million in H1 2025 due to foreign exchange rate fluctuations[187] - A 5%, 10%, or 20% adverse change to foreign exchange rates would result in declines of $1.2 million, $2.3 million, and $4.7 million, respectively, recorded to 'Accumulated other comprehensive income (loss)' for foreign-denominated cash and cash equivalents ($23.4 million at June 30, 2025)[188] - A 5%, 10%, or 20% adverse change to foreign exchange rates would result in losses of $0.7 million, $1.4 million, and $2.7 million, respectively, reported as 'Other income (expense), net' for short-term foreign-denominated intercompany loan balances[189] ITEM 4. Controls and Procedures Cryoport's management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[191] - No changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting[194] PART II. OTHER INFORMATION This section covers other important information including legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits ITEM 1. Legal Proceedings Cryoport is subject to ordinary course legal proceedings but is unaware of any that would materially adversely affect its business, operating results, or cash flows - The company is not aware of any legal proceedings or claims that are believed to have, individually or in the aggregate, a material adverse effect on its business, operating results, or cash flows[195] ITEM 1A. Risk Factors Readers should consider the comprehensive risk factors detailed in the 2024 Annual Report on Form 10-K, as other unknown factors could also significantly impact the business - Readers should carefully consider the risk factors described in Part I, Item 1A, Risk Factors, in the 2024 Annual Report, as these could materially and adversely affect the business, financial condition, and results of operations[196] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities by Cryoport during the quarter ended June 30, 2025 - There were no unregistered sales of equity securities during the quarter ended June 30, 2025[197] ITEM 3. Defaults Upon Senior Securities Cryoport reported no defaults upon senior securities during the quarter ended June 30, 2025 - There were no defaults upon senior securities during the quarter ended June 30, 2025[198] ITEM 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to Cryoport - Mine Safety Disclosures are not applicable[198] ITEM 5. Other Information Cryoport's CEO and a Board member entered trading plans in June 2025 for potential common stock sales from expiring options, not intended to satisfy Rule 10b5-1(c) conditions - Jerrell Shelton, CEO, and Dr. Ramkumar Mandalam, a Board member, entered into trading plans in June 2025 for potential sales of common stock to be acquired upon the exercise of stock options expiring in August 2025[198][199] - These trading plans are not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)[198][199] - No other director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[201] ITEM 6. Exhibits This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley Act certifications and Inline XBRL taxonomy documents - The exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[203] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the Cover Page Interactive Data File are also included as exhibits[203] SIGNATURES The report was duly signed on behalf of Cryoport, Inc. by its President and CEO, and Chief Financial Officer, on August 12, 2025 - The report was signed by Jerrell W. Shelton, President and Chief Executive Officer, and Robert S. Stefanovich, Chief Financial Officer, on August 12, 2025[208]