Good afternoon, and welcome to Cryoport's Third Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded. I will now turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission. As a reminder, Cryoport has uploaded their third quarter 2025 in review document to the main page of the Cryoport Inc. website. This document provides a review of Cryoport's financial and operational performance and a general business outlook. Before I turn the call over to Jerry, please note that because of the strategic partnership that has been established with DHL Group and the related sale of CRYOPDP to DHL, CRYOPDP's financials, which were previously a part of Cryoport's Life Sciences Services reportable segment, are now presented as discontinued operations. Cryoport previously provided quarterly historical information on this basis for fiscal year 2024 and our first quarter 2025 in review document, which remains available on the Cryoport, Inc. website. This information is intended to support the financial modeling efforts of those needing this information. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2025 revenue guidance. It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd, and good afternoon, everyone. With us this afternoon is our Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. During the third quarter, we continued our strong momentum, delivering double-digit growth in both our Life Sciences Services and Life Sciences Product segments. Notably, revenue from our support of commercial cell and gene therapy grew 36% year-over-year to $8.3 million, driven by the continuing global adaptation of these life-saving therapies. It is impressive that the growth of the regenerative therapies market, which we believe is still in a very early stage of development, has remained resilient despite ongoing challenging macroeconomic, political, and geopolitical backdrops. Within Life Sciences, revenue increased 16% year-over-year and represented 55% of our total revenue from continuing operations for the quarter. This included a 21% increase in the BioStorage - Bioservices revenue, underscoring the persistent demand for our integrated platform. Driving this growth is the rising prevalence of chronic and rare diseases, coupled with continued advancements in cell and gene therapies targeting solid tumors and autoimmune diseases. We also are encouraged by signs of stability in our life sciences product market, where revenue grew 15% year-over-year, driven by improved demand for our market-leading cryogenic systems. In the third quarter, we expanded our product portfolio with the launch of MVE Biological Solutions’ next-generation SC4/2V and SC4/3V vapor shippers. These cryogenic systems models have been redesigned, utilizing innovative technologies to offer customers added protection during extended or challenging shipments and include several key advancements designed to enhance the performance and reliability. MVE's newly designed condition monitoring solutions for these doors are integrated with each unit, combining our trusted cryogenic systems with advanced real-time condition monitoring technology supplied by Tacromed, another Cryoport company. These innovations reflect MVE's unwavering commitment to support the life sciences with advanced intelligent connected assets to safeguard vital biological materials. Beyond our core systems and services, we are progressing on a number of other growth initiatives designed to better serve our clients and diversify our revenue streams. These initiatives include the onboarding of our first clients for IntegriCell, our cryopreservation services located in Liege, Belgium, and Houston, Texas. These cryopreservation services are designed to address a critical aspect in optimizing the supply chain for the development and commercialization of cell-based therapies through high-quality standardized cryopreserved starting materials. We're excited by IntegriCell's recent progress as it moves forward to become a significant revenue and profit generator. Additionally, in late October, we opened the logistics portion of Cryoport Systems' new state-of-the-art global supply chain center at the Charles de Gaulle Airport in Paris, France. This 55,000 square foot facility provides us with increased ability to serve our clients in the European and global markets. It is designed to support complex life sciences supply chain needs, including biologistics, bioservices, and future cryopreservation services. An official grand opening is scheduled to celebrate the launch of this facility will be held on November 20, with Bioservices opening in mid-2026. In addition, we are also advancing toward opening a global supply chain center in Santa Ana, California, which is expected to come online in the second half of 2026. This facility will consolidate three existing locations and feature next-generation technology to optimize operations and client support. Complementing all of these activities, we have begun implementing our recently established strategic partnership with DHL Group. Due to DHL's size, this strategic relationship will take some time, and when completed, it will enhance our positioning in the APAC and EMEA regions and reshape our competitive profile within the industry by leveraging DHL's global scale and capabilities. Regenerative medicine has been advancing steadily, largely driven by the expanding pipeline of regenerative therapeutics entering clinical development and commercialization. Despite any short-term headwinds, cell and gene therapies have continued to enter and move through the clinical pipeline, which should ultimately result in growing revenue from commercially supported therapies. Cryoport's temperature control supply chain solutions are supporting the largest portfolio of clinical and commercial gene therapies in the world with a record total of 745 global clinical trials and 83 of these in Phase III, representing approximately 70% of the cell and gene therapy clinical trials. In the third quarter, four BLA MAA filings occurred, and three more were filed in October. For the remainder of 2025, we anticipate up to an additional seven application filings, one new therapy approval, and two additional approvals for label or geographic expansions or moves to earlier lines of treatment. Of course, the timing of these filings may be impacted by the current government shutdown of the FDA in the United States. While global trade conditions remain dynamic, Cryoport did not experience any new material impact from tariffs in the third quarter. Furthermore, we have, of course, taken steps to diversify our supply chain to mitigate potential impacts that could come as a result of tariffs, impacts not covered by these mitigations are covered by surcharges. With the strong momentum we have achieved year-to-date and our progress across the board, we are updating our full-year 2025 outlook for total revenue from continuing operations to the range of $170 million to $174 million. Our team is dedicated to building long-term value for our shareholders. Cryoport is maintaining and growing its competitive differentiators as the only pure-play end-to-end temperature-controlled supply chain platform that supports the largest portfolio of clinical and commercial cell and gene therapies globally. This concludes my remarks. So I'll now ask the operator to open the lines for your questions.

Your first question comes from the line of Kyle Crews from UBS.

Congratulations on the quarter. Maybe just to start, the high end of the guidance implies a sequential decline in revenues. At the same time, you're seeing positive momentum across the entire business. You have an increased number of commercial therapies supported, a higher number of clinical trials, and you've launched new products within MDE. Can you help us reconcile that with the implied sequential decline in guidance? And then for a second question, can you discuss if the recent release of the triple FDA draft guidance is that support making clinical trials easier has resulted in an uptick in clinical trial interest at your company?

Well, you had a lot of questions in there. And I think Robert will start answering your financial questions, and Mark will address your FDA question.

Yes. Look, you're certainly right in terms of how you phrased the question. Given all the macro uncertainties right now, we think it's a responsible guide. It balances the momentum that we are seeing versus the macro conditions, such as the current government shutdown and the ever-changing tariff landscape. I think we've managed it to date very well. And we're obviously, of course, focused on profitable and disciplined growth. If you look at the revenue guidance and the increase in revenue guidance represents about 8% to 11% revenue growth over the prior year from continuing operations. But as you said, at the same time, we continue to be very bullish on our market-leading position. We feel that our long-term growth rate will be close to that of the cell and gene therapy market, as you can see in our Q3 performance, and as more and more commercial therapies come to market. In fact, if you look at our commercial revenue right now, it's already a fairly significant portion of our total revenue. I think it's roughly about 18%, 19% of total revenue. So we're trying to balance those two parts: one, the cautious view on the macro uncertainties, but at the same time, we are very bullish in terms of the outlook and bullish in terms of finishing the year strongly.

Mark, do you want to answer the FDA portion?

Sure. Assuming you're referring to the REMS requirement, is that correct?

No. They recently released three new draft guidances related to clinical trials. Yes.

Yes. So obviously, yes, some of the draft guidance announcements that you're talking about that came out recently, some of them are targeting some generic small molecule programs. Those don't have a significant bearing on our market. Those that are aimed at the orphan markets and those that are focused on driving biologics approvals much more quickly are impactful to us and our clients, and we do believe that those will help drive more activity in the future from a BLA standpoint. Just turning to REMS because I think it's important to understand that one, too. So the REMS requirement, which has also been announced, will have an even more impactful positive impact for us as it will drive the implementation and utilization of cell therapies into the community care setting. And I think if you look at both BMS and J&J's CARVYKTI revenue in Q3, both of them had very strong growth.

Great. And then maybe just one last one. Can you discuss whether you're seeing increasingly different trends within gene therapy and cell therapy within the broader cell and gene therapy market?

Yes. I mean, obviously, there's a little bit of tentativeness around financing in the gene therapy space because of some of the challenges that have been seen, but that doesn't impact the long-term opportunity. And so there are still a lot of new start-ups in the gene therapy space. There's a lot of activity and investment that's going into the gene therapy space. But obviously, the lion's share of funding at this point is still going into the cell therapy side of things. And obviously, with the number of potential approvals moving forward later this year. We've got another potential, as Jerry mentioned in his introductory comments, and potentially another seven filings this year, and potentially even another one new and two supplemental approvals this year. So there's very strong activity in the cell therapy space as well.

Just to round that off, Mark, just would point out in our review piece, we broke down by percentages the clinical trial portfolio that we have. And the number of gene therapies in there is a single-digit percentage, and the number of vaccines is even smaller. It's like 3%. So we're much more exposed to the cell therapy side of the world.

Your next question comes from the line of David Saxon from Needham.

Congrats on another strong quarter here. Maybe, Robert, I'll start with you. I didn't hear anything on EBITDA guidance. I think the expectation is to reach profitability on a quarterly basis sometime this year. So is that still the expectation? And then how should we think about profitability as it relates to 2026? Could you see that on a full-year basis? Or are there any meaningful investments we should be aware of?

Yes. No, thank you. As you can see from our '25 performance to date, the adjusted EBITDA, we improved it by over $10 million for the first nine months, bringing our adjusted EBITDA loss in Q3 to $600,000. So we are getting very, very close to getting and crossing the line to positive adjusted EBITDA. From a cash flow perspective, cash flow from operating activities was positive for the quarter. We had about $2.2 million positive cash flow from operating activities. And we think we can get to positive EBITDA. We're very close to it as early as year-end. That was our target. At the same time, I do want to highlight, we're obviously trying to balance some of the growth initiatives that we have with driving towards solid positive EBITDA. There are some specific client-driven growth initiatives that we have, including the global supply chain center that we're opening in Paris this month, as well as the IntegriCell platform that we started out a while back. And those, in some cases, require some upfront investments. So that's really balancing those two parts, but we're certainly making very strong progress towards that goal. And overall, we like our momentum. We like the positioning that we're in, and our teams are working towards executing on that goal.

David, you've heard us talk about the pathway to profitability before, and we certainly are on that pathway to profitability. And as Robert points out, we're moving toward positive adjusted EBITDA. And so we think possibly we can get there in the fourth quarter and certainly early next year. And that's a surrogate for cash flow. But remember, we have a number of facilities, which I went over in my opening comments. I just mentioned a couple of examples, a number of capital investments are taking place. We know that those are the right capital investments. We vetted them thoroughly. We know that they're the right thing to do for the future. But as we're building those out in today's accounting, it does affect your income statement. So our pathway to profitability includes all the things that Robert said, plus building out those facilities and then starting to experience the operating leverage that comes with getting those facilities up and running and utilized.

Jerry, maybe my second one is for you. Just on product, that growth really improved versus kind of the first half. So maybe talk about what's driving that strength? How much of that is market versus some of those new products you called out, maybe driving some mix benefit? And then in terms of the backlog, I guess, can you talk about that at least qualitatively? And then what level of visibility does that give you into the product growth outlook as we head into 2026?

David, we talked about backlog a lot during the COVID period because we had an extraordinary period. But we don't talk about backlog now as much because we are on a more normal market, which is about a 6- to 8-week lead time. It's no longer 6 months or a year lead time. It's back to the normal, which is about a 6-week lead time. So we do monitor our sales trends. We do monitor our order intake, and that order intake does give us indication that the market is beginning to stabilize. And of course, the government shutdown hasn't helped us there any, but it still continues to go on. It hasn't helped us because it does slow down the government sales that are associated. But so we're doing well in terms of the industry and the stabilization. There was no impact on the new things that I talked about in my comments and opening up. No revenue coming in from that. It wasn't time. It does take time for these things to get out. The two doors that were developed with the integrated condition monitoring at MVE are focused on the animal health business. And so that's a seasonal business, and there will be an uptake there. But we have a number of things going on at MVE. Does that answer your question, David? Or is there other parts to it?

That was very helpful. If I could rephrase, considering how the market has been stable year-to-date, do you think it's reasonable to assume that this trend continues as we look at our models for 2026? Also, with those product launches in the animal health sector and potentially increased demand in other markets, how should we view or how would you assess product growth potential for 2026?

I would look at it with stability and use a very high single-digit growth rate.

Your next question comes from the line of Puneet Souda from Leerink Partners.

Can you provide some insights on the recent exits from cell therapy programs that we're observing? While you are showing strong growth, part of that may be due to comparisons, yet there's also overall market stability that you've mentioned. I'm trying to understand how your situation contrasts with Takeda's departure from allogeneic programs, Galapagos winding down its projects, and Novo divesting its cell therapy assets. Are you noticing any effects from these exits on your pipeline or the overall service demand? Additionally, as Jerry noted, you're anticipating high single-digit growth. Is this expectation sustainable through 2026 and 2027 considering these exits? Also, could you share any context regarding how you plan to replace some of these lost programs?

Yes, Puneet, we're glad you could join the call despite potential conflicts. Let me begin, and then Mark will provide additional insights. Regarding the 9% growth, which I mentioned as high single digits, it relates specifically to the MVE product segment while you also included products and services. In the service segment, where Galapagos is involved along with other activities you've referenced, these fluctuations are typical. It's important to recognize that investments can vary; sometimes they receive ongoing financial support, and other times they don't. There are also instances of rationalizing decisions where we lack visibility. What we do know is that we are continuing to expand and experiencing strength in our operations, evidenced by an increase in the clinical trials we support, with 83 currently in Phase III. We are performing well and are optimistic about the market's resilience. This science is transformative and will redefine global medical practice, though it requires time to mature. Despite facing some challenges, we remain strong and are committed to ongoing growth. Would you like to add anything to that?

I think you answered it pretty well. The only thing I would just add is Jerry is right. I mean, I think some of the changes that you mentioned are really strategic portfolio decisions. I don't think they're market-driven decisions. There's also other companies that are putting a lot more money into and expanding their programs from a top 5 pharma standpoint. So we don't have a level of concern around that. As Jerry had mentioned, very strong pipeline activity, very strong activity from a regulatory standpoint. As we had mentioned, upwards of another seven filings this year, upwards of potentially another 25 filings next year. So there's a lot of activity in the space, which will continue to expand the number of commercialized therapies and the revenue associated with those therapies as the market matures.

Just to point out, September funding in biopharma was quite strong, and October was the best month of the year so far. We had over 20 IPOs and follow-on offerings of greater than $100 million in October alone. So some of the programs you mentioned are falling off, but certainly other ones are coming in and up and taking the place.

On the government shutdown piece and the implied 4Q guide, I'm just trying to understand how should we think about the segments within the guide for the fourth quarter, Biologistics versus BioStorage, Bioservices versus the MVE Life Sciences product line. Maybe just help us understand how should we think about modeling each of those, if you could provide some segment commentary? And just maybe just if you could pinpoint in the government shutdown exactly, I mean, what are customers telling you? What are some of the worries here if this shutdown extends into December?

On the first part of your question, Puneet, it depends on what you think about the government shutdown. Frankly, the government shutdown is temporary. Right now, you can't make a filing, you can't pay your fees for a filing. But that's going to end soon. It can't go on forever, and there's an election coming up, which I think will motivate a political end to the shutdown. And then we'll see some things open up. We'll see things start to move through, and we'll catch up. So it's not going to last forever. The government shutdown is. And again, under the backdrop we've had, we've shown substantial growth in spite of any headwinds there. Mark, do you have anything to add to that?

Yes, I think you answered it well. I mean, yes, from a service standpoint, we haven't seen any impact other than the delay in filing activity, which they just can't do because they can't pay their application fees. That's the only impact that we've seen is there may be a short-term delay in some of the filing activity, but the service activity still remains very robust. And then just looking at Q4 without going into too much detail, obviously, we expect year-over-year increase on the services side. On the product side, it largely depends on timing, especially if you look at some of the larger freezer orders or even some of the potential delays in government shutdown, that they could just have an impact on timing of whether those are going to come in, in Q4 or be shifted in Q1.

That's because they're capital expenditures and somebody has to sign off on them. Does that help you?

Your next question comes from the line of Matt Stanton from Jefferies.

Maybe one for Mark. Just on the commercial trends, you're tracking up over 30% here year-to-date. It sounds like you saw some approvals here early in the quarter to continue more filings and then I think next year, '25, which is a big number. Can you just talk about the durability of the growth in terms of what you're seeing here from customers? And as we think about that kind of 30% plus, how you feel about that on the commercial side into '26? And I mean, is there opportunity for that to accelerate even further if some of these things kick in on REMS or some of these filings kick in, and to your point earlier, start to get signed off and get out there? But just talk about the kind of growth algorithm on the commercial side.

Yes. I think as you focus, you're going to focus on two things. One is the existing therapies as they mature, they move to earlier line and they go through global expansion. And as we had mentioned earlier, both BMS and Janssen and J&J have come out with very positive comments around growth, and their financial data supports that. Janssen said their goal is 10,000 doses by year-end and 20,000 patients by the end of 2027, which is a substantial increase. And then you have the newer therapies as they launch; they're also expecting significant ramps. Vertex has come out and said they expect to see CASGEVY start to ramp more significantly. And then we have other data on some of these earlier launches, which most of it has come out at or ahead of guidance. So if you take those in addition to the new filing activity, we think it will remain robust in '26 and beyond.

No, no, there's not. But you already really framed it. Yes. I think it's really balancing that and looking at our guidance. Certainly, we have upside potential, no question. But given some of the uncertainties, we felt that that guidance kind of reflects where we stand right now to acknowledge some of those other aspects that we discussed earlier.

Your next question comes from the line of Subbu Nambi from Guggenheim.

You recently announced the Cryoport Systems received ISO certification. Could you speak to what this means in terms of your customer win rate or any competitive dynamics? How meaningful is this?

I want Mark to speak to that. But in addition to that ISO, we've also won an award or two and certainly one that we're proud of, and we did help on that ISO. So Mark, take it away.

Yes. So ISO 21973, which is really around the governing of handling of cell therapy-based materials is what we received that certification in. We are the first entity that has received a formal ISO certification. Others have claimed that they have complied with it, but we actually have received a certification from the ISO governing body related to that. Yes, on a global basis. So what it really does is it reinforces us as the best-in-class and the gold standard as it relates to the management of these therapies on a global basis and reinforces, obviously, the quality paradigm that we have. And I think as you look at our growth as it relates to commercial revenue as well as our clinical trial adds, the market continues to respond very favorably to that as they continue to put a larger share of the overall clinical trial count as well as the commercial activity into our portfolio. So we believe that will be a continued positive influence on decision-making by our clients and sponsors.

You might mention that award that we won also.

Yes, we actually won two awards, CPHI award, which is one of the larger chemical industry awards for excellence of supply chain solutions. And then we also won another one from a biotech agency, which also reinforces that in the quarter. So I think the markets are responding to our platform being best-in-class.

That's great. Any updates you can share on how you're progressing with your China first strategy? What milestones can we expect as we look to growth in that region for you guys?

We have not assumed any growth in China and will not be assuming any growth in 2026. There is no change at the moment. We do have initiatives in progress, but implementing those strategies takes time. We hope that by 2027, there will be some progress. One thing is clear; we cannot overlook China. It is an advanced country with a large population, and it has resources and can adapt quickly. We will continue to work on our strategies for China, but we don’t have any updates to share at this time.

Perfect. And last one for me. Is there a potential for a catch-up heading into 2026, just given the environment is improving, something that you touched on previously?

You're talking about a catch-up in terms of ordering. Just do you anticipate there could be some sort of catch-up orders next year?

I think she's referring to the product side, guys.

Yes. When you talk about the products, I think what we said is it's really stabilizing. I don't think we can speak of that at this point in time. And in general, conceptually, obviously, more and more material is being developed that requires cryogenic storage and MVE being the largest global provider of storage and cryogenic systems. Surely, we will be the first beneficiary of that. But at this point, it's just stabilization of the market that we can see.

Your next question comes from the line of David Larsen from BTIG.

Congratulations on another very good quarter. It looks like the number of clinical trials, the growth rate year-over-year was the highest it's been in like 2.5 years. And just any thoughts on the Big Beautiful Bill Act, reductions in Medicaid enrollment, reductions in exchange enrollment, maybe as high as 10% or 30%. Does that matter or not? Any thoughts on payer mix? Are most people getting cell and gene therapies? Are they covered by commercial plans, not Medicaid and exchanges? Just any thoughts there would be helpful.

Yes. I personally don't think it's much impact at all. The vast majority of therapies, by understanding, are not being covered by public funds. They traditionally are typically private plans that are reimbursement at this point.

Okay. Do you have any concerns about drug pricing related to price caps from the Inflation Reduction Act or limits on rebates for price increases? Has that been discussed at all?

No, cell and gene therapies are exempt from all of that, Dave.

Yes. I was going to say the same thing. As said, yes, I mean, the White House has actually come out in support of cell and gene and their interest in continuing to support it in an aggressive manner. And they are exempt from some of those pricing constraints that the White House is currently working through.

They're also not impacted by any tariff talk either.

Okay. Great. So minimal regulatory risk heading into '26. Fantastic. And then in quarters past, you talked about the growth in the number of clients at these bio storage facilities, I think, in New Jersey and also like allogeneic storage. Any color there in terms of like capacity or number of client growth?

Yes. I mean, we're still continuing to onboard a significant number of clients at those sites, both existing and new clients. And so that rate continues to be very robust as evidenced by the sales data that we put forth publicly. So we anticipate continued growth in the Bioservices area into '26 based on that.

By the way, David, this isn't just a one-time occurrence. It's part of a broader strategy we've implemented. We designed these services to support our clients and to create a more comprehensive solution, as clients generally prefer working with fewer vendors, especially those they can trust. As a result, our clients are starting to engage more with our BioStorage Bioservices operations within Cryoport Systems.

Yes. We're averaging almost two audits a week at this point. So that's obviously a significant volume of new workflow that's coming into the facility.

So you're witnessing a strategy play out right now.

Great. One more quick one. IntegriCell, I get questions on that all the time. Just any more color there would be helpful. It sounds like you're building a new facility. Is that going to support global efforts for IntegriCell? And do you have revenue coming in for that business yet or not? Just any more color would be helpful.

Well, let me start, and Mark can give you more detail. But IntegriCell is another strategic endeavor, and we do have a network in mind, but we are carefully going into the development of IntegriCell. As Mark said earlier, we have revenue coming in at both locations. But I want to see those locations closer to cash flow to positive cash flow before we add other operations. We do have plans for other operations. They will be added. The network will work. All the information that we've gotten so far is very encouraging. And now we're on the uptick by getting customers, clients, and revenue coming through those two facilities. And I'll just turn it to Mark after that.

Yes, Jerry, what he said is completely accurate. We opened those facilities at the end of Q3 last year, and the tech transfer process takes time as it is part of production. There are regulatory activities that need to occur for adoption. However, we have completed our first tech transfers from both biotech and top 10 pharma, and we have started generating revenue from both locations, in Belgium and Houston, Texas. We expect revenue to increase modestly in 2026, with a significant rise after that.

Your next question comes from the line of Mason Carrico from Stephens Inc.

Robert, maybe just a quick one on margins. Just as this new facility comes online, can you just walk us through how the startup costs and the ramp and timing have been factored into your model and just how you expect that to influence margins over the next few quarters?

It's a great question and reflects the balancing act we're managing. You are correct that we have new facilities coming online. One of these is a Global Supply Chain Center in Paris located near the Charles de Gaulle Airport, which will officially open in a few weeks. Simultaneously, we are experiencing operational efficiencies at our existing facilities, which helped us achieve gross margins of 48%, and even higher on the service side. While we typically incur startup costs that affect our SG&A expenses, the new facilities will also impact our margins as they ramp up revenue over time. We are seeing higher margins from existing facilities, but the new ones will initially exert some downward pressure on margins. Looking ahead to 2026 and 2027, it will be crucial to leverage our existing global infrastructure to enhance our gross margins. Our goal is to reach overall gross margins of 55% and an EBITDA margin of 30%. Although we still have some time before achieving our gross margin target, we expect to see the benefits of operational leverage emerge later in 2026.

Appreciate that. And just touching on those long-term margins. Can you just highlight your thinking in terms of timing around those as well? I know it's been a longer-dated proposition. I just kind of want to get your updated thoughts there.

We are not providing guidance at this time because the cell and gene therapy market is still relatively new in terms of therapy commercialization. We want to observe more progress and additional therapies being introduced to the market. However, we are clearly progressing on this path, as indicated by the significant improvements in adjusted EBITDA, and we plan to continue this trajectory into 2026 and 2027.

There are no further questions at this time. Turning over back to Jerrell Shelton, your line.

Well, thank you very much, and thank you for your questions and our discussions. In closing, in the third quarter, we continued to see strong momentum in our business. This included double-digit revenue growth in both our core business segments. Our Life Sciences Services segment, the key driver of our future growth, grew 16% year-over-year, driven by a 21% increase in BioStorage Bioservices revenue and a 36% increase in commercial cell and gene therapy support. We also continue to see further steadiness in our Life Science product business, where revenue grew 15% for the quarter. Cryoport is positioned as the critical temperature-controlled supply chain company supporting the life sciences that derisks the end-to-end delivery of cell and gene therapies worldwide. Thank you for joining us today. We appreciate your continued support and interest in our company and look forward to speaking with you again when we report our fourth quarter and our full-year financial results.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect.