Cryoport, Inc. Q4 FY2025 Earnings Call

Good afternoon, and welcome to Cryoport's Fourth Quarter and Full Year 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 fourth quarter and full year 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 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 type of 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. We have a great report for you today, ladies and gentlemen. But before we begin, 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. Today, we reported our full year results for 2025, which was a year of strong progress for Cryoport. We delivered full year revenue from continuing operations of $176.2 million, exceeding the high end of our prior guidance and reflecting continued momentum across our core markets. In the fourth quarter, we again achieved double-digit revenue growth driven by expanding commercial cell and gene therapy activity and revenue from the support of commercial cell and gene therapy increasing 29% year-over-year to a record $33.4 million for the year. Commercial cell and gene therapy revenue in the fourth quarter represented 20% of our overall revenue, while clinical trial revenue remained solid, growing 14% year-over-year to $47.1 million. We concluded 2025, supporting a record 760 clinical trials and 20 commercial therapies worldwide. Our clinical trial support showed a net increase of 59 over the previous year and represented approximately 70% of total trials for the cell and gene therapy industry. Looking ahead to 2026, based on the information that we have, we anticipate another 13 BLA or MAA application filings, including 2 of which have already been filed, 9 new therapy approvals and an additional 2 approvals for label or geographic expansion. In the near term, Cryoport has 3 customers that are anticipating new therapy approval decisions in March and April of this year. We believe our clinical trial pipeline is spring loaded with 86 clinical trials in Phase III and 361 clinical trials in Phase II. Remember, most of the cell therapies that were approved today were from Phase II. In our opinion, this market-leading base will drive the growth of our commercial revenue in the near and long-term. We continue to execute on our mission of expanding services to the life sciences by broadening our revenue streams and capturing more revenue per client. For 2025, revenue from our Life Sciences Services segment increased 18% year-over-year, including 22% growth in BioStorage/BioServices revenue. Our performance reflects the expanding scale and scope of the clinical and commercial programs we support and the trust our customers place in our comprehensive end-to-end supply chain solutions. While our primary focus remains on accelerating revenue growth and strengthening our market position, we continue to enhance our operational discipline across the organization, as we advance on our pathway to profitability. In 2025, our cost reduction initiatives contributed to our gross margin of 47%, accompanied by a $12 million year-over-year improvement in adjusted EBITDA. With our progress to date, we anticipate achieving positive adjusted EBITDA in the second half of 2026. Turning to our Life Sciences Products segment. Revenue grew 7% year-over-year in 2025. MVE Biological Solutions focused on execution and innovation and continues to further enhance its position as the global leader in the production of high-quality cryogenic systems. Recently, MVE launched its integrated condition monitoring solutions for its dry vapor shippers. These novel condition monitoring solutions are integrated with each door, combining MVE's trusted cryogenic systems with advanced real-time conditioning monitoring technology supplied by Tec4Med, another Cryoport company. This system communicates with MVE's new Cryoverse, a cloud-based data capture and shipment management system. More recently, MVE launched its Fusion 800 Series, a revolutionary self-sustaining cryogenic freezer that can fit through a single door, which opens up substantial market opportunities. These revolutionary cryogenic freezers eliminate the need for continuous liquid nitrogen supply, delivering exceptional reliability, safety, and sustainability in a compact footprint designed for settings where there is limited space and no readily available sources of liquid nitrogen. At Cryoport Systems, we increased our internal investments to support the traction that we are seeing across our broad portfolio of cell and gene therapy clients. These strategic investments include the completion of our Global Supply Chain Center in Paris, France, the expansion of our Belgian operations to accommodate a key commercial client, and continuing the build-out of a Global Supply Chain Center in Santa Ana, California, which consolidates 3 existing facilities into a single expanded campus and enhances our service capabilities. Of course, one topic of the day is AI, and it is certainly a tool we are embracing. As a part of our overall digital strategy, we are actively leveraging generative AI to enhance internal workflows and day-to-day operations. Our focus is on enabling employees to use secure enterprise-approved generative AI tools to reduce manual tasks, accelerate execution, and improve accuracy and consistency of outcomes. These focused efforts emphasize practical adoption through education, hands-on support, and real production use cases tied directly to current business needs. There's no doubt that AI is reshaping our business and will play a significant role in our future. In 2025, we reported a strategic partnership with the DHL Group, which included DHL's acquisition of CRYOPDP. This action was completed in the second quarter of 2025 and provided Cryoport with a substantial capital infusion. Over time, we expect this relationship to enhance our position in APAC and EMEA regions and strengthen our competitive industry profile by leveraging the global scale and capabilities of this key strategic partner. As part of our continuing strategic initiatives to embed our market-leading solutions in the cell and gene therapy ecosystem and improve our growth trajectory, we expanded our global partnerships by entering into strategic collaborations with Cardinal Health and Parexel. Both companies are leveraging Cryoport Systems' supply chain solutions in support of their complementary offerings in the cell and gene therapy space. These partnerships reinforce our position as a market leader in this space and the industry's drive to standardize. As we enter 2026 and consider global macro puts and takes, we believe that our full year revenue guidance of $190 million to $194 million is an appropriate starting point for the year. On a second point, we anticipate achieving positive adjusted EBITDA in the second half of 2026. There's a lot coming into focus for us, and we are very excited about our prospects for 2026 and intend to capitalize on our current momentum, leadership position as the only pure-play temperature-controlled supply chain integrated platform supporting the life sciences industry's largest portfolio of clinical and commercial cell and gene therapies. This concludes my remarks, and I now will turn the call over to the operator to open the lines for your questions and our discussion.

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

So first one, Jerry, or maybe for Robert. The guide that you have high single-digit, nearly 9% at the midpoint for the year could you elaborate a bit more on that? And in terms of the segments, how should we think about the growth in biologics and the services and the MVE? And given the commercial momentum, commercial therapy momentum that you're seeing, how should we think about that growth for the full year? And I have a follow-up.

Okay. There are several questions in your request, Puneet. I'd like to start addressing those questions. Your first question is about how we feel regarding the growth of cell and gene therapy for 2026, correct?

Yes. Well, on the commercial side, I mean, what's your growth expectation for commercial therapies? And then also, if you can provide more color on the segments, each of the segments, the BioLogistics, BioStorage, and the MVE?

I'm going to begin with the last question first and hand it over to Mark because he has insight on this topic. We anticipate ongoing progress with our current customers and expect to introduce other commercial therapies throughout the year. It does take time for these to ramp up, but they will have some effect. Additionally, some therapies we have already implemented will continue to have an impact. Mark can mention some specifics, but we usually refrain from commenting directly on our customers' businesses. So, let me pass it to Mark to address the remaining points.

Yes. So Puneet, obviously, we typically don't furnish guidance on composition by type. We did increase our commercial revenue by 29% in 2025, and it's now eclipsing 20% of our overall revenue. Looking at '26, we do expect to have another good year in '26, although we haven't disclosed the percentages associated with the commercial revenue at this point.

Puneet, there is no doubt that commercial therapy will drive our future. It is the fastest-growing market. As I mentioned earlier, we're forecasting nine new therapies in 2026, and we expect to file 11 BLA/MAA submissions. As I stated in my earlier comments, we believe we're well-prepared. We have 86 trials in Phase III and 391 in Phase II. Therefore, we are positioned for a promising future. Even if half of those in Phase III are approved, it will be great for us.

Maybe just to add to it, we've grown in all of our service lines, and we've grown on our product side as well. We expect to continue to see growth really in all of our product lines and service lines. We always talked about services growing double-digit, obviously, commercial therapy being the strong grower within that. And then on the product side, single-digit growth, mid-single-digit growth, potentially high single-digit growth depending on how the demand is coming back.

Regarding your second question, Puneet, if I've overlooked anything, feel free to let me know. About BioStorage/BioServices, it grew by 22% this past year, which we are very pleased about, and we anticipate further growth. In fact, we are confident that growth will accelerate, driven by cell therapy approvals. The future looks promising for BioStorage/BioServices. Please proceed with the third part of your question, Puneet.

Yes. Regarding the MVE segment, I believe you had 2% growth in the quarter. Please correct me if I'm mistaken. How should we analyze that?

Yes, we were up 7% for the year, and MVE is performing well. We aim to create innovative solutions throughout the company to ensure progress. MVE has launched the integrated monitoring systems I mentioned earlier, but what's equally significant are the developments that will be introduced this quarter. Additionally, we've introduced the Cryoverse, and MVE will be adding new services to enhance its product offerings. It's important to note that the Fusion 800 opens up a substantial new market for us, particularly because many facilities situated on second floors in various countries struggle to accommodate large freezers. This new product will appeal to hospital pharmacies as we advance and as allogeneic therapies continue to be developed.

Super. Can you provide any clarification on Q1? I would like to know if there are any flight cancellations or disruptions from geopolitical issues that you are anticipating in Q1.

There's nothing that we're expecting in terms of cancellations. And today, there's been minimal impact on us. So nothing to report there at this time.

Got it. And then color on Q1?

Yes, we've had a solid start to Q1, Puneet. We're not expecting a light one like some other life science companies are.

Your next question comes from the line of Anna Snopkowski from KeyBanc Capital Markets.

Congrats on a great quarter and a nice guide for '26. So maybe to start, you mentioned in your prepared remarks that total biopharma funding and CGT funding, in particular, saw the strongest funding month in December in the past 4 years, I believe. So I was wondering what the usual lag is between the funding environment and maybe your customer conversations or orders? And then a quick follow-up.

Yes. So obviously, funding is dependent on the client. But on average, you'll typically see that kick in after about a half a year time frame. Some may be a little bit quicker, some may be a little bit slower, but it's a good average for you to consider.

Perfect. Then maybe just touching on the margin side of things. You mentioned that you expect positive adjusted EBITDA, I think, in the second half of '26. So could you just outline how you expect to get there and what operational or cost reduction milestones need to happen in order to achieve this?

Yes. It's really less about cost reduction milestones. You may recall in '24, early '25, we did take some initiatives and operational initiatives to drive improvements, and that was quite successful where we improved adjusted EBITDA of about $12 million year-over-year. We are starting to invest in specific growth initiatives, and completing some of the initiatives that we commenced in 2025, in setting up our Global Supply Chain Center in Paris, and setting up our Global Supply Chain Center in California, which we're going to consolidate 3 locations and expand our footprint there to include BioService and IntegriCell. We obviously have a lot of insight with our client base. If you kind of step back and look at how we're positioned, it's really an unmatched positioning. We serve about 70% of clinical trials, have a record 670 clinical trials, and we support 20 commercially approved therapies for which a majority are cell therapies. So we have a lot of insight as to what's to come. We've been very successful in expanding our service offerings into BioServices, where we've seen strong growth. And so that expected growth, together with some of the efficiencies that we've identified will really drive the further margin improvement.

I want to address the shift of our adjusted EBITDA positive numbers beyond the end of 2025. One key aspect is the specific requests from clients to accelerate certain business opportunities. A prime example is our site in Belgium, where we rapidly established GMP-compliant sterile kitting services for a large commercial account. That site is now operational and generating revenue, which we anticipate will increase significantly over the next few years. We need to stay opportunistic with these types of opportunities, as they will contribute to the organization's long-term benefits.

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

Within the 2026 guidance, can you speak to what you expect from the macro environment or at the low end and the high end of your revenue guidance range?

The macro environment is quite volatile, but the specific markets we're focusing on have been progressing well despite some regulatory and environmental challenges. We've seen a record year-over-year increase in clinical trials and strong interest in our services. There is definitely a chance to exceed our guidance if we notice acceleration sooner. The downside risk is similar to what other companies face, mainly due to uncertainties. However, we have not identified any specific risks at this time and are comfortable with the guidance we're providing.

As a follow-up, you discussed the outlook for FDA approvals, but what is assumed in the guidance for animal health and reproductive health growth contributions?

Yes. We don't usually disclose our segmentation by product segment, so I'm not sure about that, and it’s not something we typically outline.

Yes, we are experiencing moderate growth. The primary growth drivers for our business are clearly in the cell and gene therapy space, especially on the services side. Within that area, the key growth factor is the continued advancement of commercial cell therapies. There have been several developments, including the removal of the REMS requirement in 2025, which has led to our clients accelerating their therapies into the outpatient setting. This is a significant shift that suggests a greater number of patients will be treated, ultimately translating to increased revenue for us.

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

Just two for me. I wanted to follow-up on some of the comments earlier about product growth. I think last quarter, you were kind of feeling good about high single digits for '26. It sounds like you might be thinking more around mid-single-digit growth for the year. So can you just give an update on MVE, the pipeline, the outlook there? Like was there any incremental softening since last quarter? Is that just kind of conservatism baked in?

David, I think that we pretty much addressed that we thought that we think our guidance is a good starting point for the year. There are a lot of macro risk out there, and we did assess those. And so our starting point for our guidance is that $190 million to $194 million, and we think it's a good starting point. MVE continues to work on a stabilized basis. It's got a great forecast to budget for 2026, and it has innovation coming out of it on a constant basis now. So we think MVE is in good condition, but we're not forecasting growth more than the higher single digits, 7% to 8%.

Okay. And then I wanted to follow-up on some of the partnerships. Obviously, DHL, I guess, can you give an update there? Like is everything fully integrated and at a point where you can start to really see the benefits come through? And then you also mentioned Cardinal and Parexel. Can you just double-click there, like frame those and...

Yes. Let me start with DHL. DHL is a large organization with 600,000 employees worldwide, which means it takes time for them to mobilize. They can't operate as quickly as we do, so developing our relationship will take time. We're already collaborating on some initiatives, but it will take a while to see the full impact. Regarding MVE and the 7% growth, it's important to remember that our main driver is the commercialization of cell and gene therapies, which will eventually surpass MVE in terms of significance. While MVE is a vital and healthy part of our business, representing 70% of the market, its revenue proportionality will decline as cell and gene therapy advances. Now Mark can provide insight on our partnerships with Cardinal and Parexel.

Yes. So obviously, what we're doing is focused on building out an ecosystem that supports the cell and gene therapy global environment. And one of the key elements of that strategy is to really define very strong partnerships with leading entities in the space that are complementary to what we do, but don't conflict with what we do. And Parexel and Cardinal Health are 2 very good examples of that. So Parexel is a large CRO that really focuses on clinical trial design, FDA advisory services and clinical engagement. And then Cardinal Health is obviously order to cash management, reimbursement, regulatory support and then patient and provider support. And so us working closely with them really allows our mutual client base to have a best-in-class product offering. Folks like Cardinal and Parexel have come to us because we are best-in-class from a supply chain services standpoint. These help drive the industry. And so we're focused on long-term partnerships that help drive standardization and efficiency of the industry over time.

Your next question comes from the line of Mac Etoch from Stephens.

Maybe just one for me. I think you highlighted on your prepared remarks that a large portion of these therapies are getting approved out of Phase II already. And with the FDA officially moving towards like a default 1 pivotal trial, how do you anticipate this change impacting approvals and investments over the near term?

Tom, why don't you take that question?

I was going to let Mark do it.

I heard you say.

All right. Anything that's going to streamline the process, Mac, is a good thing in our view. It's about more patients getting treated on the commercial side. Commercial revenue is higher than clinical revenue because there's typically more addressable patients for a commercial therapy than a clinical trial, but I'll let Mark opine.

Yes. So obviously, I mean, if they follow through with a single pivotal and don't require a follow-up, that's beneficial to us. If they come back and require additional follow-up, then obviously, that may slow things down. But if you combine it with some of the other elements, in particular, the REMS requirement changes, that's going to be a huge driver for us because that really allows us to push into the community care setting and our client base. If you recall, the vast majority of the addressable patient population is still in the community care setting. And so it provides a significant opportunity for upside on the already existing commercial products as well as the new ones that are coming to market.

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

Congratulations on a good quarter. Can you talk about the MVE or product revenue growth in the fourth quarter? It looks like it was up 2% year-over-year. For the year, it was up 7% year-over-year. So it looks like it maybe slowed a little bit in the fourth quarter. Why was that? And what will sort of drive the reacceleration in growth in '26?

David, it's important not to assess MVE systems solely on a quarterly timeframe. The decisions regarding the purchase of cryogenic systems manufactured by MVE are made over time and often involve detailed engineering considerations regarding their installation and intended use. Therefore, it's more effective to evaluate it based on an annual growth rate or a rolling 12-month period if that’s what you prefer. MVE is a robust company, and while the markets are challenging, we are making efforts to stabilize them. If you have anything to add, Robert, please go ahead. But that summarizes the situation.

Yes. To provide a more detailed view of 2025, we have observed market growth and a resurgence in demand for both our cryogenic freezers and cryogenic transportation and dewar products. Regionally, we have noticed an increase in demand across all three regions at different times. This indicates a shift from the trends we saw in 2022 and 2023. Our guidance also reflects an expectation of moderate mid-single-digit growth rates for 2026.

David, I want to remind you of one other thing for your awareness. MVE supplies both Cryoport Systems and Cryogene with products, including cryogenic freezers and dewars. The 7% figure you see for the year is a net number and does not include internal sales. I just wanted to highlight that.

Okay. And then 5 years from now, what percentage of total revenue do you think could be coming from commercial?

We'll follow up on that question later. I can't provide an answer right now as I don't have a forecast for that. There are too many uncertainties for a five-year outlook; five years is a long time in this industry.

Yes, we model everything out, but as we look further into the future, more uncertainties enter our modeling, especially regarding the timing of new product launches and their market adoption. There have been instances where market expectations were for a product to achieve high growth, but it disappointed, or the opposite happened with products that exceeded expectations. The important aspect to consider is the portfolio effect. Our focus is on capturing a significant share of the clinical market and maintaining it through commercial activities and launches. Currently, we are supporting 20 commercial products, and over the past year, our commercial portfolio has shown strong growth in revenue. We also have a positive outlook on our portfolio clients. We have mentioned the possibility of receiving nine more approvals this year, as well as engaging in further geographic and market expansions. As we look to the future, that expansion continues. Many of our Phase II and Phase III programs will receive regulatory decisions in the next three to four years, which could dramatically influence those numbers, assuming we achieve a reasonable return on commercial approvals. Additionally, we need to consider the impact of REMS and community care engagement, which will play a significant role in determining the growth rate. If our partners succeed in penetrating the community care setting, particularly Janssen with the CARVYKTI product, which has reported community care engagement in the mid-30s, increasing to 50%, 60%, or 70% would greatly affect not only the existing commercial products but also those that are newly introduced to the market.

David, I have a few additional comments to make. Building on what Mark mentioned, I believe it’s clear that in the future, revenues from cell and gene therapy will become the primary contributor to our overall revenue. This area will significantly impact our BioLogistics and BioStorage/BioServices as well. In the last quarter, we saw a growth rate of about 23%. Moving forward, as approvals for commercial therapies in cell and gene therapy increase, our growth rate will align more closely with the industry's growth, as the slower-growing segments will represent a smaller portion of our business. It's an interesting question, and while we don't have an exact answer, we have a clear direction for our future. Mark, do you have anything else to add?

Yes. I just want to point out, if you go to Slide 6 in our presentation deck, that will give you some market data that should give you a reasonable understanding of the opportunity associated with our commercial portfolio at this point.

There are no further questions at this time. So I'm going to turn the call back to the management team for closing comments. Please go ahead.

Okay. One second. I wasn't prepared for that. Okay. Well, thank you for your questions. Very good questions and good discussion, and we appreciate those questions. So in summary, we made some significant strides in 2025 with solid results showing full year revenue performance above guidance. Our Life Science Services business segment grew 18% year-over-year, including 22% increase in BioStorage/BioServices revenue and a 29% increase in revenue from commercial cell and gene therapy we support. We concluded 2025, supporting a record 760 clinical trials and 20 commercially approved cell and gene therapies worldwide. Of the 760 clinical trials we support, 86 are in Phase III and 361 in Phase II, creating what we believe is a spring-loaded position to future commercial cell and gene therapy revenue streams. In addition to our financial performance, we continue to advance targeted strategic initiatives, which are designed to strengthen our growth trajectory in 2026 and beyond. Based on our market position and industry insights, we are encouraged by the opportunities ahead, and we will continue to keep you updated on our progress. Thank you for joining us on today's call. We appreciate your continued interest and support and look forward to speaking with you again when we report our first quarter financial results for 2026. We wish you all a good evening.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.