Cryoport, Inc. (CYRX) Q2 2026 Earnings Call Transcript

Good afternoon, everybody. Welcome to the CryoPort Second Quarter 2026 Earnings Conference Call. At this time, all lines are in listening mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6, 2026. I will now turn the conference call over to Mr. Todd Frommer 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 the 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 items 1a risk factors and elsewhere in our annual report on form 10k filed with the securities and exchange commission and those described from time to time in other reports which we file with the securities and exchange commission as a reminder cryoport has uploaded their second quarter 2026 in review document to the main page of their 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 in June of 2025, CryoPDP's financials, which were previously a part of CryoPort's Life Science Services reportable segment, are now presented as discontinued operations. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2026 revenue guidance. It is now my pleasure to turn the call over to Mr. Gerald Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd. Good afternoon, everyone. With me today is our Chief Financial Officer, Robert Stavanovich, our Chief Scientific Officer, Dr. Mark Sawicki, and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. We're pleased to report that our revenue momentum over the past several periods continued into the second quarter, with our total revenue reaching $49 million. Our growth was led by Life Science Services segment, where revenue grew 15% year over year, driven by 25% growth in biostorage bioservices. Total revenue from the support of commercial cell and gene therapy grew 9% to $9.4 million. However, the services portion of our commercial cell and gene therapies revenue grew 26% year over year as the number of patients treated in community settings and on an outpatient basis continues to ramp. Total revenue from supporting cell and gene therapy clinical trials increased 12% to $13.4 million for the quarter as our clients' clinical pipelines advanced and further matured. For the quarter, life science services revenue represented 57% of our total revenue. In the second quarter, the number of commercial cell and gene therapies we support increased to 22. As our client, Orca Bio, received FDA approval for TREG-Z, at quarter end, our total clinical trial count was 779 clinical trials globally, a net increase of 51 clinical trials over the prior year, with 94 of them in Phase 3. Currently, we support approximately 70% of the cell and gene therapy industry's clinical trials We believe this commanding position will enable us to drive further commercial growth as our therapies receive regulatory approval. Based on the information we have today for the balance of 2026, we expect another 11 possible VLA-MAA application filings, five additional new therapy approvals, and one additional approval for a label and or geographic expansion. Our continued growth reflects the value of Cryoport's integrated end-to-end platform across the life sciences ecosystem, as well as the growing adoption of cell and gene therapies. During the quarter, our life science product business generated solid results. This was driven by continued demand for MVE Biological Solutions' industry-leading cryogenic systems. specific contributors this quarter included strong demand for animal health customers as well as improved general demand from the america's region mve continues to be the market leader and a consistent cash flow generator as well as providing support and synergies with our life sciences services business along with our total revenue growth we improved adjusted abita from continuing operations by $1.3 million year-over-year, achieving positive adjusted EBITDA of $400,000. This marks an important milestone in our Pathway to Profitability initiative. We believe these results will continue progressively over the coming quarters and that we are positioned to drive more efficiencies, more scale in our operations, and continued margin expansion, thereby delivering sustainable, profitable growth. We also celebrated a number of operational milestones this quarter. For example, CropWord Systems' IntegraCell Cryopreservation Services now has clinical processes running in both Houston, Texas and Liège, Belgium. We were also selected by Verismo Therapeutics to support its two clinical trial cure CAR-T cell therapy programs. IntegraCell is just in the beginning to achieve its mission of bringing its standard-setting services to the cell therapy industry. IntegraCell represents yet another standard-setting temperature control supply chain solution improvement provided by CrowdPort that, once fully adopted, will support additional scaling of the cell therapy industry. Our capital investment program will curb as we launch our state-of-the-art bioservices operations and our new global supply chains in Paris, France in the fourth quarter, and we also open our new state-of-the-art global supply chain center in Santa Ana, California in the fourth quarter. These two new facilities add significantly to our global supply chain center network and our ability to deliver advanced temperature control global supply chain solutions for our life science clients worldwide. There was also significant completion of projects in our life science products as MVE began shipping a number of new products, including our MVE Fusion 811 self-regenerating cryogenic freezer that operates without the need of cryogenic infrastructure in routine liquid nitrogen refills. We also began producing cryogenic freezers in China during the second quarter, shipping our first orders of models HE and open tops with newly introduced Cryoverse Connect controllers. These accomplishments are in line with our previously announced goal of making all products smart, that is receiving and generating data. We're also advancing our digital initiatives as we employ meaningful AI applications that improve our productivity and advance our enterprise technology strategy. Supplementing our use of machine learning technology, we're utilizing generative AI to automate routine tasks, analyze large data sets, manage risk, and expedite decision making, all with a human in the loop. We are also providing our employees across the world with enterprise-approved generative AI tools for innovation purposes, and we've already begun to see measurable results. Today's report highlights our strong financial results, emphasizes the value of our integrated temperature-controlled supply chain solutions platform, indicates our broad industry-leading revenue pipeline, and reports the great strides we have made in expanding our resources and capabilities through our strategic initiatives. Reflecting on our strong first-half performance, we are affirming our full-year 2026 revenue guidance of $192 to $196 million. I sincerely believe that there is no organization that is better positioned than CryoPort to provide critical temperature-controlled supply chain solutions leadership required to help scale the cell and gene therapy industry. Based on market feedback and demand, our comprehensive and proven portfolio of services and products are designed to help our clients bring life-saving therapies to patients around the world safely, reliably, and efficiently. That mission drives me and every one of my CryoPort teammates, a mission we could not deliver without you. Thank you for your continued confidence in CryoPort and for being a part of this exciting journey with us. We'll now open the floor for your questions.

Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one untouched on the phone. You will hear a prompt that your hand has been raised. Should you decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. And your first question comes from Puneet Souda from Lear and Partners. Please go ahead.

This is Philip on for Puneet. Thanks for the question. My first question is just on guidance. The first half revenue around $97 million in 2QB consensus, yet you're reiterating full-year guide at $192 to $196 million. And I just want to ask, what is the implied second half shape, and is holding the range more conservatism, or is there a specific second half, Edwin, that you're contemplating here?

Yeah, thank you for the question. It's understandable. And I'll answer part of it, and then I'll ask Robert to supplement with any comments he has. But, you know, given the geopolitical situation, the macroeconomics that are associated with that, we think it's prudent to hold our guidance to where it is today. There are just a lot of uncertainties in the world. We're moving very well. We are very pleased with our performance. We know that our plans are being implemented. The industry is continuing to progress, and we feel very good about that. But we think that at this point, it's prudent just to hold our guidance as to where it is. Robert, would you like to comment further?

Yeah, I mean, Jerry covered most of it. I think, look, the key assumptions underlying our 26 outlook really have remained largely unchanged. The fundamentals, as Jerry outlined, for our business continue to be very strong, and we see robust demand for our life science services and life science products businesses. We've seen it throughout the first half of the year, and we expect those trends to continue. into their balance of 2026?

Got it. That makes a lot of sense. I also wanted to ask about products growth. I think in the previous quarter, you affirmed high single-digit growth for products this Products, obviously, flat in 2Q, up 7% in the first half. So high singles for the year applies roughly 9% to 11% growth in the second half, if my math is correct. I just want to ask, is that still the view, or is mid-single digits more of a realistic rate?

I think it's probably in the upper single digits. The product growth was flat this year because we did have a strong second quarter last year, and so it didn't yield. But it's in line with our plan. We're performing very well. And remember, MBE is the world's leading cryogenic systems manufacturer. There's no one that comes even close to MBE. And the market has turned. It is more solid. It's more predictable than it was maybe a year ago or so. But we're very confident in MBE's performance and happy with its performance for the second quarter. It's on plan, and it's doing well. Robert, do you want to add anything else?

Well, I think you covered it. And I think the outlook, I think, for MBE and the products business continues to be solid. As a reminder, the MBE business has always been a strong cash generator, profitable, driving adjusted EBITDA. and we expect that to continue.

Awesome. Thank you.

Thank you. And your next question comes from Anna Snopkowski from KeyBank. Please go ahead.

Hi, this is Anna Snopkowski on for Paul Knight. Congrats on the great quarter and achieving positive adjusted EBITDA. My first question is around China. I saw you shipped your first freezer in China for China. Do you think you could just talk through your broader China strategy and how demand is trending there?

Well, China is a very important market for us. It's a market that I don't think anyone in the life sciences can ignore. And, you know, we do have a solid product strategy in China. The idea of producing that product for China was to produce it within countries so that we could avoid any kind of a tariff kind of situation and improve our competitive position, both in doers and freezers. This completed our line. It strengthened us in China. We have put a new emphasis on China within China with our business development operations, and we're very pleased with the way that's progressing. I don't think it's going to have a huge impact immediately. It will take time, like everything else does in the life sciences, but it's all on plan, and it's coming along very well, and it's strategically, you know, very important. Now, on the service side of the business, you know, we have yet to determine exactly our strategy. Mark and I will be working on that in more depth, and as we develop that, we'll report on it to you.

Yeah, maybe just to add, you know, currently you look at revenue, revenue from China is somewhere around 2% to 3% of our total revenue, so there's really only upside, you know, going forward longer term.

Thank you. And then my second question is just around margins. It seems like you hit your targets maybe a little earlier than expected. So what is your view on EBITDA margins in the back half of the year? Thank you.

Yeah, I think if you look at, you know, the EBITDA margins, you're right. We did come ahead a little bit earlier than initially inspected. Yeah, our objective now is really to continue to build on the progress we've made. Achieving positive EBITDA, obviously, in the second quarter was an important milestone. And we believe, you know, that demonstrate our strategy is working. You know, as the utilization of our network of global supply chain centers increases, we do expect to achieve additional operating leverage and with that expect to see a further increase in adjusted EBITDA going forward. I think one other thing maybe to point out when you look at the operational performance is also the strength of our cash generation. During the first half of 2026, as you'll see in our 10Q, we generated approximately $5 million in positive net cash from operating activities. And that represents a $17 million improvement compared to the first half of 2025. So we believe the combination of improving adjusted EBITDA operating cash flow and increasing utilization provides clear evidence of that path to sustainable profitability that's taking shape.

Great. Thank you.

Thank you. And your next question comes from Subbu Nambi from Gaganine Securities. Please go ahead.

Hi, this is Ethan on for Subbu. How have smaller biotechs versus larger farm have been performing with respect to trial starts and funding so far? And can you give the split between new trial starts, completions, and terminations in the quarter?

Mark? Yeah, well, I'll let Tom give you comments on the starts and terminations. But, look, both small biotech and big farm are putting money into the space. The financing situation has improved. What we're seeing, though, is most of that money is going into Phase 2 and Phase 3 programs. Phase 1 is a little bit softer, but they're going for the bets and really trying to push the bulk of their pipeline through to commercial launch, which is good for us because, obviously, we see substantial economic benefit from commercialization activity, and so we view that as a very positive sign, and that's evidenced by the increase in our Phase 2 and Phase 3 trials for the quarter. Tom, you want to comment on that?

Ethan, in Q2, there were 29 ads and 16 removed. Of those 16 removed, six were terminated and 10 were completed. So pretty good stats.

Thank you. And your next question comes from Richard Baldry from Roth Capital. Please go ahead.

It's good to see your first sort of commercial client on the IntegralSell side. Can you talk a little bit more about, you know, maybe pipelines, prospects for more ads there, what the gating factors will be, sort of how you see the growth in that part of the business picking up over 27 and beyond?

Yeah, so, you know, obviously we did onboard our first clients and we are seeing them starting to ramp modestly. Now, I want to remind everybody, the first two sites that we've set up for IntegraCell, the Houston, Texas site and Leash, Belgium site, are proofing sites, right, for the larger initiative. And so it does take some time for industry to adopt the standard setting services and we really do believe that IntegraCell is a cutting edge you know service offering that's really going to help the industry standardize. We have made significant progress out of both those sites as we mentioned. We announced the relationship with Verismo at the end of last month and so while we don't anticipate it being a significant revenue contributor for 26, we do believe that this will be a significant contributor to our overall revenue in the future, and we do believe that it will continue to ramp modestly through 26 and be a significant contributor in the future.

Rich, the reason it's going to be what Mark just explained is the reason is that this is a standard-setting service that will provide an ability for the industry to scale, and it will provide better economics for the industry. So it's got the drivers are there. It's just a matter of time for the industry to adopt. You know, changing things in our industry takes a long time. It's very complicated. You have to go through a lot of regulatory hurdles, and you have to make a lot of adjustments into SOPs and other quality requirements and so forth. So just reinforcing what Mark said, this is an important – it's important, but it will take time.

Thank you.

And if there are any other questions, please press star 1. And your next question comes from Macky Taj from Steven. Please go ahead.

Hey, good afternoon, and thank you for taking my questions. Maybe the first, you know, Orca, it's good to see an allogeneic approval there. I guess my questions are really around the Fusion 800 freezer now. It's been on the market for a few months, a few quarters now. I just want to get a flavor for how the pipeline looks or how the interest is trended for that product.

MVE is doing well, and the pipeline has improved, you know, from recent times. The industry is stable, and the outlook is good. MVE is on very, very solid ground. We just completed some of our strategic planning exercises, and MVE's future is impressive.

Yeah, let me just add a little bit to that. So going to the Fusion, you know, we view the Fusion as a significant future product offering that is really going to open up the ability of community care hospitals to be able to support cell and gene therapies. We have engaged the industry from that perspective. There's a significant amount of interest as it relates to that. But, you know, obviously this ties into a broader strategy for a lot of these companies, and we're working hand-in-hand with them to support that. And Fusion will play a big role in that.

I appreciate that. And then maybe, Jerry, you mentioned AI as an efficiency improvement tool. I just want to get a sense for how you are viewing the potential impact across the business as it stands today.

You know, there's no question that AI is going to have a big impact on all industry, and certainly we're no exception. And we already are seeing improvements in efficiency, and we're seeing, you know, timeframes collapse, and we will continue to see that. I was just talking to our enterprise technology group today about their initiatives and about the next set of priorities. We're focused on either improving efficiency or effectiveness. We're very targeted. So we have a successful AI initiative going on, and you'll hear more about it each quarter. And I'm very optimistic about it. It's a fantastic technology.

Appreciate the color.

Thank you. And there are no further questions at this time. Mr. Shelton, you can continue your conference.

So that's concluding? So thank you, operator. Ladies and gentlemen, thank you for your questions and our discussions. As our financial and operating results show, we delivered an excellent second quarter, generating growth across our key revenue streams, improving profitability, and achieving the important objective of delivering positive adjusted EBITDA for the quarter as we march down our pathway to profitability. With our accomplishments to date, we are well positioned to further expand margins, enhance operating efficiency, and deliver sustainable, profitable, long-term growth for our shareholders. Moving forward, we will remain focused on executing our strategy, driving continued financial performance, and capitalizing on the significant opportunities before us. We expect upcoming growth catalysts will drive us to new heights with the advancement of our global supply chain center network and our recent launches of new products and services. We thank you all for joining us today. We appreciate your continued interest and support, and we look forward to sharing our further progress with you when we report on our third quarter financial results. We wish everyone a good evening. Thank you.

This concludes your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day, everybody.