Champions Oncology Reports Quarterly Revenue of $13.5 Million Adjusted EBITDA of $1.1 Million

Rhea-AI Summary

Champions Oncology (NASDAQ:CSBR) reported strong Q2 fiscal 2025 results with revenue increasing 17% to $13.5 million and adjusted EBITDA of $1.1 million. The company achieved net income of $730,000 and maintained a gross profit margin of 45%. First half 2025 performance showed 14% revenue growth to $27.6 million with net income of $2.1 million.

Total costs decreased by $771,000 (5.7%) compared to Q2 fiscal 2024. The company implemented operational improvements and efficiencies, leading to increased revenue conversion. Management projects annual revenue growth of 10-15%, supported by core business strength and new data platform revenue contributions. The company ended the quarter with $2.8 million cash and no debt.

Positive

• Revenue increased 17% YoY to $13.5 million in Q2 FY2025
• Achieved net income of $730,000, compared to previous year loss
• Adjusted EBITDA improved to $1.1 million from -$1.4 million YoY
• Operating costs reduced by $771,000 (5.7%)
• Gross profit margin improved to 45% from 43% YoY
• Company maintains debt-free status

Negative

• Cash position relatively low at $2.8 million
• Net cash used in operating activities was $283,000
• Increased mice and lab costs impacting margins
• Research and development spending decreased by 32.8%

Insights

Financial Analyst

Champions Oncology delivered a remarkable turnaround with $13.5M Q2 revenue, up 17% YoY and achieved profitability with $730,000 net income versus previous losses. The company's operational efficiency initiatives have paid off, evidenced by a $771,000 reduction in operating expenses and improved gross margins of 45%. The development of a new data revenue stream and projected annual growth of 10-15% suggest sustainable momentum.

The balance sheet shows prudent management with zero debt and $2.8M cash on hand. Cost optimization efforts, particularly the 32.8% reduction in R&D expenses and 27.3% decrease in G&A costs, demonstrate effective cost control while maintaining growth. The positive adjusted EBITDA of $1.1M marks a significant improvement from the $1.4M loss in the same quarter last year.

Market Research Analyst

The improving pharma and biotech environment signals potential tailwinds for Champions Oncology's core business. The company's strategic pivot to monetize its data platform could be transformative, creating a new revenue stream that diversifies income sources. The 14.2% revenue growth in H1 FY2025 to $27.6M demonstrates strong market positioning in the preclinical research services sector.

Notable operational metrics include the enhanced revenue conversion percentage and accelerated bookings, indicating strengthening market demand. The company's ability to maintain growth while implementing cost efficiencies positions it favorably in the competitive CRO landscape. The sustained margin improvement from 41% to 47% year-over-year in H1 reflects successful execution of the business model optimization strategy.

HACKENSACK, NJ / ACCESSWIRE / December 11, 2024 / Champions Oncology, Inc. (Nasdaq:CSBR), a global preclinical and clinical research services provider that offers end-to-end oncology solutions, today announced its financial results for its second quarter of fiscal 2025, ended October 31, 2024.

Second Quarter and Recent Highlights:

• Total revenue increased 17% to $13.5 million

• Gross profit of $6.1 million; margin of 45%

• Net income of approximately $730,000

• Adjusted EBITDA of $1.1 million

• Development of new data revenue stream

First Half 2025 Highlights:

• Total revenue increased 14% to $27.6 million

• Gross profit of $13.1 million; margin of 47%

• Net income of $2.1 million

• Adjusted EBITDA of $3.2 million

Ronnie Morris, CEO of Champions, commented, "Our second quarter's performance solidified our confidence in the Company's turnaround that we've been discussing the last several quarters. We remain cautiously optimistic that the pharma and biotech environment is improving which will continue to contribute to our long-term growth." Morris added, "In addition to our core business, we made significant strides in monetizing our data platform, establishing an additional revenue stream that can be transformative for the Company."

David Miller, CFO of Champions, added, "We continued to deliver strong financial results in our second quarter as revenue increased 17% to $13.5M while we reduced total costs by $771,000. As a result, we recorded adjusted EBITDA of $1.1 million." Miller added, "With the renewed underlying strength in our core business coupled with the expected revenue contribution from our data platform, we're projecting revenue growth for the year of at least 10% - 15%."

Second Fiscal Quarter Financial Results

Total revenue for the second quarter of fiscal 2025 was $13.5 million compared to $11.6 million for the same period last year, an increase of 17%. The combination of operational improvements and efficiencies implemented, which led to an increase in our revenue conversion percentage, and the acceleration in our bookings, generated an increase in revenue for both the three months and six months ended October 31, 2024. Total costs and operating expenses for the second quarter of fiscal 2025 were $12.8 million compared to $13.5 million for the second quarter of fiscal 2024, a decrease of $771,000 or 5.7%.

For the second quarter of fiscal 2025, Champions reported income from operations of $732,000, including $9,000 in stock-based compensation and $399,000 in depreciation and amortization expenses, compared to a loss from operations of $2.0 million, inclusive of $53,000 in stock-based compensation and $484,000 in depreciation and amortization expenses, in the second quarter of fiscal 2024. Excluding stock-based compensation, depreciation and amortization expenses, Champions reported adjusted EBITDA of $1.1 million for the second quarter of fiscal 2025 compared to an adjusted EBITDA loss of $1.4 million in the second quarter of fiscal 2024.

Cost of oncology services was $7.4 million for the three-months ended October 31, 2024, an increase of $810,000, or 12.2% compared to $6.6 million for the three-months ended October 31, 2023. The increase in cost of oncology services was primarily from an increase in mice and lab costs to support revenue growth. For the three-months ended October 31, 2024, total margin was 45% compared to 43% for the three-months ended October 31, 2023. The improved margin resulted primarily from an increase in revenue and a lower cost base due to operational efficiencies implemented, but was under some specific pressure due to the cost of humanized mice.

Research and development expense for the three-months ended October 31, 2024 was $1.7 million, a decrease of $826,000 or 32.8%, compared to $2.5 million for the three-months ended October 31, 2023. The decrease was primarily due to reduced investment in research and development, including our target discovery program. Sales and marketing expense for the three-months ended October 31, 2024 was $1.8 million, a slight decrease of $44,000, or 2.5%, compared to $1.8 million for the three-months ended October 31, 2023. General and administrative expense for the three-months ended October 31, 2024 was $1.9 million, a decrease of $711,000, or 27.3%, compared to $2.6 million for the three-months ended October 31, 2023. The decrease was primarily from a decline in compensation and recruitment expenses and a one-time reduction in our credit loss reserve.

Net cash used in operating activities was approximately $283,000 for the three-months ended October 31, 2024 and was primarily due to an increase in accounts receivable and a decrease in accounts payable offset by net income for the quarter. Net changes in our working capital accounts were in the ordinary course of business. Net cash used in investing activities for the three-months ended October 31, 2024 was approximately $94,000 and was for lab and computer equipment. Net cash provided by financing activities for the three-months ended October 31, 2024 was approximately $239,000 resulting primarily from proceeds from options exercise.

The Company ended the quarter with cash on hand of approximately $2.8 million. The Company has no debt.

Year-to-Date Financial Results

Total revenue for the first half of fiscal 2025 was $27.6 million compared to $24.1 million for the same period last year, an increase of 14.2%. Total costs and operating expenses for the first half of fiscal 2025 were $25.5 million compared to $28.6 million for the first half of fiscal 2024, a decrease of $3.2 million or 11.0%.

For the first half of fiscal 2025, Champions reported income from operations of $2.1 million, including $267,000 in stock-based compensation and $848,000 in depreciation and amortization expenses, compared to a loss from operations of $4.5 million, inclusive of $476,000 in stock-based compensation and $929,000 in depreciation and amortization expenses, in the first half of fiscal 2024. Excluding stock-based compensation, depreciation and amortization expenses, Champions reported adjusted EBITDA of $3.2 million for the first half of fiscal 2025 compared to an adjusted EBITDA loss of $3.1 million in the first half of fiscal 2024.

Cost of oncology services was $14.5 million for the six-months ended October 31, 2024, an increase of $198,000, or 1.4% compared to $14.3 million for the six-months ended October 31, 2023. The increase in cost of oncology services was primarily from an increase in mice costs. For the six-months ended October 31, 2024, total margin was 47% compared to 41% for the six-months ended October 31, 2023. The improved margin resulted primarily from a combination of an increase in revenue while minimizing cost increases due to operational efficiencies implemented and other cost reduction initiatives.

Research and development expense for the six-months ended October 31, 2024 was $3.1 million, a decrease of $2.2 million or 40.8%, compared to $5.3 million for the six-months ended October 31, 2023. The decrease was primarily due to reduced investment in research and development in non-essential services, including our target discovery program. Sales and marketing expense for the six-months ended October 31, 2024 was $3.4 million, a slight decrease of $61,000, or 1.7%, compared to $3.5 million for the six-months ended October 31, 2023. General and administrative expense for the six-months ended October 31, 2024 was $4.4 million, a decrease of $1.1 million, or 20.3%, compared to $5.5 million for the six-months ended October 31, 2023. The decrease was primarily from a reduction in compensation, recruitment, and stock-based compensation expenses.

Conference Call Information:

The Company will host a conference call today at 4:30 p.m. EST (1:30 p.m. PST) to discuss its second quarter financial results. To participate in the call, please call 888-506-0062 (Domestic) or 973-528-0011 (International) and enter the access code 710610, or provide the verbal reference "Champions Oncology".

Full details of the Company's financial results will be available by or before December 16, 2024 in the Company's Form 10-Q at www.championsoncology.com.

* Non-GAAP Financial Information

See the attached Reconciliation of GAAP net income (loss) to Non-GAAP net income (loss) for an explanation of the amounts excluded to arrive at Non-GAAP net income (loss) and related Non-GAAP income (loss) per share amounts for the three and six months ended October 31, 2024 and 2023. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect the Company's basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP net income (loss) and Non-GAAP income (loss) per share are not, and should not, be viewed as a substitute for similar GAAP items. Champions defines Non-GAAP dilutive income (loss) per share amounts as Non-GAAP net income (loss) divided by the weighted average number of diluted shares outstanding. Champions' definition of Non-GAAP net income (loss) and Non-GAAP diluted income (loss) per share may differ from similarly named measures used by other companies and may not be applicable for the current reporting period.

About Champions Oncology, Inc.

Champions Oncology is a global preclinical and clinical research services provider that offers end-to-end oncology R&D solutions to biopharma organizations. With the largest and most annotated bank of clinically relevant patient-derived xenograft (PDX) and primary hematological malignancy models, Champions delivers innovative highest-quality data through proprietary in vivo and ex vivo platforms. Through its large portfolio of cutting-edge bioanalytical platforms, groundbreaking data platform and analytics, and scientific excellence, Champions enables the advancement of preclinical and clinical oncology drug discovery and development programs worldwide. For more information, please visit www.ChampionsOncology.com.

This press release may contain "forward-looking statements" (within the meaning of the Private Securities Litigation Act of 1995) that inherently involve risk and uncertainties. Champions Oncology generally uses words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. One should not place undue reliance on these forward-looking statements. The Company's actual results could differ materially from those anticipated in the forward-looking statements for many unforeseen factors. See Champions Oncology's Form 10-K for the fiscal year ended April 30, 2024 for a discussion of such risks, uncertainties and other factors. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and Champions Oncology's future results, levels of activity, performance or achievements may not meet these expectations. The Company does not intend to update any of the forward-looking statements after the date of this press release to conform these statements to actual results or to changes in Champions Oncology's expectations, except as required by law.

Champions Oncology, Inc.
(Dollars in thousands)

Reconciliation of GAAP to Non-GAAP Net Income (Loss) (Unaudited)

		Three Months Ended October 31,								Six Months Ended October 31,
		2024				2023				2024				2023
Net income (loss) - GAAP		$	728			$	(2,071	)		$	2,041			$	(4,637	)
Less:
Stock-based compensation			9				53				267				476
Net income (loss) - Non-GAAP		$	737			$	(2,018	)		$	2,308			$	(4,161	)

Reconciliation of GAAP EPS to Non-GAAP EPS (Unaudited)

		Three Months Ended October 31,								Six Months Ended October 31,
		2024				2023				2024				2023
EPS - GAAP, basic		$	0.05			$	(0.15	)		$	0.15			$	(0.34	)
Less:
Effect of stock-based compensation on EPS			-				-				0.02				0.04
EPS - Non-GAAP, basic		$	0.05			$	(0.15	)		$	0.17			$	(0.30	)
		Three Months Ended October 31,								Six Months Ended October 31,
		2024				2023				2024				2023
EPS - GAAP, diluted		$	0.05			$	(0.15	)		$	0.15			$	(0.34	)
Less:
Effect of stock-based compensation on EPS			-				-				0.02				0.04
EPS - Non-GAAP, diluted		$	0.05			$	(0.15	)		$	0.17			$	(0.30	)

Unaudited Condensed Consolidated Statements of Operations (unaudited)

		Three Months Ended October 31,								Six Months Ended October 31,
		2024				2023				2024				2023
Oncology services revenue		$	13,489			$	11,573			$	27,550			$	24,134
Cost of oncology services			7,428				6,618				14,500				14,302
Research and development			1,689				2,515				3,143				5,308
Sales and marketing			1,751				1,795				3,430				3,491
General and administrative			1,889				2,600				4,416				5,540
Income (loss) from operations			732				(1,955	)			2,061				(4,507	)
Other income (expense)			7				(105	)			11				(91	)
Income (loss) before provision for income taxes			739				(2,060	)			2,072				(4,598	)
Provision for income taxes			11				11				31				39
Net income (loss)		$	728			$	(2,071	)		$	2,041			$	(4,637	)
Net income (loss) per common share outstanding
basic		$	0.05			$	(0.15	)		$	0.15			$	(0.34	)
and diluted		$	0.05			$	(0.15	)		$	0.15			$	(0.34	)
Weighted average common shares outstanding
basic			13,593,766				13,497,061				13,593,766				13,529,629
and diluted			13,969,967				13,497,061				14,006,173				13,529,629

Condensed Consolidated Balance Sheets

		October 31, 2024				April 30, 2024
		(unaudited)
Cash and cash equivalents		$	2,754			$	2,618
Accounts receivable, net			10,470				9,526
Other current assets			860				1,495
Total current assets			14,084				13,639
Operating lease right-of-use assets, net			5,669				6,252
Property and equipment, net			4,967				5,721
Other long term assets			185				185
Goodwill			335				335
Total assets		$	25,240			$	26,132
Accounts payable and accrued liabilities		$	7,089			$	7,960
Current portion of operating lease liabilities			1,401				1,337
Other current liabilities			151				150
Deferred revenue			10,220				12,094
Total current liabilities			18,861				21,541
Non-current operating lease liabilities			5,374				6,093
Other Non-current Liability			324				401
Total liabilities			24,559				28,035
Stockholders' equity (deficit)			681				(1,903	)
Total liabilities and stockholders' equity (deficit)		$	25,240			$	26,132

Unaudited Condensed Consolidated Statements of Cash Flows (unaudited)

		Six Months Ended October 31,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	2,041			$	(4,637	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Stock-based compensation expense			267				476
Operating lease right-of use assets			583				502
Depreciation and amortization expense			848				929
Loss on disposal of equipment			-				65
Allowance for doubtful accounts and estimated credit losses			(280	)			234
Changes in operating assets and liabilities			(3,431	)			(971	)
Net cash provided by (used in) operating activities			28				(3,402	)
Cash flows from investing activities:
Purchases of property and equipment			(94	)			(747	)
Net cash used in investing activities:			(94	)			(747	)
Cash flows from financing activities:
Repurchases of common stock			-				(634	)
Proceeds from the exercise of stock options			276				252
Finance lease payments			(74	)			(74	)
Net cash provided by (used in) financing activities:			202				(456	)
Net increase (decrease) in cash			136				(4,605	)
Cash at beginning of period			2,618				10,118
Cash at the end of period		$	2,754			$	5,513

SOURCE: Champions Oncology, Inc.

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FAQ

What was Champions Oncology's (CSBR) revenue growth in Q2 2025?

Champions Oncology reported a 17% increase in revenue to $13.5 million in Q2 fiscal 2025 compared to $11.6 million in the same period last year.

How much did CSBR reduce its operating costs in Q2 2025?

Champions Oncology reduced its total costs and operating expenses by $771,000 or 5.7%, from $13.5 million in Q2 fiscal 2024 to $12.8 million in Q2 fiscal 2025.

What is CSBR's projected revenue growth for fiscal 2025?

Champions Oncology projects revenue growth of 10-15% for fiscal year 2025, driven by core business strength and expected revenue from their data platform.

How much cash does CSBR have on hand as of Q2 2025?

Champions Oncology ended Q2 fiscal 2025 with approximately $2.8 million in cash and no debt.

What was CSBR's adjusted EBITDA for Q2 2025?

Champions Oncology reported adjusted EBITDA of $1.1 million for Q2 fiscal 2025, compared to an adjusted EBITDA loss of $1.4 million in Q2 fiscal 2024.