Champions Oncology Reports Record Quarterly Revenue of $17.0 Million Record Net Income of $4.5 Million

Rhea-AI Summary

Champions Oncology (Nasdaq:CSBR) reported record-breaking financial results for Q3 fiscal 2025. Total revenue increased 42% to $17.0 million, with net income reaching $4.5 million and adjusted EBITDA of $5.2 million.

The company achieved several key milestones, including signing their first data licensing deal worth up to $8.0 million and improving operational efficiency. Core services business grew 4%, while gross profit reached $10.4 million with a 61% margin. Year-to-date performance showed 23% revenue growth to $44.6 million.

Cost reduction initiatives proved successful, with total costs decreasing by 14.1% to $12.5 million compared to the previous year. The company maintains a strong financial position with $3.2 million cash on hand and no debt, while research services margin improved from 35% to 48% year-over-year.

Positive

• Record quarterly revenue of $17.0 million, up 42% YoY
• Strong net income of $4.5 million vs previous year loss
• Significant margin improvement to 61% from 35% YoY
• First data licensing deal worth up to $8.0 million
• Successful cost reduction leading to 14.1% decrease in operating expenses
• Debt-free balance sheet

Negative

• Reduced investment in R&D and subsidiary Corellia
• Ongoing funding constraints in pharma and biotech sectors
• Anticipated fluctuations in quarterly revenue warned by management

Insights

Financial Analyst

Champions Oncology has delivered an exceptional financial transformation in Q3 FY2025 with $17.0 million in quarterly revenue, representing a substantial 42% year-over-year increase. The company's pivot to profitability is particularly impressive – generating $4.5 million in net income compared to losses in the prior year period.

Two key developments stand out: First, the $4.5 million in data licensing revenue marks the company's entry into a potentially higher-margin business segment. Second, the operational efficiency improvements are substantial, evidenced by the 14.1% reduction in total costs alongside revenue growth. The research services margin expansion from 35% to 48% year-over-year demonstrates the effectiveness of management's cost realignment strategy.

While management cautioned about potential quarterly revenue fluctuations, the company's debt-free status and growing cash flow from operations ($918,000 this quarter) indicate strengthening financial fundamentals. The strategic reduction in non-essential R&D spending shows disciplined capital allocation, focusing resources on core growth drivers while improving overall profitability.

The $8.0 million data licensing deal represents not just immediate revenue but signals a potentially transformative new business line with recurring revenue characteristics, which investors typically value at higher multiples than service revenues. This diversification reduces dependency on the more labor-intensive research services segment.

Biotechnology Industry Specialist

Champions' successful launch of its data licensing platform represents a significant strategic pivot that addresses multiple challenges facing preclinical oncology research providers. By monetizing their proprietary data assets, they've created a scalable, higher-margin revenue stream that complements their traditional lab services business.

The hiring of an EVP specifically to expand the data licensing platform signals management's commitment to this new growth vector. This move aligns with broader industry trends where the value of curated biological datasets is increasingly recognized – especially in oncology, where treatment response data across diverse tumor models carries significant predictive value for drug developers.

What's particularly notable is Champions' ability to deliver these results despite what management describes as "ongoing funding constraints in the pharma and biotech sectors." Their 4% growth in traditional research services during a challenging funding environment demonstrates resilience and market share gains.

The reduced investment in Corellia (their target discovery subsidiary) shows pragmatic prioritization – focusing resources on immediately monetizable assets rather than longer-term discovery programs during a period of capital constraint. The company has effectively balanced operational efficiency with strategic growth initiatives, positioning it well regardless of how biotech funding cycles evolve.

With both improved core service margins and this new data licensing revenue stream, Champions has significantly strengthened its competitive position in the specialized oncology research services market.

HACKENSACK, NJ / ACCESS Newswire / March 11, 2025 / 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 third quarter of fiscal 2025, ended January 31, 2025.

Third Quarter and Recent Highlights:

• Total revenue increased 42% to $17.0 million

• Gross profit of $10.4 million; gross margin of 61%

• Net income of approximately $4.5 million

• Adjusted EBITDA of $5.2 million

• Signed first data licensing deal worth up to $8.0 million

• Hired Matt Newman, Executive Vice President and General Manager, to lead and expand the development of Champions' data licensing platform

Year to Date Highlights:

• Total revenue increased 23% to $44.6 million

• Gross profit of $23.5 million; gross margin of 53%

• Net income of $6.5 million

• Adjusted EBITDA of $8.3 million

Ronnie Morris, CEO of Champions, commented, "Our third quarter was transformational, marked by our first major data licensing agreement-an important milestone toward monetizing our proprietary data platform." Added Morris, "despite ongoing funding constraints in the pharma and biotech sectors, we continue to drive strong performance in our core services business."

David Miller, CFO of Champions, added, "We delivered record breaking financial results this quarter, with revenue surpassing $17.0 million and adjusted EBITDA reaching $5.2 million. While we anticipate some fluctuations in quarterly revenue, our strategic cost realignment positions us for sustained long-term profitability."

Third Fiscal Quarter Financial Results

Total oncology revenue for the third quarter of fiscal 2025 was $17.0 million compared to $12.0 million for the same period last year, an increase of 42%. The increase stemmed from a 4% increase in our research services business and $4.5 million from data license revenue. Total costs and operating expenses for the third quarter of fiscal 2025 were $12.5 million compared to $14.6 million for the third quarter of fiscal 2024, a decrease of $2.1 million or 14.1%.

For the third quarter of fiscal 2025, Champions reported income from operations of $4.5 million, including $256,000 in stock-based compensation and $398,000 in depreciation and amortization expenses, compared to a loss from operations of $2.6 million, inclusive of $379,000 in stock-based compensation and $481,000 in depreciation and amortization expenses, in the third quarter of fiscal 2024. Adjusted EBITDA, which is defined as income from operations excluding stock-based compensation, depreciation and amortization expenses, was $5.2 million for the third quarter of fiscal 2025 compared to an adjusted EBITDA loss of $1.7 million in the third quarter of fiscal 2024.

Cost of oncology revenue was $6.6 million for the three-months ended January 31, 2025, a decrease of $1.2 million, or 15.7% compared to $7.8 million for the three-months ended January 31, 2024. The decrease in cost of oncology revenue was primarily from a decrease in compensation and lab supply costs due to our recent emphasis on improving efficiencies and reducing costs along with a reduction in outsourced lab services which fluctuate quarterly in the ordinary course of business. For the three months ended January 31, 2025, total margin was 61%, with research services margin of 48% compared to 35% for the three-months ended January 31, 2024. The increase in revenue coupled with our cost reductions led to improved service margins.

Research and development expense for the three-months ended January 31, 2025 was $1.7 million, a decrease of $467,000 or 21.4%, compared to $2.2 million for the three-months ended January 31, 2024. The decrease was primarily due to reduced investment in our wholly owned subsidiary, Corellia, focused on target discovery. Sales and marketing expense for the three-months ended January 31, 2025 was $1.8 million, essentially flat with a nominal increase of $9,000, or 0.5%, compared to $1.8 million for the three-months ended January 31, 2024. General and administrative expense for the three-months ended January 31, 2025 was $2.4 million, a decrease of $366,000, or 13.2%, compared to $2.8 million for the three-months ended January 31, 2024. The decrease was primarily from a decline in compensation expense and non-cash items of stock-based compensation and depreciation and amortization.

Net cash provided by operating activities was approximately $918,000 for the three-months ended January 31, 2025 and was primarily due to net income for the quarter offset by an increase in accounts receivable. Net cash used in investing activities for the three-months ended January 31, 2025 was approximately $470,000 for lab and computer equipment. Net cash provided by financing activities for the three-months ended January 31, 2025 was nil resulting from proceeds from options exercise of approximately $38,000 offset by financing lease payments of approximately $38,000.

The Company ended the quarter with cash on hand of approximately $3.2 million. The Company has no debt.

Year-to-Date Financial Results

Total oncology revenue for the nine-months ended January 31, 2025 was $44.6 million compared to $36.2 million for the same period last year, an increase of 23.3%. Total costs and operating expenses for the nine-months ended January 31, 2025 were $38.0 million compared to $43.2 million for the same period of fiscal 2024, a decrease of $5.2 million or 12.0%.

For the nine-months ended January 31, 2025, Champions reported income from operations of $6.6 million, including $523,000 in stock-based compensation and $1.2 million in depreciation and amortization expenses, compared to a loss from operations of $7.1 million, inclusive of $855,000 in stock-based compensation and $1.4 million in depreciation and amortization expenses, over the same period of fiscal 2024. Excluding stock-based compensation, depreciation and amortization expenses, Champions reported adjusted EBITDA of $8.3 million for the nine-months ended January 31, 2025 compared to an adjusted EBITDA loss of $4.8 million over the same period last year.

Cost of oncology revenue was $21.1 million for the nine-months ended January 31, 2025, a decrease of $1.0 million, or 4.7% compared to $22.2 million for the nine-months ended January 31, 2024. The decrease in cost of oncology revenue was primarily from a decrease in compensation and lab supplies expenses offset by an increase in mice costs. For the nine-months ended January 31, 2025, total margin was 53%, with research services margin of 48% compared to 39% for the nine-months ended January 31, 2024. The improved margin resulted primarily from a combination of an increase in revenue while reducing costs due to operational efficiencies implemented and other cost reduction initiatives.

Research and development expense for the nine-months ended January 31, 2025 was $4.9 million, a decrease of $2.6 million or 35.1%, compared to $7.5 million for the nine-months ended January 31, 2024. The decrease was primarily due to reduced investment in research and development in nonessential services, including Corellia, our wholly-owned subsidiary. Sales and marketing expense for the nine-months ended January 31, 2025 was $5.2 million, a slight decrease of $52,000, or 1.0%, compared to $5.3 million for the nine-months ended January 31, 2024. General and administrative expense for the nine-months ended January 31, 2025 was $6.8 million, a decrease of $1.5 million, or 18.0%, compared to $8.3 million for the nine-months ended January 31, 2024. 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. EDT (1:30 p.m. PDT) to discuss its third quarter financial results. To participate in the call, please call 888-506-0062 (Domestic) or 973-528-0011 (International) and enter the access code 403045, or provide the verbal reference "Champions Oncology".

Full details of the Company's financial results will be available by or before March 17, 2025 in the Company's Form 10-Q at www.championsoncology.com.

* Non-GAAP Financial Information

This press release contains "Non-GAAP financial measures," which are measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP").

A further explanation and reconciliation of these Non-GAAP financial measures is included below and in the financial tables in this release.

The Company believes that the Non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The Company's management uses Non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results and for internal planning and forecasting purposes. Adjusted EBITDA and Adjusted EPS represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that these measures are useful in evaluating our core operating results. However, Adjusted EBITDA and Adjusted EPS are not measures of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income, operating income, or EPS as indicators of our operating performance or to net cash provided by operating activities as a measure of our liquidity. We believe the Company's Adjusted EBITDA and Adjusted EPS measures provide information that is directly comparable to that provided by other peer companies in our industry, but other companies may calculate Non-GAAP financial results differently, particularly related to nonrecurring, unusual items.

Adjusted EBITDA

Adjusted EBITDA represents net income (loss) excluding the effect of stock-based compensation and depreciation and amortization and may also exclude other items not indicative of our ongoing operating performance, when defined.

Adjusted Net Income (Loss) and Adjusted Earnings Per Share (EPS)

Adjusted net income (loss) (if denoted) and adjusted EPS exclude the effect of stock-based compensation and depreciation and amortization and may also exclude other items not indicative of our ongoing operating performance when defined.

About Champions Oncology, Inc.

Champions Oncology is a global preclinical and clinical research services provider that offers end-toend 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 Net Income (Loss) to Adjusted EBITDA - (Non-GAAP) (Unaudited)

		Three Months Ended January 31,								Nine Months Ended January 31,
		2025				2024				2025				2024
Net income (loss) - GAAP		$	4,495			$	(2,530	)		$	6,536			$	(7,167	)
Less:
Stock-based compensation			256				379				523				855
Depreciation and amortization			398				481				1,246				1,408
Adjusted EBITDA - Non-GAAP		$	5,149			$	(1,670	)		$	8,305			$	(4,904	)

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

		Three Months Ended January 31,								Nine Months Ended January 31,
		2025				2024				2025				2024
EPS - basic, GAAP		$	0.33			$	(0.19	)		$	0.48			$	(0.53	)
Less:
Effect of stock-based compensation on EPS			0.02				0.03				0.04				0.06
Effect of depreciation and amortization on EPS			0.03				0.04				0.09				0.10
Adjusted EPS - basic, Non-GAAP		$	0.38			$	(0.12	)		$	0.61			$	(0.37	)
		Three Months Ended January 31,								Nine Months Ended January 31,
		2025				2024				2025				2024
EPS - diluted, GAAP		$	0.31			$	(0.19	)		$	0.46			$	(0.53	)
Less:
Effect of stock-based compensation on EPS			0.02				0.03				0.04				0.06
Effect of depreciation and amortization on EPS			0.03				0.04				0.09				0.10
Adjusted EPS - diluted, Non-GAAP		$	0.36			$	(0.12	)		$	0.59			$	(0.37	)

Unaudited Condensed Consolidated Statements of Operations (unaudited)

		Three Months Ended January 31,								Nine Months Ended January 31,
		2025				2024				2025				2024
Oncology revenue		$	17,039			$	12,019			$	44,589			$	36,153
Cost of oncology revenue			6,617				7,849				21,118				22,151
Research and development			1,719				2,186				4,862				7,494
Sales and marketing			1,806				1,797				5,236				5,288
General and administrative			2,398				2,764				6,813				8,305
Income (loss) from operations			4,499				(2,577	)			6,560				(7,085	)
Other income (expense)			19				58				30				(33	)
Income (loss) before provision for income taxes			4,518				(2,519	)			6,590				(7,118	)
Provision for income taxes			23				11				54				49
Net income (loss)		$	4,495			$	(2,530	)		$	6,536			$	(7,167	)
Net income (loss) per common share outstanding
basic		$	0.33			$	(0.19	)		$	0.48			$	(0.53	)
and diluted		$	0.31			$	(0.19	)		$	0.46			$	(0.53	)
Weighted average common shares outstanding
basic			13,700,627				13,593,758				13,620,686				13,538,480
and diluted			14,364,904				13,593,758				14,132,712				13,538,480

Condensed Consolidated Balance Sheets

		January 31, 2025				April 30, 2024
		(unaudited)
Cash and cash equivalents		$	3,202			$	2,618
Accounts receivable, net			15,782				9,526
Other current assets			713				1,495
Total current assets			19,697				13,639
Operating lease right-of-use assets, net			5,370				6,252
Property and equipment, net			5,040				5,721
Other long term assets			185				185
Goodwill			335				335
Total assets		$	30,627			$	26,132
Accounts payable and accrued liabilities		$	7,360			$	7,960
Current portion of operating lease liabilities			1,434				1,337
Other current liabilities			154				150
Deferred revenue			10,922				12,094
Total current liabilities			19,870				21,541
Non-current operating lease liabilities			5,003				6,093
Other Non-current Liability			285				401
Total liabilities			25,158				28,035
Stockholders' equity (deficit)			5,469				(1,903	)
Total liabilities and stockholders' equity (deficit)		$	30,627			$	26,132

Unaudited Condensed Consolidated Statements of Cash Flows (unaudited)

		Nine Months Ended January 31,
		2025				2024
Cash flows from operating activities:
Net income (loss)		$	6,536			$	(7,167	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Stock-based compensation expense			523				855
Operating lease right-of use assets			881				782
Depreciation and amortization expense			1,246				1,410
Loss on disposal of equipment			-				81
Allowance for doubtful accounts and estimated credit losses			(320	)			314
Changes in operating assets and liabilities			(7,920	)			(596	)
Net cash provided by (used in) operating activities			946				(4,321	)
Cash flows from investing activities:
Purchases of property and equipment			(564	)			(839	)
Net cash used in investing activities:			(564	)			(839	)
Cash flows from financing activities:
Repurchases of common stock			-				(634	)
Proceeds from the exercise of stock options			314				252
Finance lease payments			(112	)			(108	)
Net cash provided by (used in) financing activities:			202				(490	)
Net increase (decrease) in cash			584				(5,650	)
Cash at beginning of period			2,618				10,118
Cash at the end of period		$	3,202			$	4,468

Contact: One University Plaza, Suite 307 Hackensack, NJ 07601 Tel: 551-206-8104

SOURCE: Champions Oncology, Inc.

View the original press release on ACCESS Newswire

FAQ

What was Champions Oncology's (CSBR) revenue growth in Q3 2025?

CSBR's revenue grew 42% to $17.0 million in Q3 2025 compared to $12.0 million in the same period last year.

How much is Champions Oncology's (CSBR) first data licensing deal worth?

CSBR's first data licensing deal is worth up to $8.0 million.

What was CSBR's gross margin in Q3 2025?

CSBR achieved a gross margin of 61% with gross profit of $10.4 million in Q3 2025.

How much did Champions Oncology (CSBR) reduce its operating expenses in Q3 2025?

CSBR reduced total costs and operating expenses by 14.1%, from $14.6 million to $12.5 million year-over-year.

What is Champions Oncology's (CSBR) current cash position and debt status?

CSBR ended Q3 2025 with $3.2 million in cash and no debt.