CSBR - Earnings call transcript Q2 2022 | Champions Oncology, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Champions Oncology’s Second Quarter Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode and the floor will be open for your questions and comments following the presentation. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Dr. Ronnie Morris. Sir, the floor is yours.

Ronnie Morris

afternoon. Good Morris, Oncology. Ronnie of CEO am Champions I

Joining Officer. for Thank is David our Chief Financial Miller, our you earnings me call. today quarterly for joining us

making you Before actual that statements. differ is we will begin, what could during remind from in I will call I results be described forward-looking materially and statements today's that those

GAAP may XX-K. had differ be financial as financial our Forms efforts. in software measures information factors and our solid available non-GAAP Overall, call the that Additional during the and is our discussed available could in discovery business the another growth earnings release. A Form well Services with to in is drug we as progress measures of good quarter cause that results and to in reconciliation XX-Q

Services for had remain service offerings while our Research both to base Oncology customer continued way our revenues, business paving expand bookings continued record the growth. and our We robust. Our expand

and new be to continue We a year more platform encouraged out ago. Lumin, our a little than software was by rolled

been licensing this our using and model now have customer users. our to base XXX SaaS in Lumin a stands customers excess platform of We

into year further software. base, adding ultimate build primarily our to this our improving the a have and developing integrating datasets on past feedback significant efforts and While focused the customers is platform over as user goal our such interface user

have services and customers user In a our in focused launched Our help Acuity, tool and Lumin Acuity to the to with In will broader and in provide base years. consulting Lumin platform, Lumin their conjunction is a goal create Workspaces. we've support we indispensible recurring own. the coming to bioinformatics to an result Lumin answer lead software significant analyze stream centered often which and Workspaces analytics data who we bioinformatics users Lumin created allows model In platform research used internal is custom their on by datasets. have and around Champions code, customers questions. to comprehensive pay a a play perform multifaceted Lumin. It per this resources all, not may is interrogate

the about analytics excited platform data are impact growth. long-term and potential our of software We and our

keying as the renewal such actively customer rates. are usage, and in We satisfaction metrics on

Over we targets development more relevant user make now we and story. good continue are With becomes our our to as targets quarters, to development data it the regards pipeline. we will more effort, we validated date, the through progress. disclose six than coming drug advancing those to have To

targets mentioned have ourselves advance continue previously, of these another or entity. we each As we to either partnership with will in

during Research In moving results we a summary, multiple to forward. Services have evaluating continue the advance explore each we opportunities will led partner, assessing the data discover simultaneously targets whether to continued Most second path, believe capture on platform to our the to we Discovery to importantly, value we to determine create. proprietary business target. We most target that we from develop internally and each strong want expand, while more continued validated or the financial which various pipeline, each strategic license quarter, the to to advantageous

SaaS pipeline. to business through continues targets and therapeutic our we the innovative Our grow advancing are

let over call detailed more results. for Now me of the review turn to David the Miller financial a

David Miller

Ronnie. Thanks

results filed the will Form with SEC today. on Our XX-Q full be later

of We increase approximately based results $XXX,XXX stock excluding of or compared financial the in quarter second operating $XX.X ago income XX%. record the in $XXX,XXX compared year Our million $XX.X and generated depreciation million of were to we income year $X.X $XXX,XXX operating to with revenue an ago of strong recognized million compensation period, period. and

million margin $X.X our period was stock the to in as year. Total was last to of quarter second gross we our noncash Focusing excluding results comp second same cost quarter year. $X.X XX% on sales as depreciation, do compared such XX% last expenses, and million for compared

discussed accelerate cost in resulting pressured were our minimizing work expansion. compensation, lab growth. our because we from supplies outsourced we with even our several study the By calls, [indiscernible] some of to As recent sales in lab reduced margins we volume lab prior revenue total have increases gross quarterly reliance our on and on outsourcing, increase

Over to last few the anticipated adequately continued in years, our to we've business invest our growth. support

the gross has in business. As with been increases, revenue incurred, gross from mainly anticipated worth leverage our improvement margin. and we the are already It's our of and margin much improvement investment the realizing also core costs noting,

and over was upward increase our products margin million $XXX,XXX additional longer ago our higher $X.X we overall meaningfully our provided, was the expense million in in in term. in XX%. as or investment, up The target compared platform. guidance with more margin adding the be therapeutic R&D line indicated increase ramping contribute to is TumorBank $X.X year million investing we $X.X total R&D will and discovery period, data of trend approximately to room for As an revenue, there to

increase another expect half of R&D year. in the We during expense the second

we of to mainly increase However, profitability. marketing offset results R&D period, in increase long-term ago $X.X a growth additional marginally and our or investment sacrifice million related short Sales for an from and was expansion team. be least our expenses reiterate The spend operating and at will expense in compensation will revenue $X.X growth and positive. operating compared income to marketing the term increase $XXX,XXX of our be We greater anticipate was should sales R&D that resulting and we XX%. the due sales million year

growth. quarter a future for The XXXX based our in year, we as increase total, an same G&A $X.X cash for primarily million of an and increases In the growth. period year to infrastructure was increase. $X.X million XX%, company support expense were approximately $X.X in to to due or to from $XX the increase with our expense, IT second IT for the expenses at compared stemming million in of fiscal $X.X primarily upgrading last investment compared expense compensation was Our the invest million increase ago, quarter a million XX%

turning $XXX,XXX quarter. prior to cash the cash. an the end At the of had our on increase sheet, $X.X from quarter, balance million we Now of of

operating quarter, the along generated of due approximately we had program. the record Lumin in expand GAAP platform cash research Cash quarter, financial continued software revenue in based activities a a for strong fixed service strength and asset and new was on our continued investing business net discovery laboratories. underlying advance our platform, hitting both we're improving from operating activities generated operating our $X.X non-GAAP We result. primarily For our for while $XX.X investment income to million summary, $XXX,XXX In due used cash of with we and in with basis positioned was to purchases growth revenue our million. target a

call about We open in forward March. the now and like our to next mid to look are call excited update We the for your would company's questions. progression

Operator

the [Operator Hewitt Instructions] Your from first question with Craig-Hallum. Matt is coming

is line live. Your

Matt Hewitt

Maybe adoption? in this and driving quarter curious for taking what feedback the the questions. the just kick users couple nice number XXX. is you up Good of I'm Lumin, what's thank maybe board have year, off afternoon, to past from for the a here and gentlemen on to items a just things that past jump of those obviously been the new some customers on

Ronnie Morris

Thanks, Thanks. Matt.

to People So that to Lumin. I using be used getting strong. continues are think feedback

to lot is. what of users think really their understand new haven't it are I a enough the adoption used -- really

that is what have we've people. we think learned to I support

to become learned the a platform. need need more technology. higher them This is We on software help we've support more. is and understand to to a user, have We of user we is them the first user. a how This to help become year new better new a what through that them

So, us of overall support people, early in as very the category would as a the that learning. I is gotten put people use think we've Lumin back I still what response. positive we more,

grow user We the to continue base.

early still it to is stronger, in think be of grow trying stages, them getting continue of and the the to working using lot and a We more the We feedback, more. with functionality. where where are to we're we're getting get we're kind but we users, that platform

Matt Hewitt

Lumin champions? their sounds are going be How are geared purely sales Got was side is finding out it. on their platform. of new a And joining on And prior what team? support members or role added many that then customers? before to they it team, specifically towards Maybe the you've new some experience that like

Ronnie Morris

say a mixture. would I Yes, it's

of our talking it also sales so can there they they as some well to that be We can members bring and four have group. more within internal and becoming customers try Lumin more sales. the late now combination is would whole that support the with I changes say Lumin, of one of a really our do our to in along, proficient sales Lumin as and out tune to team so that right bring of our force of more getting made we've customers

but think also at is, lot So of of speed. it I support sales, terms in users getting this a point, up both to

the technical support a have this outside itself, whole of supports team. of that that terms software for a In perspective, from team we

Matt Hewitt

maybe Okay, shifting questions, little hop I've got bit, then the in gears queue. a back and it? two I'll Got

if revenues or facility? discussions is you that's those you. lab quarter, going the you out officially us you've generate regarding of are progressing? I European that the during as update opened flow how First guess And that the started opened of give whether or up, could pipeline, be maybe how the to update could on and not Thank on us then last cytometry would question an

Ronnie Morris

lab Europe, the both We doing opened opened able questions the in up say to of of we The months would be I work some can the so so be to do go better of terms opened and larger more some in it flow we we clinical kind in so also, and European but opened. position general be, start can a just to Yes, validation. studies. together, site studies, the cytometry couple biomarker just ago, a

some assays really because in we any that our haven't just shift respect, to validate we're of So being seen able literally there.

over expect we real movement some win in have two, should I these the to a studies. we whether ability of larger quarter see or the So next

terms still something general, the biomarker about. excited in it's In of we're that business,

strides. well we've I Operationally, made the think also of think I we've some great done business. bringing

way large as that it a not the our that, I on contributor honestly, and expected would. say that bit call, other work the I a just pace. do believe in still a would seeing I percent, out at I this the as I of yet. growth, probably little will the the I like know, matter expected we've from we a that just of still terms we're played there, doing, still what teams the it significant we years to longer of grown hasn't customers, the think that mentioned It's though. not I I now, A and two really that we're You see before but business certainly our as hasn't the signs having expected. than I've to taken thought have I a built, faster but champions, lot it with it's of quality, parts as certainly we of that as trajectory time. conversations get robust it we're think look taking

Matt Hewitt

Understood. for Great, you questions. taking thank the

Ronnie Morris

Matt. welcome You're

Operator

Your Henry. is coming Scott next question from

live. is line Your

Unidentified Analyst

afternoon. and good Thank you

Just a couple questions.

strong you believe larger we're gains thinking sequential just have quarter First on gains, to second second another that two Would first perhaps you quarter next the 'XX. be the of would about fiscal any sequential comments well, even the gain I half care of as in thoughts from any quarters on make so to great? year?

David Miller

that Sure. quickly. I'll take

no of anticipate the second half year the any the in of to guidance currently the So year, I need provided. we'll have that's half been there's the that over sequential of but do first gain change

towards be no at of will need but it guidance, the there's the change end point. this We higher to

Unidentified Analyst

high second mean, good the quarter pretty XX% I can we was well, Okay. levels year? margin half the then a of of Perfect, expect number gross number, a in the expect that stay pretty the to that first XQ, good thank those And it you. in was as do throughout

David Miller

over the I do and The those be steadying are, level, those levels certainly the should longer that anticipate the where yes are that of and at margins with slight trend I that near. upward term. overall see levels an XX% book we the but fluctuations,

Unidentified Analyst

And great. was I in million $X.X XQ. R&D one Okay, model think then more question,

David Miller

Correct.

Unidentified Analyst

talking I about it's said year. larger step to believe per the couple What than second half of Are $XXX,XXX we quarter up size here you that? going a in the magnitude? or

David Miller

on up timing to we we're predict. than bumping But that. the exact hit planning I slightly over when next, quarter. by larger ramp $XXX,XXX the to would number of up the have Potentially going several -- is difficult anticipate, you each know, that are The

Unidentified Analyst

did quarter third Okay, I hear quarter, but in that may more the that it correctly? sounds be pronounced the like fourth than

David Miller

being timing QX exactly could be hard so be was, or of some simply the it It's right QX. really will It's now. matter with it a of to tell planned it spend, where

Unidentified Analyst

of question, you point? thinking we to inflection then we great. timeline pipeline, or And should the may I on Just proprietary mean, either that thinking out a how we to those the the six reach get targets Okay, an a programs two trying final out? mentioned of are front? think catalysts or the are when see we year some in years sense partner

Ronnie Morris

the think out will between that point Yes, or you I be years two Scott, put at between either I will enabling partner. will it's at numbers think license be or IND point, two a in and we be out it's it those at there, that will an year where stage a

I think that's a So that kind of goalpost. reasonable

Unidentified Analyst

questions. the taking for you Thank great. Okay,

Ronnie Morris

sure. welcome, You're

Operator

like lines to the questions We from for to would Ronnie have no Dr. turn closing Morris, I at remarks. this back time. floor further the

Ronnie Morris

Champions for quarterly we're services earnings thank We're excited our two include direction We And taking SaaS drug an we're you. expansive our our right for certainly feel This inflection Thank the as us as we're software time well incredibly path, for platform, Oncology. you, the new with business the at the as joining point. our is and development. efforts, call. well as which about an everybody, exciting on platform,

quarters to good Thank forward next evening. with updates the couple have look on we call. continuing this So you over our and a everybody

Operator

and Thank today's gentlemen, you. concludes Ladies event. this

at your a have You may Thank you this disconnect and wonderful for day. participation. time

Champions Oncology (CSBR) 14 Dec 212022 Q2 Earnings call transcript