Earnings call transcript Q3 2023

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Operator

Good day, everyone, and welcome to the Champions Oncology Third Quarter Fiscal Year 2023 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Dr. Ronnie Morris, Chief Executive Officer of Champions Oncology. Sir, the floor is yours.

Ronnie Morris

afternoon. Good CEO Morris, Champions of Ronnie Oncology. I'm

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

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

discussed Forms to financial that XX-K. A Form financial factors on to measures information available earnings and may cause results in call differ release. of XX-Q non-GAAP during is measures is Additional could available GAAP that be on the our the reconciliation

our Overall, our financial previous results quarter. were weaker than

However, we drug platform discovery good on our as strengthening continue our to make efforts. furthering well as progress

their to within we signing the first we economic a in areas: manifested X commit we macroeconomic customers for main environment headwinds our experienced and taking longer quarterly not during bookings a reevaluating year over to new business in As the all. due efforts given encountered second to signing our priorities we a in study as reality. by budgets last First, reported decline customers or discovery quarter, realigning the in at quarter, itself time saw some our This their services

the I weathered also optimistic and a worst cautiously positive corner that we impacted. quarter's the last note, seeing pipeline, an turned call, study saw we future strengthening the trends, decline. our impacted the uptick Both half Second, we we of a factors on had On bookings were cancellations, had second work will especially and in that not on that these of started. these our as adversely be yet revenue. indicated more discussed despite results negative And of we were

as cautious we bookings, bookings high While with quarter need new we've a to third record quarter with and started in strong the well. fourth sentiment, we the our reiterate finished still

X. enable prior average developments quarter. still are the year, revenue growth have from down May should higher us These our Cancellations but to in fiscal come positive than reaccelerate starts next our historical which

development good our continue regards make we effort, With to to drug progress.

to well stage stages. lead programs Our a and with now progressing are we at advance data for will programs and lead we are exciting are programs the X relative data level help and discovery beginning vivo and where in program. compounds of The significance. results collect These kits therapeutic gauge continue wholly-owned for each therapeutic to through to these sets progression the discovery the

kits for in vitro from We possible are therapeutic the the establishing vivo studies also in forthcoming. established with data and collaboration fan

third a the of quarter the second and year of view we longer-term the summary, as road half In our bump strategy. in

significant We a optimistic platform on in growth marking our expanding into target prospects. discovery the our progress anticipate preclinical are we stages, invest and We that continue will long-term our effort to milestone.

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

David Miller

Ronnie. Thanks,

results XX-Q the will Form with on Our [year] or before full on XX. SEC March be filed

to previously expected, Ronnie quarter $XX.X cancellations, of $XX.X decline of million an X%. third XXX,XXX disclosed [indiscernible] leading in financial compared to and the our bookings a mentioned, impacted as million uptick As period, in year-ago results, revenue was our

Year-to-date, our XX%. compared to $XX.X last year, increase an $XX.X revenue is million million of

in had the of compared loss income $X.X we to a quarter, of the For ago million $XXX,XXX year period.

of depreciation, stock-based adjusted loss EBITDA and $X.X an Excluding million. compensation had we

of growth. XX%. primarily year The increase or expenses bookings total our million expenses year, meet view $X.X to we sales as our such $X.X increase was $X.X from of depreciation, million staffed compensation Focusing to comp of as our third as the we operational demand teams million noncash cost our stock was on and quarter an during results, excluding the in last compared expected

relatively be we and this revenue a downturn took short-lived. quarter, anticipate Demand is strong, our still the hit will While revenue

we teams intact delays in for our volume Accordingly, study expected to operations our increase customers. any meet executing the without kept

the to XX% our lower XXXX. a XX% staffing on levels in margin gross range anticipate our was return margins a maintaining versus fiscal result the year-ago XX% of in As revenue, period. in We the

year compared and R&D million million increase expense [too], of to The and was $X.X TumorBank. is due proteomic $X.X as business million approximately an our in cost we discovery along period, ago replenished in data, expense compensation primarily with to the XX%. or added increase $X sequencing our mice

year to $X.X Sales period, and or expense was of $X.X marketing the increase an ago million compared XX%. million in $XXX,XXX

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

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

to generated the revenue, which recent For from billings net was approximately an bookings. operating $X.X increase quarter, in cash million activities includes due from primarily deferred

laboratories. activities for our investing was $XXX,XXX of used equipment Cash purchases in for

and sheet debt. with cash $XX million no in is approximately balance Our strong

setting In cancellations in XXXX. of and The will cancellations adjusted half year. summary, that stage anticipated positive during in return-to-revenue we experienced first EBITDA the slowed, for from signed the decline has growth the quarter bookings on an optimistic and study pace reacceleration of in an continue, increase a the revenue we're primarily the in

are positioned the long-term this and to progression overall well and prospects. excited small company's weather about We're we downturn,

will a We positive As our for next call results, to July. late the for call is year-end look forward outlook XXXX. be in

now your like the open call We would for to questions.

Operator

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

Matthew Hewitt

to trying here. just difference Maybe understand the

seeing two just time bookings. announcing what same each together, other, seem and I'm to a more at increased you're if you they bit cancellations, customers? little counter hearing the to record run the So this from you're And having could color provide you're mesh to period of on trying

Ronnie Morris

Yes, sure, Matt.

So if we bookings the delay between about think and the revenue.

there perspective. X were revenue this quarter during play at from things So a

is for first quarter lower bookings resulted that in quarter, a from a but weaker that quarter. was this bookings revenue our quarter -- the -- bookings weaker the than we usual The bookings previous that

of still, And were period of definitely is certain So that during lot there when when customers. uncertainty would a seeing think -- with extent, uncertainty. their that lot there out happening to quarter lot so a what our was of quarter's what a effect is there, in and bookings, -- we the I Not a was sure say, pause we an And a a of revenue. budgets, we were weakened time uncertainty. saw in terms there's more this terms I had but was of a in

bookings I though, think, and the and back came the quarter, much the are This sentiment, stronger. pipeline

next should going really we get to that and to like from off" -- So to why period. back back this I get we're starting left to going that's year, and "where about where we think comments feel we QX our were, we're

of let's greater this factor second say, noticed was historical noticed cancellations. during percentage period, -- The a than through August period We is, this and usual November. than we

previous booked some reappropriate had were of who to budgets in their people studies canceling were their and reevaluating some budgets. their quarters So of

we in the contributors quarter. two largest factors, the saw to revenue that those decreased was this between So that

Matthew Hewitt

Got it.

we a bit recover QX? revenues like 'XX? -- cadence, think that means update before not full didn't As mean about I should Or your that up, whatnot. on How far little step in as I'm I year in here the see the same cadence? sure hear we what thinking we or should would big an early it be sounds guidance. if QX how it's for But

Ronnie Morris

Yes.

I QX of kind respect. look to to that is going think in QX similar somewhat

we the I of think our given. that guidance we're looking end at had lower

cancellations going seeing we're normal year now the back of weaker were to and we poised that to expected. think is I be back think, we latter imagining had coming QX be the half things. is -- kind to the how track QX, with for this to we're of pipeline I that QX than And rates, on with what

Matthew Hewitt

your Got the of mismatch a talked we've or are a those. be case new sounds It unless here it. when hear That to start a you as in as cancellations, the place, talked And Did all concerned, I that in historically, that to I'm when you rightfully And doesn't the or customer appear costs And... anticipating because you've margins versus kept. for staff service misunderstanding something. the sounds far more kept gross correctly? trial then QX, this about like you book is so between new there it rebound. yet, like -- get

Ronnie Morris

Yes.

David Miller

Yes. Exactly.

Ronnie Morris

correct. I think heard that you

David Miller

Yes. -- sorry. No, it's

the the that, is actually -- factor that But revenue. So always in reality this case much so Matt, of not more have was a here. a and flavor there not advance there It's much our it really to a is more yes, give a important you component we was expenses different quarter. -- that's

new -- but this because So of reality. contributes, always that

that the message to the and that's So convey. we I was think think factor, important more wanted I

Matthew Hewitt

wondering for there? couple was that Have the to then your back we since could are update fill business. And out? hop a now some But performing. is get if And it. it on the think, you Got started an opportunity I open one maybe for in how of It's we lab I'll the expectations been, Italian look queue. of as more, I'm quarters what and

Ronnie Morris

Yes.

European opened would as continuing biomarker slowly, expected. to we clinical to general, So to biomarker, we clinical we general, had order the in opportunities, in clinical are say, access biomarker in opportunities. the lab the fast more as in I able be grow not

with point, a work. in this very out, lot that And high-quality making are -- the that the known in people it's know shape. good we're provider now really always oncology more strong even also getting we've development, preclinical the sure We as at think competitors clinical there. of quality out space a I though been operations of a space word do that in business the our

And of the to win So and quality. continuing down inch a challenging a to little that up I just time in on business continuing it's our sense are just more trials think bit based globally. we're

adoption of news work say addition to this already it's We've is the our still of couple good labs. but that the years kind all we we think is built not is certainly expected progress. The in would a a But for a investment And of still that the good -- ago. us I services, that there. suite we're

the have We expertise.

just word we're We're using clinical and be to more preclinical. CRO the making with that us. start comfortable getting it's get a of we customers not Now getting more just also can sure out that

Operator

the Please Q&A for host our I your to back remarks. concludes That Instructions] [Operator closing session. ahead. conference now will hand go

Ronnie Morris

challenging And quarter results. a feel for terms our wanted a strong. positivity. to we've everybody there's terms lot of outlook, challenging joining time, call. of in conference I the did Certainly, the but in it a The through was well. interest thank strong. quarterly So is -- is we went pipeline our it of like We But

And the next for Our operations are bringing everybody couple of a in about results place. we're good the excited quarters.

you So good evening, have a thank for joining. and

Operator

event. Thank This concludes you, today's everyone.

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

Champions Oncology (CSBR) 15 Mar 232023 Q3 Earnings call transcript