CryoPort, Inc. Common Stock 2026 Q2 Earnings Call

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 information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. 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.

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 10-K 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 Gerry, 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 Sciences 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. Jerrell Shelton, Chief Executive Officer of Cryoport. Gerry, the floor is yours.

Thank you, Todd. Good afternoon, everyone. With me today is our Chief Financial Officer, Robert Stefanovich, 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 the Life Sciences 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. 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 Sciences 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 TREGZI. 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 III. 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 BLA/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 Sciences Products 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 Americas 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 EBITDA 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're 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, Cryoport Systems IntegriCell 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. IntegriCell is just in the beginning to achieve its mission of bringing its standard-setting services to the cell therapy industry.

IntegriCell represents yet another standard-setting temperature control supply chain solution improvement provided by Cryoport 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. 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 Sciences clients worldwide. There was also significant completion of projects in our Life Sciences 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 and 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. We've already begun to see measurable results.

Today's report highlights our strong financial results, emphasizes the value of our integrated temperature control supply chain solutions platform, indicates our broad industry-leading revenue pipeline, 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 million-$196 million. I sincerely believe that there is no organization that is better positioned than Cryoport to provide critical temperature control supply chain solutions leadership required to help scale the cell and gene therapy industry. Based on market feedback and demand, our comprehensive improving 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, for being a part of this exciting journey with us. We'll now open the floor for your questions.