Cerus Corporation Stock

Thank you. Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Sears Corporation's second quarter 2026 earnings conference call. Please be advised, today's conference is being recorded. I would like to hand the conference over to Tim Lee, Sears Head of Investor Relations. Tim, you may begin.

Thank you and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the investment relations website at ir.ceres.com. With me on the call are Vivek Jayaraman, Sears' President and Chief Executive Officer, and Kevin Green, CIRS Chief Financial Officer. CIRS issued a press release today announcing our financial results for the second quarter ended June 30th, 2026, and describing the company's recent business highlights. You can access a copy of this announcement on the company's website at www.siris.com. I'd like to remind you that some of the statements we'll make on this call relate to future events and performance, rather than historical facts and are forward-looking statements.

Examples of board-licking statements include those related to our future financial and marketing results, including our 2026 product revenue guidance, our expectations from gross margins, non-GAAP adjusted EBITDA performance, and our expected expense levels, as well as our commitment to achieving GAAP profitability. expected future growth in our growth trajectory and market opportunities, Our expectations that we will deliver P&L leverage in 2026 The availability and related timing of data from clinical trials and regulatory submissions and product launches, product expansion prospects, anticipated impact of our recent debt refinancing and other statements that are not historical facts. These four looking statements involve risk and uncertainties that could cause actual events, performance, and results to differ materially. They are identified and described in today's press release, in our slide presentation, and under risk factors in our form 10-Q for the quarter ended June 30, 2026, which will follow shortly. We undertake no duty or obligation to update our four existing statements. On today's call, we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA. These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. For reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures to the extent reasonably available, please refer to today's press release and the slide presentation available on our website.

We'll begin today with the vague providing a business update and corporate highlights, followed by Kevin to review our financial results and expectations for the rest of 2026. And lastly, closing remarks from the vague. And now it's my pleasure to introduce the big Joe Rahman, CSRS President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone. We appreciate you joining the call today. At Cirrus, our mission is clear, to expand patient access to save blood around the world. During the second quarter of this year, we made meaningful progress toward that goal. To date, based on kit sales, nearly 24 million transfusible doses have been produced worldwide. While we are proud of this progress, the fact remains that far too many patients still lack consistent access to safe blood. To realize our mission, we are focused on three core priorities. delivering sustainable double-digit growth, advancing innovation, and strengthening our financial foundation.

I'm pleased to report that our second quarter results demonstrate solid progress across each of these priorities. With respect to growth, worldwide product revenue increased 10% in Q2 compared to the same period last year. This growth was driven by the strong performance of our US ISC franchise, along with continued strength in our core business globally. North American sales accounted for approximately two-thirds of second quarter product revenue. As previously noted, intercept for platelets is the standard of care in both the United States and Canada. In the US, we estimate market penetration at approximately two-thirds, and we see clear opportunities for continued sharegates and the remaining one-third of the market. In the U.S., our collaboration with Blood Centers of America, or BCA, continues to be a positive contributor to our growth.

As a reminder, our BCA contract became effective at the beginning of 2026, and BCA member blood centers now account for more than half of all blood product distributions nationwide. Working closely with BCA, we've expanded education and awareness among its members regarding the benefits of past student inactivation. As a result, we are seeing a meaningful increase in engagement and receptivity to our technology, and this is resulting in new customers for both our platelet and IFC businesses. We are actively onboarding new IMC producers and are seeing a pronounced uptick in hospital activations. To further support ISV and drive awareness, we continue to invest in clinical evidence generation and medical education. For example, at the recently held Society for Obstetric Anesthesia and Perinatology meeting in Montreal, Dr. Jonathan Tucci of Vanderbilt University Medical Center presented data evaluating the use of ISB in the treatment of postpartum hemorrhage.

In his analysis, Dr. Tucci noted that pre-thought ISB reduced the time to first transfusion by 68% when compared with cryo-AHF and by 18% when compared with fibrinogen concentrate. In cases of uncontrolled bleeding, like maternal hemorrhage and trauma, every second counts. An earlier access to fibrinogen is of tremendous value. As we originally hypothesized, the combination of immediate access to FibroEngine and a five-day post-hoc shelf life is proving valuable to both clinicians and hospital administrators. The longer shelf life can materially reduce wastage, while immediate availability can support more timely treatment in critical bleeding situations. We believe these attributes position IFC favorably relative to both traditional cryo-AHS and fibrinogen concentrates, and we are beginning to see that value proposition gain traction in the market. As an example, we recently learned that a major academic hospital in the Northeast conducted a direct comparison of ISD and fibrinogen concentrates in order to determine which product to adopt.

They chose to adopt IFC at 100% based on its immediate availability, five days post-off-shelf life, and lower cost. Nationwide, we estimate that ISC currently holds a market share of approximately 10%. While we are encouraged by the progress to date, that level of penetration highlights a significant growth opportunity that remains for our ISC business. Turning to our efforts abroad, there is positive momentum across our business in EMEA. This is driven by the continued positive rollout of our next generation INT200 illumination device and further penetration of our core platelet franchise. also making inroads of plasma in a number of markets. In late April, we signed a new multiyear contract with the French Blood Establishment, or EFS. This multiyear agreement provides greater visibility into our medium-term revenue outlook and represents an important validation from one of the world's most respected blood services.

Beyond Europe, interest in Intercept continues to grow. At the recently held 39th Annual International Society of Blood Transfusion Meeting in Kuala Lumpur, we saw encouraging engagement from blood centers across the Asia-Pacific region. Currently, Asia represents one of Cirrus' most significant long-term growth opportunities. While we have established customer relationships in markets including Hong Kong and Thailand, our penetration across the broader region remains limited. We believe the opportunity across our current market and product portfolio, combined with expansion into emerging markets, provide access to multiple avenues by which to deliver durable double-digit growth. Turning to our second key priority, advancing innovation, I'm encouraged by the progress we made in the second quarter. New product development and label expansion remain central to expanding the clinical application of our technology.

These efforts allow us to expand the pool of patients who can access safer blood and provide the technology platform from which we can support durable long-term growth. Foundational to advancing innovation is the focus on quality. Our blood center customers, hospitals, and ultimately patients depend on us to deliver the highest quality product. To that end, I am pleased to report that we recently completed our Notified Body Recertification Audit with zero nonconformities. This comprehensive assessment of our quality management system is an important component of maintaining our CE and MD-STAT certifications. The result reflects the strength of our quality system and, more importantly, the commitment to quality of our employees and supplier partners worldwide. I would like to thank everyone whose preparation, discipline, and attention to detail contributed to our successful outcome.

Maintaining the highest standards of quality is fundamental to our mission and to the trust our customers place in CERA. During the quarter, we also submitted the PMA for the IEP200 for platelets to the U.S. We are excited about the opportunity to bring this technology to customers in the United States. Based on our current expectations, we could receive regulatory approval as early as the first half of 2027, although the timing will ultimately depend on the FDA's review process. Turning to intercept red light cells, we continue to advance our efforts in both the US and Europe. With respect to our US clinical efforts, we remain on track to announce top line results from our phase three reddish trial during the fourth quarter. In addition, we recently expanded our 2024 BARDA contract to advance the development of Intercept RBC, increasing the total potential contract value by nearly $22 million, from approximately $249 million to just over $270 million.

These additional funds will be used to support PMA-related activities in the U.S. With respect to our CE mark submission for Red Belt, ANSIM, our competent regulatory authority, continues its review of our application and we expect to receive questions from them later this year. Taken together, our R&D, clinical, and regulatory teams made meaningful strides last quarter to move our innovation portfolio forward. Our third core priority is to enhance our financial strength. During the last quarter, we improved our financial profile, lowered our cost of capital, and increased our strategic flexibility. These efforts strengthen our ability to self-fund market development and product innovation in a financially disciplined manner. We believe that continued execution against these priorities will position SEERs to expand patient access, deliver durable growth, and create long-term shareholder value, all while realizing our mission to increase the safety of the global blood supply.

With that, I would now like to turn the call over to Kevin to discuss our second quarter financial results in detail.

Thanks, Vivek, and thank you to those joining us on the call today. We sincerely appreciate your interest in CERIS. Before I get into the Q2 operating results, I'd like to provide some insight into our recently completed debt refinancing, which included a $30 million reduction in our term loan balance, million dollars from our balance sheet and 10 million from the lower cost revolver. While reducing the overall debt load, we expanded the size and borrowing-based flexibility of our revolving lender credit. Given the recent and expected trajectory of our operations and operating cash flows, we believe the new facility is demonstrative of our confidence as we move ahead. As a component of the refinancing, we reduced the interest spread and eliminated many of the smaller fees that were embedded in the previous facility. Just as important, we retained future optionality with up to an additional $30 million of term debt available in $5 million increments.

We eliminated prepayment fees after the first year. and retained up to an additional $15 million of capacity on the revolver. As a result of the refinancing, we expect to reduce annual interest expense by up to $3.5 million, further improving our ability to achieve our bottom-line goals. As you saw from today's press release, we continue to experience growing demand for our products and have confidence in our ability to continue driving sustained double-digit growth. As a result, we are raising the low end of our full year 2026 product revenue guidance range and now expect product sales of $229 to $231 million compared to our previous range of $227 to $231 million. In addition, we are raising our full-year IFC revenue guidance to a range of $23 to $25 million, compared to our previous range of $22 to $24 million. The updated guidance represents total year-over-year product revenue growth of 11 to 12 percent compared to 2025 and approximately 40 to 50 percent growth for IFC. Now, for the second quarter results, I'll begin with our product revenue performance.

For the second quarter of 2026, product revenue totaled $57.4 million, a 10% increase compared to the second quarter of 2025, when we recognized $800,000 of previously deferred IFC revenue. We saw strong growth across all of our product categories during the quarter. For the first half of 2026, product revenue increased 16% to $111.1 million, compared to $95.7 million recorded during the first half of 2025. By geography, second quarter North American product revenue increased 9% compared to the same period for the prior year. In EMEA, second quarter product revenue increased 10% year-over-year with growth across multiple countries. Favorable foreign currency exchange rates bolstered reported EMEA revenue growth by approximately 2%. In the U.S., reported IFC product revenue, as well as volume demand for the second quarter, increased approximately 20 percent to $6.7 million, compared to $5.6 million during the same period in the prior year. by continuing end market demand.

Recall, in the second quarter of 2025, IST sales included approximately $800,000 of deferred revenue from prior periods. Excluding the effect of that prior period revenue recognition, IFC revenue growth would have been approximately 40%, with demand up 43%. Of the total IFC sales shipped, 70% were in kit form. We continue to ship the business to the KIT model and expect that essentially all IFC sales will be in KIT form in 2027. Furthermore, as we see the full shift to kits from a mixed sales model of IST biologics and kits, we expect that we will see a benefit to our gross margins. While the finished biologics carry a higher selling price, the gross margin profile is lower than our corporate average. Switching now to government contract revenue, which, as a reminder, is not included in our revenue guidance.

Reimbursement for government-related R&D expenses declined year-over-year to $5.9 million from $7.7 million to Q2 2025. The year-over-year decline was due in large part to the completion of the FDA contract in 2025, as well as the wind-down of the BARDA 2016 contract, and, to a lesser extent, the timing of expenses related to the BARDA 2024 contract. We expect that as we move forward, revenue from the BARDA 2024 contract will increase from Q2 levels. Turning now to gross margin on product sales. Our second quarter product gross margin was 51.4% compared to 55.2% during the prior year. These results are in line with our expectations and prior Q1 commentary. The factors that we previously noted to be headwinds persisted in the quarter, including a year-over-year stronger euro compared to the U.S. dollar and inflationary pressures.

We continue to believe 2026 gross margins will be in the low 50s, although we may see some relief towards the end of the year should the impact of these external factors prove less significant than currently expected. Moving down the income statement, in terms of expenses by category, SG&A increased 8% due to slightly higher costs across a variety of functions with no predominant contributing R&D expenses, on the other hand, declined 24%, reflecting lower development costs in the INT200 following the US PMA submission, as well as the reduced work on government-funded related projects during the quarter, namely the completion of the FDA efforts, which concluded in 2025. As a result, government-funded R&D expenses accounted for 27% of total R&D spend. reversal of the trend experienced for the past several quarters. As we look ahead, we expect government-funded R&D expenses to increase as a percentage of total R&D spending, and, as mentioned earlier, we expect a corresponding increase in government contract revenue. Let's now turn to the bottom line and non-GAAP adjusted EBITDA results. For Q2 2026, GAAP net loss attributable to CERES continued to show year-over-year improvement at $2.9 million compared to a net loss of $5.7 million in Q2 of 2025. As an organization, we're committed to achieving GAAP profitability and believe we have line of sight to achieving that objective.

On a non-GAAP basis, adjusted EBITDA for the second quarter totaled $3 million, marking our ninth consecutive quarter of posting positive adjusted EBITDA. our third consecutive year of positive adjusted EBITDA results. Turning to cash flows for the quarter, cash used in operations was $2.7 million, driven primarily by increased inventory levels in support of our expected revenue growth. With the increased flexibility of our new revolver, we have offset these operating cash flow investments with advances under the revolver, and we'll look to utilize that facility when appropriate. With that, let me pass it to Vivek for some closing comments. Thank you, Kevin.

Before we open the call for questions, I would like to offer some thoughts as I conclude my first month as CEO. Although I have been at Sturz for nearly a decade, the past month has given me an even broader appreciation for the quality of our team, the value of our technology, and the exciting opportunities in front of us. Solid top line growth, meaningful pipeline progress, and improving financial strength all reinforce my confidence in our business. My conversations with employees, customers, and clinicians only deepen my conviction in our mission and our ability to realize it. talented people, differentiated technology, and a compelling vision. The future is Cirrus' bright and I believe we are uniquely positioned to positively impact global healthcare. Each day, we take important steps towards expanding patient access to safer blood while creating meaningful long-term value for stakeholders. Thank you very much for joining the call today.

We are grateful for your continued support.

Operator, please open the call for questions. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 1-1 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Josh Jennings with TD Cowan. Your line is open.

Hi, good afternoon. Thanks for the questions. Great to see you. Another double-digit revenue growth quarter. Wanted to start with a question on IFC, you know, EXCELLENT PERFORMANCE OFF OF THE MOST CHALLENGING COMP OF THE YEAR ON A REVENUE DOLLAR BASIS. to be helping with the momentum there here in 2026. You described a hospital assessment by a Northeast Center. And I'm just curious, I mean, is that still the common adoption route where individual centers will have to run their own kind of independent, study of IFC or is there more of a blend, especially with BCA in play? I'm just curious on how long you're seeing kind of contracts or agreements take place.

to be put in place here in 2026. Hey Josh, thanks for the question and thanks to you for the kind remarks about the progress. with IFC we're certainly really excited about it as you can imagine there isn't one single pathway in terms of hospital or blood center adoptions the thing that That really does help us now that we're migrating to the kit model as we can take advantage of not only the expanded reach of the blood center sales and marketing team, but also the contracts they have in place across those hospitals to provide blood products. And so we're not in the business of negotiating contracts. directly with the hospital. So that accelerates the process considerably. Most hospitals do not run their own in-house comparison of whether it's ISD versus cryo-AHF or versus fibrinogen concentrate. So it's typically not what we see in those hospitals. was what was encouraging, it was validation to see that when that was done, how ISD compared so favorably and sort of validated some of our original hypotheses in terms of both clinical value and then value to non-clinical decision makers. So we're encouraged by that and we think the continued collaboration with BCA and other blood centers will allow us to do that. us to scale and provide access to ISC even more quickly.

Excellent. Thanks for that. And I wanted to just ask about the U.S. Intercept Platelet franchise and the U.S. Platelet market, you know, BCA. the collaboration is a tailwind is our understanding. Can you quantify any kind of the contributions from that arrangement so far in the first half of 2026? And maybe just the status of, I guess the blood supply, I think there's been red blood, the Red Cross has made some announcements about some need for more donors to step up in the past month. Just wanted to sadly check in the outlook for the second half for the U.S. Intercept Playbook franchise.

Yes, no, of course. Thanks again for the questions, Josh, and for your interest in our business. As we've indicated in the past, if you think about the U.S. platelet market, there's a bit of a bimodal distribution. In roughly half of the market, we have north of 90% share, if you think about our penetration, and then the other half. the remaining half are penetrations of roughly 30% or so. And that half where relatively speaking, we're under penetrated, those are principally BCA member blood centers. And so the agreement that we have in place gives us to some degree a hunting license and opportunity to go in and develop advocates and we made really good progress in the first half of this calendar year and I really am encouraged by the level of collaboration and partnership with BCA. To your question about the Red Cross and blood shortages, we haven't seen that flow through In terms of our volume, certainly, you know, we, anything that can be done to raise awareness of the critical need for blood and encourage people to donate, we're highly supportive of. But in terms of impact on platelet demand, either in the first quarter or anticipated men on a going forward basis, we have not yet.

yet seen that impact. Appreciate the answers. Thank you.

Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1 1 on your telephone. One moment. Our next question is a follow-up question from Josh Jennings with TD Cowan. Your line is open.

Thanks for taking the follow-ups. I also wanted to ask, I cut my question list short, but just on the international platelet franchise and maybe two elements to the question. First, just the IMT200 illuminator kind of penetrated. you know, how much is left in the MEA. And then you made some comments about interest from Asia-PAC at a conference that we did just give us an update on the outlook for potentially getting intercept products into China, Japan, and other Asia-Pac countries.

Sure, I'd be happy to answer that, Josh, and maybe starting with Asia Pacific. We were recently in attendance at the International Society of Blood Transfusion meeting, which was held this past June in Kuala Lumpur in Malaysia. And during that meeting, we also had the opportunity to meet with our partners in the United States our joint venture partner in China. And I was very encouraged by not only their enthusiasm for technology, the progress we're making in terms of gathering in vitro data to order recent missions, the NMPA, but the underlying clinical need and the value that Intercept can bring in China, validated that in terms of their channel checks and their, you know, understanding of the market. So obviously, at the end of the day, we've got to get back on schedule with NMPA and get through the regulatory process. But I'm confident that the clinical applicability for that Chinese patient population is going to be very meaningful. Similarly, I had the opportunity to speak with executives from the Japanese Red Cross.

That's another market we believe where our product has a great deal of clinical utility and could be a component driving growth sort of later in the strategic planning period. You know, I mentioned the call, if you look at relative penetration rates, we're sub 1% across the Asia Pacific region, and yet the need for safe blood there is as significant as is in any other part of the world. So as you think about reasons why we have conviction on our ability to deliver durable double-digit growth for the foreseeable future, it's just continuing to execute where there are opportunities. So whether it's domestically with ISC, continued penetration in NAIA with plateless plasma and the INT. and then over time, stepping into emerging markets, especially as the library of real-world clinical evidence for intercept continues to grow and to strengthen. Specifically, kind of turning back to the EMEA marketplace, you know, one thing that we had mentioned too, that serves as real validation of our efforts in our work internationally, as we announced the four-year contract with EFS. They were really the first major blood surges of scale to go to 100% intercepted option. And as you well know, they're among the most diligent with respect to tracking hemovigilance data, reporting out on that, and demonstrating that their safety measures are in fact operating anticipated.

And so not only is this an important commercial contract, but I'd argue more importantly, it's real clinical validation of our technology from one of the most respected blood services in the world. A big component of that contract too is deployment of the INT200. And so that'll be taking place over the next in the next couple of years across France. We still have a ways to go in terms of INT 200 deployment and it also serve as a foundational device for international and global expansion going forward. So we see a lot of runway with that technology as tangible evidence that we're innovating investing in this space. And as noted, we recently submitted the PMA for platelets to the US FDA. So we continue to make good progress in terms of getting that technology out.

But thank you, Josh. Appreciate your interest and thanks for your question.

Absolutely. Thank you. Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1 1 on your telephone. And I'm not showing any further questions at this time, and as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good day, and thank you for standing by. Welcome to the Cerus Corporation First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

Now it's my pleasure to hand the conference over to Tim Lee, Head of Investor Relations. Please proceed.

Thank you, and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.cerus.com.

With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Vivek Jayaraman, Cerus' Chief Operating Officer and incoming President and Chief Executive Officer; and Kevin Green, Cerus' Chief Financial Officer. Cerus issued a press release today announcing our financial results for the first quarter ended March 31, 2026, the company's recent business highlights and outlook. You can access a copy of this announcement on the company's website at www.cerus.com.

I'd like to remind you that some of the statements we'll make on this call relate to future events and performance rather than historical facts and are forward-looking statements.

Examples of forward-looking statements include those related to our future financial and operating results, including our 2026 product revenue guidance and our expectations for product gross margin, non-GAAP adjusted EBITDA performance, P&L leverage and our government reimbursed R&D expenses and corresponding revenue, expected future growth, the potential for us to achieve GAAP profitability, the availability and related timing of data from clinical trials, our mission to establish INTERCEPT as the global standard of care, anticipated regulatory submissions and milestones, commercial expansion prospects, projected market opportunities for the INTERCEPT Blood System, including for ISC demand expectations with respect to our group purchasing agreement with Blood Centers of America and our multiyear agreement with the French National Blood Service, our potential platelet opportunity in Germany, the anticipated impact of tariffs and ongoing inflationary pressures and related regulatory effects of our business and other statements that are not historical facts.

These forward-looking statements involve risks and uncertainties that can cause actual events, performance and results to differ materially. They are identified and described in today's press release and our slide presentation and under Risk Factors in our Form 10-Q for the quarter ended March 31, 2026, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements.

On today's call, we will also be discussing non-GAAP adjusted EBITDA, which is a non-GAAP financial measure. Non-GAAP adjusted EBITDA should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. For a reconciliation of non-GAAP adjusted EBITDA to net loss attributable to Cerus Corporation, the most comparable GAAP financial measure to the extent reasonably available, please refer to today's press release and the slide presentation available on our website.

We will begin today with opening remarks from Vivek, followed by Kevin to review our financial results and lastly, closing remarks from Obi.

Now it's my pleasure to introduce Vivek Jayaraman, Cerus' next President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone. We appreciate you joining us today. At Cerus, our mission is clear: to expand access to safe blood for patients around the world. As we enter 2026, we are focused on delivering against that mission while executing on 3 core priorities: driving sustainable double-digit growth, advancing innovation, and strengthening our financial foundation.

Our first quarter results reflect disciplined progress across each of these areas and reinforce our confidence in the path ahead. 2026 is off to a great start with strong first quarter results and increasing confidence in our sales outlook for the full-year. In the first quarter, product revenue, which reflects our core commercial business was $53.7 million, up 24% compared to the first quarter of 2025. This performance was driven by continued strength in our global platelet franchise and also accelerating demand in our U.S. IFC business.

Based on our better-than-expected start to the year as well as our growing conviction in the underlying demand for INTERCEPT, we are raising our full-year 2026 product revenue guidance to $227 million to $231 million. In addition, we are raising full-year IFC revenue guidance to $22 million to $24 million. This updated guidance represents total year-over-year product revenue growth of 10% to 12% compared to 2025 and approximately 30% to 40% for IFC.

From a top line perspective, North America accounted for nearly 70% of first quarter product revenue as our U.S. platelet franchise continues to serve as a foundation of our overall business. We are deeply grateful to our key customer partners, like the American Red Cross, who continue to place their trust in INTERCEPT. First quarter North American platelet volumes and treatable doses increased 6% and 9%, respectively, when compared to the first quarter of 2025. This gain outpaced the overall historical market growth rates. Looking forward, we anticipate further platelet penetration as we continue to expand adoption among blood centers and hospitals.

A key enabler of this growth is our group purchasing agreement with Blood Centers of America, whose members represent approximately half of the U.S. blood supply. Since the agreement took effect on January 1, we have been focused on execution, educating members through targeted engagement, supporting implementation and expanding both existing and new customer relationships. We are already seeing early signs of traction, including increased activity at existing Cerus customers and new agreements to adopt PR platelets at BCA members who have yet to utilize INTERCEPT.

Internationally, our EMEA business delivered another strong quarter, led by performance in France and Belgium. We continue to view the region as an important contributor to both near and midterm growth. The recently signed multiyear contract with the French Blood Establishment or EFS, enhances visibility into our forward outlook. We are deeply grateful to EFS for their continued trust in INTERCEPT. France was the first country of scale to fully adopt INTERCEPT to safeguard their platelet supply, and this contract renewal is a strong confirmation of the value they see in INTERCEPT.

In Germany, progress on the INITIATE study continues to build the clinical and operational foundation for broader adoption over time. While we remain encouraged by the global opportunity, we are also navigating near-term challenges in certain regions. In the Middle East, ongoing conflict has created logistical complexities that may impact shipment timing. That said, we are actively managing the situation and believe that potential disruptions can be mitigated by strength in other parts of the business. Importantly, we remain confident in our long-term growth prospects in that region, and these near-term challenges were considered when deciding to increase our product revenue guidance for the full-year.

Innovation remains central to how we expand access to safe blood and drive long-term growth. A key example is the continued successful rollout of our next-generation INT-200 illuminator across international markets, where we are seeing encouraging adoption and operational performance. Domestically, we are on track to submit our PMA for the INT -100 to the U.S. FDA this quarter, which represents an important milestone in bringing this technology to the U.S. market.

Innovation is also evident in our U.S. IFC franchise, where demand continues to increase, supported by a growing number of blood centers manufacturing IFC, deeper utilization within hospitals and increasing awareness of its clinical and logistical advantages, particularly the highly valuable combination of immediate availability of fibrinogen alongside 5-day post- shelf life. As with our platelet franchise, we are seeing a marked increase in ISC engagement and adoption from BCA member blood centers under our new agreement.

As a result, ISC demand in the first quarter measured by therapeutic dose equivalents increased approximately 120% year-over-year with revenue growth approaching 90%. We are seeing a continued shift towards kit-based sales, which supports both operational efficiency and long-term margin expansion. Taken together, these results reflect a business that is executing with focus, expanding access to safe blood, delivering sustainable double-digit growth, advancing innovation and strengthening our financial profile.

While there is much work to be done, we are encouraged by the progress we are making and confident in the opportunities ahead. At the end of the day, the most important point to note is that we were able to meaningfully expand access to safer blood in the first quarter of 2026. Thank you for your continued interest in Cerus.

I'll now turn the call over to Kevin to review our financial results in more detail.

Thanks, Vivek. You've just heard Vivek speak to 2 of our 3 pillars: growth and innovation. Today, I'll focus my comments on our third pillar, financial strength. First quarter financial tables are included in today's press release. As such, I'll focus most of my comments on key takeaways and insights. In addition to the 24% product revenue growth that Vivek mentioned, total revenue, which includes government contract revenue, increased 23% compared to the prior year results.

By geography, product revenue growth was broad-based with both North America and EMEA reporting year-over-year gains of 20% or more. In EMEA, demand for our platelet product was the primary contributor, driven by both increased kit volumes and pricing discipline. As reported, EMEA revenues grew by 28%. Of that reported growth, favorable foreign currency exchange rates benefited EMEA revenue by approximately 11%. On a consolidated basis, FX provided a benefit of approximately 3% when compared to Q1 2025.

In North America, growth was led by higher U.S. IFC sales as well as increased demand for platelet kits in both the U.S. and in Canada. Speaking to IFC, which at this point is exclusively a U.S. product, first quarter revenue was $5.7 million compared to $3 million during the first quarter of 2025.

Switching now to government contract revenue. Reimbursement for government-related R&D expenses increased year-over-year. As I noted on our Q4 earnings call, we still expect full-year government-related R&D expenses and the corresponding reimbursement, which we recognize as government contract revenue to taper this year compared to 2025.

Turning away from the top line to gross margin. Our first quarter gross margin was 52% compared to 58.8%. We call that first quarter 2025 margin is an unusually tough comp and was artificially high by approximately 2% due to a onetime true-up from the capitalization of inventorable charges and the nonrecurring release of previously accounted for favorable variances. With that said, the factors that we forecast to be headwinds in Q1 have proven to be slightly less impactful than we originally predicted.

Nevertheless, these headwinds have been persistent, and we expect that to be the case for the remainder of the year. These referenced headwinds include inflationary pressures with shipping and fuel costs expected to persist, the impact of foreign currency exchange rates and the ongoing tariffs. Given the current trends, we continue to believe 2026 gross margin will be in the low 50s range, although we may see some relief should our assumptions on external factors prove conservative.

Moving down the income statement. Operating expenses for the first quarter declined 7% compared to the first quarter of 2025. One of our key areas of focus supporting financial strength is disciplined control of operating expenses while growing revenue. To that end, SG&A expenses were largely consistent with the prior year, reflecting our ongoing focus to drive revenue growth without the need for proportional incremental investments in SG&A. R&D expenses declined year-over-year due in part to lower development costs of the INT-200 as we approach our planned U.S. PMA submission.

Importantly, as you can see from this slide, Cerus funded development programs have been trending down as a percentage of total R&D expenses. Similar to SG&A, we've been making a concerted effort to generate leverage by focusing relatively more R&D spend on government-reimbursed initiatives compared to those that Cerus funds.

Let's now turn to the bottom line and non-GAAP adjusted EBITDA results. For Q1 2026, GAAP net loss attributable to Cerus continued to show year-over-year improvement to a modest level of $1.6 million. As an organization, we are committed to not just growing non-GAAP adjusted EBITDA, but achieving GAAP profitability. On a non-GAAP basis, adjusted EBITDA for the first quarter totaled $4 million and marked our eighth consecutive quarter of posting positive adjusted EBITDA.

We continue to match the strong commercial results with disciplined expense management and deliver the inherent leverage in our business. Looking ahead, for the balance of 2026, we expect to deliver our third consecutive year of positive adjusted EBITDA results.

Turning to the balance sheet and associated cash flows. We ended the first quarter with cash and equivalents of $80.4 million compared to $82.9 million at the end of 2025. Cash used from operations was $3 million compared to $800,000 during the same period of the prior year. Cash used during the first quarter was primarily tied to working capital investments, specifically increased inventory levels in support of the expected revenue growth as suggested by our increased guidance.

With all of this said, this progress has resulted in a stronger business. Since 2019, product revenue has grown at a compound annual rate of 18%. We've used that growth to expand patient access to INTERCEPT in new geographies and to continue investing in our new wave of innovation, including INTERCEPT fibrinogen complex, the new INT-200 device and INTERCEPT red blood cells.

At the same time, we've managed the business with discipline. Since 2019, operating expenses have increased by less than 3% annually, demonstrating the operating leverage in our business as we continue to scale. As a result, net loss has narrowed meaningfully during the period from 2019 to now, and our adjusted EBITDA has consistently grown over the last few years. Accordingly, we have line of sight into GAAP profitability.

With that, let me turn it over to Obi for his closing comments.

Thank you, Kevin, and good afternoon, everyone. I want to thank all of you for joining us today for what will be my final earnings call as Cerus' President and CEO. As I reflect on 15 years in this role and more than 30 years with the company, I do so with deep gratitude to our shareholders, to our blood center partners, to our employees and to the clinicians and patients who have believed in our mission. The advocacy for our pathogen inactivation technology from our largest and longest-term blood center customers like the French EFS, Canadian Blood Services, the Swiss Red Cross, One Blood and especially the American Red Cross mattered meaningfully over the company's 35-year-old history.

From the beginning, our vision has been to make INTERCEPT the global standard of care for transfused blood components and to establish Cerus as a leader in transfusion medicine innovation. When I became CEO 15 years ago, Cerus was still in the early stages of translating that vision into broad clinical and commercial impact. Earlier in 2006, when we took back the global commercial rights to INTERCEPT from Baxter and built our European organization to commercialize the platform in Europe and beyond, the clinical experience with INTERCEPT amounted to fewer than 10,000 platelet units transfused.

Today, INTERCEPT is available in more than 40 countries. We have secured 4 FDA PMA approvals in the United States, established INTERCEPT as the standard of care in multiple markets, including the U.S., France and Switzerland and shipped kits equivalent to treating more than 22 million blood components. That is meaningful progress for Cerus and more importantly, it's meaningful progress for patients and healthcare systems around the world. Yet, the underlying need remains as compelling as ever.

Safe and available blood is one of the fundamental requirements of modern health care. Patients undergoing cancer treatment, trauma care, complex surgery, childbirth and chronic transfusion support all depend on blood products that are both safe and ready when needed. That is the mission we share with our blood center customers every day. It is also why our work has impact far beyond our company, advances in blood safety and availability strengthen care delivery across the global health care system.

Today, Cerus is better positioned than at any point in our history to help meet that need. We have built a global commercial footprint, a maturing INTERCEPT portfolio designed to address all major transfused blood components and an organization with the experience and discipline to execute. While we have made meaningful strides towards making INTERCEPT the global standard of care, I believe the opportunity ahead remains substantial.

That is especially true as we advance the INTERCEPT red blood cell program. 2026 is an important year for the RBC program with major regulatory and clinical milestones ahead in the second half. The Phase III RedeS study, which includes the broader chronic transfusion experience required for an FDA PMA has completed enrollment and is expected to read out in the fourth quarter.

As a reminder, the RBC program previously met its primary endpoint in the Phase III ReCePI study and the acute transfusion data from that study were included in the CE Mark submission, which is now under French ANSM competent authority review for potential approval in Europe. We believe INTERCEPT red cells remains one of the most important opportunities in blood safety and success there could materially expand both our clinical impact and our long-term growth potential.

For those of you who have followed Cerus over the years, you know that transfusion medicine is careful and slow to adopt innovation. One of the defining moments in Cerus' history was the FDA's 2019 guidance on reducing the risk of transfusion-transmitted bacterial infections with an implementation deadline in October 2021. That guidance helps accelerate INTERCEPT adoption in the U.S. and influence many other markets that look to the FDA as an important benchmark.

It was a reminder that durable change in the field is possible and that when regulatory standards evolve, the impact on patient care can be significant. We have built a strong foundation that supports an enduring company, a clear mission, differentiated technology, deep customer relationships, global regulatory and commercial capabilities and a pipeline with meaningful growth drivers still ahead. That foundation is what gives me such confidence in Cerus' future.

Over the last 3 decades, we have built an exceptional team united by the opportunity to protect the blood supply and help ensure that life-saving transfusions are available for patients when they are needed most. For many of us, this mission has always been personal. We remember the devastating impact that HIV and hepatitis had on the blood supply in the 1980s and 1990s, and we were determined to help create a different future, one in which transfusion-transmitted infections would pose far less risk in the face of new pandemic threats and blood centers and hospitals would be better equipped to serve patients safely and reliably given the positive impact of INTERCEPT on blood donor deferrals.

It has been the privilege of my career to help build Cerus into a lasting purpose-driven company, and I am very pleased to pass the baton to Vivek. He is a bold, team-first leader who will build on the strong foundation we have established, continue advancing our patient-first mission and lead Cerus through its next phase of growth, innovation and value creation for all stakeholders.

With that, let me turn the call over to the operator for questions.

[Operator Instructions]. The first one comes from the line of Josh Jennings with TD Cowen.

Congratulations, Obi, on moving into your next chapter. It's been a long resilient run by you and you're leaving the company in a position of strength here looking at these 1Q results and being on the cusp of some RBC approvals globally. We'll miss you, but congratulations, Vivek, on your new CEO seat.

I'd like to start just with -- just asking about guidance. It seems like the uptick is -- or it looks like the uptick is being driven mostly by IFC strength, but also by INTERCEPT platelet strength. Maybe just talk about the outlook for the U.S. INTERCEPT platelet franchise versus OUS INTERCEPT platelet franchise and where you're seeing more upside relative to the outlook at the beginning of the year.

Yes. Thanks a lot, Josh, and thanks for the kind comments to start. Vivek, do you want to handle that question?

Yes, I'd be happy to. Josh, echoing of these statements, thanks for the kind words, very much appreciated and certainly appreciate your continued interest in our story.

The thing that's most encouraging to me about Q1 results is that the strength of the performance is really broad-based, both globally and across product category. You're right to point out that IFP performed quite well and was a significant part of our revised upward guidance. As you also correctly pointed out, platelets is a big component of that as well. If you recall, late last year and earlier this calendar year, we pointed to the BCA agreement in the U.S. and the opportunity to have effectively a hunting license in about half of the U.S. market where relatively speaking, PR platelets were underpenetrated. We saw good progress in the first quarter in that section of the market.

We also saw strength with platelets internationally as evidenced by what Kevin spoke to in terms of strength in our EMEA organization. Then we also highlighted the renewed contract with the ESS. As we think about the outlook for the balance of the year, we see continued solid platelet growth in both geographies, continued expansion in the U.S. under the umbrella of the BCA agreement as well as continued adoption, both in growth areas internationally, but then also in some of our core markets where we're seeing a recommitment for customers. Really, there's a lot of enthusiasm coming out of first quarter results and the general qualification of demand in the marketplace.

Maybe just clearly, the BCA agreement is bearing early fruit here that may get stronger over the course of the year. Just within U.S. IFC and BCA blood centers, I think you commented, Vivek about marked increased demand from BCA blood centers. Any way you could just build out, provide a little bit more detail and whether you're seeing kind of new IFC customers coming on and how that outlook drove the guidance uptick for the IFC franchise.

Yes, of course. Yes, certainly happy to provide a bit more color there. There are multiple factors at play, Josh, as I'm sure you can appreciate. The first is we're actively in the process of moving our historical production partners under the BCA agreement. As we do that, they're able to take advantage of the resource sharing model that BCA utilizes. Their outlets in terms of potential both blood center customers and ultimately hospital customers continue to grow.

In addition to that, we've had BCA members who weren't previously IFC manufacturers reach out to us and initiate the process of beginning IFC manufacturing. Then fundamentally, as we've talked about previously, as we transition from selling the finished therapeutic to the kits to blood centers, that enables us to leverage and partner with the sales and marketing channels up to blood centers, thereby significantly expanding our reach and our ability to engage with more hospitals.

All of those factors come together and effectively create an environment where we're just reaching out to more hospitals, engaging a broader number of clinicians about IFC, and that's all occurring while the data we collect and the user experience on the product continues to grow. It's been really encouraging, but still very much early days. I mean we're proud of the Q1 results and the outlook, but I'll remind you that we're still single-digit share in terms of market penetration. There's a tremendous amount of upside in this market.

Congrats on a strong start to the year.

Our next question comes from the line of Bill Bonello with Craig-Hallum.

I also wanted to say congratulations to Obi and Vivek. In terms of questions, so you gave some timing on the expected regulatory catalysts. I'm wondering if you could maybe give us some sense of the time line from the events that you talked about today until we reach revenue generation and maybe some of the key milestones along that pathway to commercialization.

Yes. Thanks for the question, Bill. I presume you're talking about red cells and not the INT-200, which we will be filing for PMA imminently here in the United States.

Talking about them both.

Well, I'll start with red cells, and I'll let Vivek cover INT-200 because we're also really excited about that. For the near term, the milestones through the remainder of the year, we clearly are very focused on the ANSM review of the red cell program, and we're happy to announce this week, we actually completed our recertification audit with TUV. That's exciting. We have 2 additional milestones for the CE Mark. One is the ANSM review and then ultimately, an audit of the manufacturing facility.

Then as far as the pathway to ultimate revenue there, we would -- once we have an anticipated approval of the red cell CE Mark, we move into sort of an early launch of that product with an iteration of the device to ultimately improve the overall scale-up and operational efficiency of processing red cells. That's still a few years out, but the goal right now is to just focus on getting that CE mark so that we can launch the product.

Vivek, do you want to cover the INT -200 in the U.S.?

Sure. I'd be happy to. Thanks for the question, Bill. As we indicated earlier, we're moving towards a submission to the U.S. FDA, PMA submission for the INT -200 device this quarter, in the second quarter of 2026. We would anticipate a launch in the first half of '27. I anticipate similar to what we're experiencing in international markets that there'll be a lot of enthusiasm for that launch. It's clear evidence of our commitment to innovation in this space, which I think differentiates us from a lot of our peers, and it will serve ultimately as the device foundation for the U.S. market. hat is an upcoming catalyst and one that we're very excited about given the positive receptivity to the Illuminator in international markets.

Just as a follow-up to that, maybe just give us some thoughts on sort of the implications in terms of business, whether it's penetration or pricing or simply this being an enabler of retention in terms of launching that INT -200.

There's a significant market in the U.S. with respect to our installed base of illuminators, and that will be an area of focus for us there. Beyond that, as we think about de novo growth opportunities, as I mentioned earlier in response to Josh's question, there are some customers in the U.S. who have yet to begin their journey with us in terms of adoption of the INTERCEPT technology and part of that process will be equipping them with Illuminator that will be the -- most likely the INT-200 device. While we're not providing specific product level guidance in terms of our device placement, what I can say is a significant enabler in terms of serving as the underlying foundation for our business.

Beyond that, too, as we think about, as we stated before, the sort of demonstrated investment in innovation and commitment to continuing to advance research and device development in this space, we're positioned very uniquely relative to our industry peers in this area because we continue to invest in R&D research and ultimately bring products to market that meet customer needs and enhance their operational efficiency. We're very much looking forward to introducing that product, and you'll hear more about our plans for U.S. commercialization certainly post-submission of the PMA and then as we approach our launch date.

[Operator Instructions]. Our next question is from Mark Massaro with BTIG.

Obi, it's been great working with you, and congrats as you transition into the Chairman role and Vivek, congrats on your well-deserved promotion to CEO. All right.

Moving into the business, I wanted to get a better sense on the guidance because when I look at the IFC business, you grew 90% in Q1 here. The 2026 guidance for IFC has been raised to approximately 30% to 40%. I'm just trying to get a sense about the seasonality of this business. It looks like in Q3 last year, it was down sequentially. I recognize there's probably lumpiness as you roll this out. Can you just walk us through the assumptions as to just the delta between the really strong growth in the start of this year and your full-year growth outlook for IFC?

Yes. Thanks for the question, Mark, and thanks for the comments to start as well. Vivek, do you want to cover that?

Yes, I'd be happy to. Mark, thank you for the kind words about the org transition, much appreciated. You're right to point out that the business is a little bit lumpy as we're in this early growth stage. I just want to emphasize that our conviction around continued growth and the fact that it's still we're a single-digit market share player and feel that there's a tremendous amount of headroom. I don't want any of that enthusiasm to be lost as we talk about some of the specifics about the current position itself.

I'll remind you that a year ago, there were some anomalies in terms of our posted results. If you recall, we deferred from an accounting standpoint, some revenue recognition in the second quarter as we were sort of starting the process of transitioning from a finished therapeutic sale to a kit sale. That transition continues and really, we're driving towards being fully kit sales ideally by the end of this calendar year. That may bleed a little bit into 2027.

We've been talking about really unit volume from the standpoint of therapeutic dose equivalents as opposed to the revenue growth. You'll see that current transition -- you'll see that transition accelerate through the balance of 2026. That was part of what's factored into the guidance for the full-year. Obviously, we took it up pretty significantly from original guidance of $20 million to $22 million for the full-year now to $22 million to $24 million. Underlying growth remains strong. There'll probably be some period-to-period idiosyncrasies just given that transition and the nature of our business model.

As we think about blood centers manufacturing IFC, hospital starts, some of the things that we're paying attention to, all of those trend lines are pretty strongly positive. Hopefully, that gives you a little bit more color. Certainly happy to answer any more questions about the IFC business as you have them.

Maybe switching gears to red blood cells. I think I heard you talk about the transition to ANSM, and it seems like we're now getting close. I think you're on the clock. As we put these pieces together, I think you've talked about a readout in Q4 of '26. Would it be reasonable to think that CE Mark could occur shortly after that -- the readout time period? I'm sort of coming in somewhere between either late Q4 or first half of '27, but I just wanted to get your sense on the timing of CE Mark.

Yes. Thanks, Mark. I think right now, it's probably safe to assume that it will be in the first half 2027 approval time line, just given that we don't know what questions ANSM will ask and the time line for our responding to those questions. I think that's the timing you should be looking at. I mean I think we'll have a lot more clarity through the year-end. I think specifically as we think about our Q3 earnings call, not only will there be the Phase III RedeS study readout in that time frame, but also some increased clarity around the ANSM timing. That's the way I think you should think about it.

Then I know probably not core to the thesis or anything, but I figured I would ask if you're still planning to pursue regulatory approval for platelets in China and maybe any update on that process?

Yes. Thanks, Mark. Yes, Vivek, do you want to cover that?

Yes, I'd be happy to. Mark, it's a great question. We absolutely continue to be excited about the opportunity in the China market. In fact, we will be meeting with our joint venture partner, ZBK, at the upcoming ISCT meeting, which is scheduled to take place in Kuala Lumpur in mid-June, and so part of what we're continuing to refine is our strategy to collect in vitro data that's requested in the Chinese market for resubmission to the NMPA.

In parallel with our continued channel checks and clinical engagement, it sort of continues to validate the excitement for and the need for pathogen activation in that marketplace. It's probably an opportunity that will realize in terms of revenue generation towards the latter part of this decade, but it's very much a market opportunity that we're working in partnership with ZBK under our joint venture agreement to advance.

Thank you. Ladies and gentlemen, this will conclude our Q&A session and conference for today. Thank you all for participating. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cerus Corporation Fourth Quarter and Full Year 2025 Earnings Conference Call. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Tim Lee, Cerus Head of Investor Relations. Tim, you may begin.

Thank you, and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.cerus.com.

With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Vivek Jayaraman, Cerus' Chief Operating Officer; and Kevin Green, Cerus' Chief Financial Officer.

Cerus issued a press release today announcing our financial results for the fourth quarter and full year ended December 31, 2025, the company's recent business highlights and outlook. You can access a copy of the announcement on the company website at www.cerus.com.

I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results, including our 2026 product revenue guidance and our expectations for product gross margin, non-GAAP adjusted EBITDA performance, P&L leverage and our government reimbursed R&D expenses and corresponding revenue, expected future growth, the potential for us to reach GAAP profitability, the availability and related timing of data from clinical trials, our mission to establish INTERCEPT as a global standard of care, planned regulatory submissions, commercial expansion prospects, projected market opportunities for the INTERCEPT Blood System, including for IFC demand, expectations with respect to our group purchasing agreement with Blood Centers of America, our potential platelet opportunity in Germany, the anticipated impact of import tariffs and ongoing inflationary pressures and other statements that are not historical facts.

These forward-looking statements involve risks and uncertainties that can cause actual events, performance and results to differ materially. They are identified and described in today's press release and our slide presentation and under Risk Factors in our Form 10-K for the year ended December 31, 2025, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements.

On today's call, we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA and the percentage of growth in EMEA and total product revenue, excluding the impact of changes in foreign currency exchange rates. These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures to the extent reasonably available, please refer to today's press release and the slide presentation available on our website.

We'll begin today with opening remarks from Obi, followed by Vivek to discuss recent business highlights, and Kevin to review our financial results and expectations for 2026 and lastly, closing remarks from Obi.

And now it's my pleasure to introduce Obi Greenman, Cerus' President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone, and thank you for joining the call today. At Cerus, we are dedicated to safeguarding the world's blood supply. Every day, patients around the world rely on safe blood from patients undergoing cancer therapy to sickle cell and thalassemia patients to surgical trauma. Blood's availability is foundational for health care systems.

Our INTERCEPT Blood System has been designed to prevent the risk of transfusion-transmitted infections and strengthen the safety profile and immediate availability of one of the most essential health care resources. Our mission is clear at Cerus to establish INTERCEPT as the global standard of care for all transfused blood components. In 2025, we made meaningful progress towards this goal. Based on kits sold, our blood center customers produced approximately 3 million INTERCEPT-treated blood components for patients in nearly 40 countries. We estimate that this has enabled roughly 600,000 patients to receive INTERCEPT-treated blood components over the course of last year. Put another way, every single minute, another patient somewhere in the world is benefiting from safer blood transfusion as a function of our technology.

As the market leader in pathogen and activation of blood components, we continue to invest in innovation, manufacturing, regulatory approvals and commercial expansion. In 2025, we received European CE Mark approval and commercially launched the INT200 device, our next-generation LED-based illuminator and a foundational element for our global growth into the next decade. Customer feedback on the INT200 operational improvements continues to be very positive and reinforces our leadership and innovation in the field of transfusion medicine. In the U.S., we are on track to submit our PMA application for INT200 expected in mid-2026.

Turning now to red blood cells, the most transfused blood component globally and our largest potential opportunity. In Europe, our regulatory submission has been under review at a notified body, TUV, which has completed its review of all the submission modules. The dossier is now being transferred to ANSM, the component authority for consultation and review of the active pharmaceutical ingredient. In the U.S., enrollment is complete, and we continue the patient follow-up in the RedeS study, our second Phase III clinical trial and expect to report top line results later this year.

Vivek and Kevin will walk through the commercial and financial details shortly, but at a high level, 2025 was a milestone year. disciplined execution, strengthened our financial foundation, positioning us to expand INTERCEPT adoption globally while continuing to advance our pipeline.

Before I turn the call over to Vivek, I wanted to thank and recognize the entire Cerus team. Without their hard work and dedication, none of the accomplishments I just outlined would have been possible.

With that, I would like now to turn the call over to Vivek to discuss our fourth quarter and full year commercial results, along with color on our outlook for 2026.

Thank you, Obi, and good afternoon, everyone. We finished 2025 on a high note with another quarter of strong performance across our global platelet franchise, continued positive traction with the international launch of our INT200 illuminator and increasing the momentum in our U.S. IFC business. Combined, these efforts resulted in record fourth quarter and full year product revenue. We entered 2026 with solid momentum and a clear runway for continued growth.

The U.S. platelet franchise continues to serve as the foundation for Cerus. INTERCEPT-treated platelets are the standard of care in the U.S., and we estimate our market share to be in the mid-60s. Furthermore, given progress in the fourth quarter, we believe we are well positioned for further penetration in this market.

A key contributing factor to our belief is the opportunity represented by the recently signed group purchasing agreement with the Blood Centers of America, or BCA. We finalized this agreement last December, and it went into effect on January 1 of this year. BCA is the largest blood supply cooperative in the U.S. with its member centers accounting for approximately 50% of the nation's blood supply.

While many BCA members are already INTERCEPT users, we estimate overall penetration within BCA is approximately 30%. We believe this agreement will help facilitate broader discussions across the BCA network, enable us to take advantage of their streamlined contracting process and leverage their supply chain network. Ultimately, we believe this will drive increased INTERCEPT adoption across the BCA network. We recently had the opportunity to present at the BCA Board of Directors meeting in Scottsdale, and I was very encouraged by the membership's enthusiasm for our agreement.

Internationally, our EMEA franchise delivered robust growth in the fourth quarter and the full year. We experienced strong double-digit growth in both platelet and plasma kit sales. In addition, the rollout of INT200 continues to go well with very positive customer feedback. Looking forward, the EMEA region contains attractive growth opportunities over both the near and medium term. One example is Germany, the largest market in Europe. As we announced in January, DRK Baden-Württemberg-Hessen, the largest blood center in Germany has started enrollment in the INITIATE study, a post-market Phase IV study designed to evaluate the routine use of pathogen-activated platelets utilizing the INTERCEPT Blood System. We believe Germany represents a $30 million annual platelet opportunity. We are excited to see the INITIATE study commence and believe that Germany can contribute more meaningfully to revenues as early as 2027.

Switching to IFC, customer demand continues to increase. As measured by therapeutic dose equivalents, demand increased by over 50% in the fourth quarter compared to the same period last year. From a revenue perspective, our IFC franchise grew by nearly 40% compared to Q4 of 2024. During the fourth quarter, nearly 70% of sales were in the form of kits sold to blood centers, up from approximately 50% in the prior year period. As we continue to shift our focus towards the kit model, we expect that nearly all IFC sales volume will be in the kit format by the end of this year.

Looking ahead, we believe the BCA agreement will further support IFC demand by leveraging the reach of member centers and integrating the existing IFC production partners into the BCA agreement. We have already received inquiries from multiple BCA member blood centers interested in initiating IFC manufacturing. As mentioned before, we are very encouraged by the potential of the BCA partnership.

In closing, 2025 was an excellent year for our commercial team. We meaningfully expanded access to INTERCEPT-treated blood products globally, and we entered 2026 with a tremendous amount of momentum across all of our product lines.

With that, I'll turn the call over to Kevin to review our financial results in more detail.

Thanks, Vivek. I'd like to thank you all for your interest in Cerus and for your time with us today.

Fourth quarter and full year financial tables are included in today's press release. As such, I'll focus most of my comments on key takeaways and insights as well as our product revenue guidance for 2026.

To begin, our total revenues for 2025 were $233.8 million and represented a record level for Cerus and were up 16% from 2024. As we preannounced in January, we reported record product revenue, which resulted in a 14% increase for both the quarter and the year, exceeding the top end of our $202 million to $204 million prior guidance.

Breaking down product revenue by geography. As you can see from this slide, Much of the growth in the quarter and for that matter, the full year were led by gains in EMEA, where we are seeing demand across both our platelet and plasma franchises as well as the early rollout of our new illuminator device, the INT200. As a reminder, we have an installed base of approximately 400 INT100s in EMEA, which we expect to replace completely over the next few years.

In North America, full year product revenue growth was driven by increased IFC sales and our strong platelet business.

Excluding the impact of foreign currency exchange rates, EMEA product revenue increased 25% in the fourth quarter and 14% for the full year. On a consolidated basis, FX provided a benefit of approximately 3% when comparing Q4 2025 to that of the prior year and a benefit of approximately 1.6% for the full year.

IFC product revenue during the fourth quarter was $4.2 million compared to $3 million during the fourth quarter of 2024, representing an increase of approximately 40%. For the full year, IFC product sales totaled $16.7 million compared to $9.2 million in 2024, representing growth of approximately 80%. With that said, the underlying volume demand for IFC increased roughly 110%. The difference between the reported revenue growth and demand growth is a result of the continued sales shift focus from selling finished IFC therapeutics directly to hospitals to selling kits to blood centers who produce IFC for their own hospital accounts.

Based on the robust sales momentum we delivered in 2025, we expect revenue growth to carry into 2026. And as such, today, we are reaffirming our 2026 product revenue guidance which we announced earlier this year, totaling $224 million to $228 million. This guidance represents a year-over-year increase of 9% to 11% compared to 2025 and does not take into account the effect of any potential changes to the tariff landscape. Included in our 2026 guidance range is expected IFC revenue of $20 million to $22 million representing year-over-year growth of approximately 20% to 30%.

Given the mix shift to kits, our IFC revenue guidance may underestimate the enthusiasm we are seeing for this product. We estimate we exited 2025 with IFC market adoption at around 7%. And by the end of the year, we believe our penetration rate could increase more than 50%. Furthermore, we are witnessing strong increased use of fibrinogen replacement therapies, suggesting the market for our IFC product is continuing to grow.

Switching now from product revenue. As you'll see, the reimbursements for government revenue covering our RBC programs and IFC development were up considerably this year. I'll address our expectations for the 2026 level of these activities later on. For the time being, let's now turn to product gross margin.

For the fourth quarter, product gross margin was 51.5% compared to 53.9% in the same period last year. Higher IFC therapeutic production costs, the impact of import tariffs and ongoing inflationary pressures impacted product gross margin compared to the prior year period. We expect the impact of import tariffs and to a lesser extent, inflationary pressures to continue. The tariff landscape continues to be dynamic, and we cannot currently predict the ultimate tariff impact on our 2026 margins. However, assuming status quo, we expect 2026 product gross margin will continue to trend around the low 50% range. We could see quarterly variability due to a variety of factors.

Moving down the income statement. Operating expenses for the fourth quarter and full year increased 7% and 10%, respectively, as we continue to deliver leverage in the P&L. Focusing on R&D expenses for a minute, the year-over-year changes were driven primarily by increased development costs associated with our red blood cell program, mainly reimbursed by BARDA, as well as costs for the pursuit of new PMAs driven by our planned submission to the FDA for premarket approval of the INT200.

I would note that our 2016 BARDA contract will expire in September and with much of the work tied to our Phase III RedeS study now behind us, we expect government reimbursed R&D expenses as well as the corresponding revenue referred to earlier, to taper over the course of the year.

Let's now turn to the bottom line and non-GAAP adjusted EBITDA results. For Q4 2025, GAAP net loss attributable to Cerus continued to approach equilibrium at a modest $2.2 million. For the full year, GAAP net loss attributable to Cerus was $15.6 million, down 25% from the prior year. We will continue our drive toward GAAP profitability as we move forward.

On a non-GAAP basis, adjusted EBITDA for the fourth quarter totaled $3.4 million and marked our seventh consecutive quarter of posting positive adjusted EBITDA. For the full year, we are pleased to report our second consecutive year of positive adjusted EBITDA totaling $9.5 million.

This performance reflects the strong execution by our organization with the stated growth in our top line, combined with the disciplined expense management and continued leverage inherent in our business model, which we have demonstrated over the course of 2025.

Looking ahead now to 2026, we expect our third consecutive year of positive adjusted EBITDA, driven by the anticipated product revenue suggested by our guidance, gross profit dollar growth, and the continued leverage we expect to generate as a result of our business model and our continued scrutiny of operating expenses.

Turning to the balance sheet and associated cash flows. We ended 2025 with almost $83 million of cash and short-term investments. We continue to manage our cash balances prudently while funding our growth initiatives. For the fourth quarter, we generated $6.2 million in operating cash flow. Combined with the $1.9 million generated during the third quarter, second half operating cash flow totaled $8.1 million, resulting in full year operating cash flow of $4.8 million, consistent with what we had anticipated and communicated throughout the year. This operating cash flow comes despite our increased investments made throughout 2025, in anticipation and support of our expected growth.

With that, I'll turn the call back to Obi for some closing remarks.

Thank you, Kevin. I'm incredibly proud of the progress the Cerus team made in 2025 as we continue to advance our mission to make the INTERCEPT Blood System the standard of care for transfused blood components worldwide. Every year, more patients benefit from the pathogen-reduced blood components, and that impact continues to grow because of the execution by and dedication of our employees and partners around the globe. With a strong, durable and growing core platelet franchise, increasing adoption of IFC and continued investment in innovation across the INTERCEPT platform, we entered 2026 with a solid financial foundation and improving operating leverage. We remain focused on disciplined execution, expanding patient access and thoughtfully advancing our pipeline as we continue to build an enduring company capable of delivering meaningful impact and sustainable value over the long term.

Thank you for your continued interest in Cerus. Operator, we'll now be happy to take your questions.

[Operator Instructions] Our first question comes from the line of Bill Bonello from Craig-Hallum Capital.

So maybe you could just talk a little bit more about the BCA agreement? I know it's early days, but first of all, maybe just recap for us from -- if you're a blood center, what is different for you because of this contract? What sort of -- what is it about the contract that you expect to drive the penetration beyond where you are today? And then any kind of early anecdotes or anything from your interaction with those centers.

Yes. Thanks a lot, Bill, for the question. Vivek, would you like to take this?

Yes, I'd be happy to. Bill, thanks for the question. A couple of things that excite us about the BCA contract. First, if you think about the volume they represent in terms of overall blood product distribution, it's roughly half the market. And if I were to take the platelet opportunity to start with, in that to roughly 50% of the market, we're approximately 30% penetrated. So if you think about near-term growth opportunities in the U.S. platelet market, it's disproportionately represented by BCA members. And through this contract, we're able to do -- through this purchasing agreement, we're able to leverage their existing supply chain network, their contracting platforms and also their education and awareness channels. And so in terms of leveraging their SG&A footprint and really being able to more effectively disseminate our sales and marketing offerings, it's a real enabler in that regard.

And we're already seeing inbound inquiries so far this calendar year from BCA member institutions who haven't previously utilized INTERCEPT. So that's been encouraging. Furthermore, we're seeing increased depth with BCA users who started to use INTERCEPT but still have room to run in terms of increasing overall product adoption.

On the IFC side, our legacy manufacturing partners will be moved under the BCA umbrella agreement. This will help to facilitate movement of product across the country where some of these members have BLAs in place and can distribute across state lines. It's also going to allow us to leverage their sales channels from a clinical education and awareness building standpoint.

And just sort of one anecdote I'll point to is we're doing a series of webinars in collaboration with BCA, and we had our first webinar last month, and we had over 150 attendees joined. So just in terms of being able to quickly expand reach and access and then the enthusiasm from the BCA membership, all these things combined together to give us -- it's early days, but give us enthusiasm about the prospects of that collaboration.

Great. That's helpful. And just one quick follow-up for Kevin. Thoughts on cash flow for this year?

For 2026, Bill?

Yes.

Yes. I think it is going to be more of the same. We -- 2025 was bookended with heavy investment in working capital, in particular, inventory to meet the anticipated growth that we saw coming. We've continued to invest in that in the back half of the year, albeit at a slower pace, more reasonable pace. I think that's going to continue. We're going to continue to make sure that we've got sufficient inventory to serve the growth that we expect. But with that said, the business is at a scale now where we expect we'll be able to continue to generate operating cash flows.

Our next question comes from the line of Mark Massaro from BTIG.

I wanted to ask about EMEA, which clearly came in very strong. I think you reported 36% growth in Q4. You talked about this opportunity in Germany. I think you framed it as a $30 million annual opportunity, I think, in platelets. Can you just give us a sense for when this study is expected to read out in Germany? And I'm familiar with -- you have a very large business in France. But is the Germany opportunity all from a base of 0. Just give us a sense for how much activity Germany is today versus where you think it could be at scale?

Yes. Thanks for the question, Mark. Vivek, I think this is another one for you.

Yes, sure, I'd be happy to answer, Mark, thanks for the question. So just to remind you, the INITIATE study in Germany is an observational Phase IV post-market study. So we're actually generating revenues for the products we sell that's utilized in the context of the study. It's really to generate real-world experience that can be used to build the dossier to support improved reimbursement and to further sort of convince clinicians and blood center operations folks that INTERCEPT can be used in routine practice to provide greater clinical utility and protection.

And so we anticipate that study continuing to enroll over the course of this calendar year, so 2026, and likely leading to a more meaningful increase in revenue contribution in '27 and beyond. And as you correctly pointed out, we estimate this market opportunity to be roughly a $30 million annual opportunity.

In addition to Germany, though, if you look at growth in the region, we've had favorable uptick in the Middle East. We continue to see opportunities in Southern Europe to drive growth. And as you pointed out, we have a really stable and important business in France. And what's been encouraging, too, you with the core business growing, we've had the opportunity to reengage both the existing and then engage new customers with the successful rollout of INT200. So we see quite a bit of opportunity for continued growth internationally. And certainly, the contributions of our international team were critical to not only our Q4 success, but the strength of the full 2025 result.

Okay. That's really helpful. And then my second question is just -- I would love any type of update on red blood cells in Europe. I think I heard Obi talk about the TÜV-SÜD review has been completed and now moving over to ANSM. I know that timing is not something you can directly control, of course. But can you just give us a sense for when you think CE marking for the red blood cells in Europe? Is that more likely a 2027 event? Or do you think it could possibly sneak in in the back half of this year?

Yes. Thanks for the question, Mark. So as we mentioned in the prepared remarks, TUV has completed a review of all the dossier segments that they have. Sections that they have, and now that will be transferred over to ANSM this month. And then once they accept it, there's roughly a 210-day clock that we believe they'll stick to given the historical review by other component authorities. So that's promising. Once we get those questions back, then we'll address them. And then it really would lead to a possible approval in the first half of 2027, assuming there's no issues with that submission or with that review of the file. And again, to remind you that it's really addressing the CMC-related part of the submission. So looking good there.

And then just maybe a quick update on red cells in the United States. We have completed enrollment for the Phase III RedeS study, which is the second of our 2 Phase III studies required for a PMA submission. And that will read out in the Q4 time frame of this year. So we're looking forward to the outcome of that study.

Okay. And if I can sneak in a third one, maybe for Vivek. I know you talked about strength in the Middle East, but can you just give us a sense from where this is coming from exactly? And how would you size the penetration rate in some of these larger countries?

So we have strength across the region, probably the single biggest opportunity from a volume standpoint would be represented in the Kingdom of Saudi Arabia. Obviously, kind of with some of the real-time geopolitical issues at play at the moment, things are a bit in flux. But the thing that's most encouraging about that marketplace is they tend to look at the AABB and the U.S. FDA standards, when they determine their procedures and protocols. So the fact that INTERCEPT platelets are standard of care in the U.S. has a pretty influential impact on that region, and we saw good progress in calendar year 2025, and so more to come there. But if you look at places like Kuwait, Qatar and then from a size standpoint, in Saudi Arabia, there's a lot of room for us to run in that part of the world.

[Operator Instructions] At this time, I'm showing no further questions. I would now like to turn the conference back over to Obi Greenman for closing remarks.

Thank you very much. We really appreciate your participation in the call today, and we -- Vivek, Kevin and I will all be participating in the TD Cowen health care conference tomorrow. So we encourage you to listen in to that fireside chat. Thanks very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cerus Corporation Third Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Tim Lee, Cerus Head of Investor Relations. Tim, you may begin.

Thank you, and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.cerus.com. With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Vivek Jayaraman, Cerus' Chief Operating Officer; Kevin Green, Cerus' Chief Financial Officer; and Carol Moore, Cerus' Senior Vice President. Cerus issued a press release today announcing our financial results for the third quarter ended September 30, 2025, and describing the company's recent business highlights. You can access a copy of the announcement on the company's website at www.cerus.com.

I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results, including our 2025 product revenue guidance, our fourth quarter 2025 expected product revenue range, our expectations for operating cash flow and non-GAAP adjusted EBITDA performance and our expected expense levels, expected future growth and our growth trajectory, the availability and related timing of data from clinical trials, planned regulatory submissions and product launches, product expansion prospects and other statements that are not historical facts.

These forward-looking statements involve risks and uncertainties that can cause actual events, performance and results to differ materially. They are identified and described in today's press release and our slide presentation and under Risk Factors in our Form 10-Q for the quarter ended September 30, 2025, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements.

On today's call, we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDA and the percentage growth in EMEA product revenue in constant currency. These non-GAAP measures should be considered as a supplement to and not a replacement for measures presented in accordance with GAAP. For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures to the extent reasonably available, please refer to today's press release and the slide presentation available on our website. We will begin today with opening remarks from Obi, followed by Vivek to discuss recent business highlights, and Kevin to review our financial results and expectations for the balance of 2025 and lastly, closing remarks from Obi.

And now it's my pleasure to introduce Obi Greenman, Cerus' President and Chief Executive Officer.

Thank you, Tim, and good afternoon, everyone. I'm pleased to report that Cerus continues to build on its strong momentum, delivering another quarter of solid commercial, operational and financial execution as well as continued progress across our development priorities that we spelled out at the beginning of the year. As we close in on the end of 2025, it's clear that our disciplined focus on execution, coupled with the commitment of our global team and blood center partners is contributing to the sustainable revenue growth that has a solid base. The evolving standard of care in transfusion medicine that incorporates pathogen and activation has been established for about 25% of the global platelet supply, providing a great foundation for expected future revenue growth associated with our growing INTERCEPT product portfolio and our goal to address all transfused blood components.

In the U.S., INTERCEPT adoption continues to grow as hospital demand for 100% pathogen inactivated platelet inventory increases because of the benefits associated with managing the logistics and inventories of platelet transfusion. We estimate the current U.S. market penetration in the mid-60% vicinity, up from the low 60s a year ago, and we believe we have additional runway well into the 70% range and ultimately north of 80% as we continue to enhance the value proposition of INTERCEPT with improvements in ease of use and new label claims. Adding to the growth from our platelet and plasma businesses, IFC continues to gain clinical traction as hospitals recognize its ability to meaningfully improve patient outcomes and streamline transfusion workflows. We continue to believe IFC provides tremendous growth potential for our base business as we move forward.

Over the past 2 quarters, we experienced an acceleration in IFC kit sales to blood centers and a shift away from the direct sales to hospitals as blood centers began to champion IFC as an important part of their product portfolio in the face of hospital demand. Vivek will provide additional color on this transition and the expected growth prospects of our U.S. IFC business in his prepared remarks. In international markets, INTERCEPT's position as the standard of care in multiple European countries, including Switzerland, France, Austria and Belgium, is supporting the interest in growth in other geographies.

Cerus was recently selected by the German Red Cross Blood Service, Baden-Württemberg, Hesse, to support the INITIATE study, a prospective multicenter study evaluating pathogen-reduced platelets under routine conditions at multiple blood center production sites and across many hospitals in Germany. This follows the publication of a new recommendation from the German National Blood Advisory Committee, or AK Blut, which recommends proactive measures, including pathogen reduction as core measures to enhance the safety of platelet transfusions. We believe these are important steps and serve as precursors for potential future growth coming from Germany.

Shifting to our development pipeline. We are happy to report enrollment of the last patient in the U.S. Phase III RedeS trial in October. As you may recall, RedeS is the second U.S. Phase III clinical trial for red blood cells and the study enrolled almost 600 patients requiring RBC transfusion for both acute and chronic anemia. Results from the study are expected in the second half of 2026, at which time we will discuss with the FDA next steps in the U.S. regulatory pathway. In Europe, the regulatory review of INTERCEPT RBCs continues with a notified body, TÜV SÜD based out of Germany, while the competent authority review will transition from the State Institute of Drug Control, Sukel in the Czech Republic to the French National Agency for Medicines and Health Products Safety or ANSM.

With ANSM's agreement to take on this consultation, we now expect the CE Mark decision on the INTERCEPT RBCs to be delayed by at least 6 months prior to prior expectations. Switching to our next-generation LED-based INT200 illumination device. Following the successful European CE Mark approval earlier this year, the regulatory team continues to prepare for the planned U.S. PMA submission to the FDA in mid-2026. Concurrently with the planned PMA submission, we plan to initiate a new platelet clinical study designed to expand the shelf life of INTERCEPT Blood System for platelets from the current 5-day indication and provide greater value to customers.

Lastly, switching to our financials. We continue to execute against our stated objectives and remain focused on our goal to achieve full year positive non-GAAP adjusted EBITDA. Kevin will provide additional details on this and our full financial results in his prepared remarks.

With that, I'll turn the call over to Vivek to provide more detail on our third quarter commercial performance.

Thank you, Obi, and good afternoon, everyone. Q3 was another strong quarter of commercial execution for Cerus. Building on the solid first half of the year, we delivered double-digit product revenue growth with broad-based strength across our INTERCEPT portfolio. Demand remained robust in all key geographies and our teams once again demonstrated operational discipline and close partnership with our customers. Globally, adoption of INTERCEPT continues to grow. Our U.S. platelet franchise continues to serve as the foundation of our business. The feedback we receive from our partners is consistent. INTERCEPT platelets help improve patient safety, simplify logistics and enhance supply reliability. We expect our U.S. platelet franchise to be an important contributor to revenue growth for years to come and are grateful for the strong partnerships we have with U.S. blood centers.

Internationally, we saw healthy growth in our EMEA platelet franchise and continue to garner positive feedback from the INT200 launch. As Obi referenced, it is encouraging to see the initial commercial activity in Germany, which is the single largest market in Europe. As noted, the INT200 launch is progressing well. Customer interest in INT200 is robust, and we converted that interest into revenue with multiple system installations during the quarter. Looking ahead, we expect a strong finish to the year with a marked pickup in INT200 installations in the fourth quarter. I'm pleased with the performance of our international team as we continue to drive product innovation that addresses customer needs. Together, our efforts are reinforcing INTERCEPT platelets as the global standard of care for platelet safety. In addition, the release of INT200 is a tangible demonstration of our commitment to product and technology innovation in the field of blood safety.

Switching to IFC. Customer demand as measured by therapeutic dose equivalents more than doubled this quarter, while revenue increased nearly 70% compared to the same period last year as hospitals and clinicians gain confidence with the clinical and operational benefits of IFC. As Obi noted, we are seeing a greater shift from therapeutic finished product sales to hospitals to IFC kit sales to blood centers as we change our focus to our traditional customer base. This move allows us to leverage our blood center customer sales channels and their existing hospital contracts and relationships. During the third quarter, approximately 70% of the dose equivalent unit sales were tied to kits compared to less than 25% the year prior. We expect this trend to continue. And by the end of 2026, we expect nearly all IFC sales to be in the kit format.

The increase in global INTERCEPT demand continues to be fueled by our strong podium and presentation activity and advocacy by leading clinicians around the world. Just last week at the Association for the Advancement of Blood and Biotherapies Annual Meeting, Dr. Patricia Kopko from the University of California, San Diego discussed the benefits of pathogen-reduced cryoprecipitated fibrinogen complex from the perspective of thought-leading hospital and academic institutions. Dr. Kopko presented a compelling cost analysis on the use of IFC compared to conventional cryo built beyond just direct cost of transfusion. In her presentation, she highlighted the significant cost savings and revenue generation opportunity associated with faster procedural time due in part to earlier delivery of fibrinogen.

Earlier access led to a material reduction in turnaround time and as a result, increased throughput in the OR. Since IFC enables earlier delivery of fibrinogen, the analysis by UCSD showed a savings of $1,200 per surgical procedure. This significant savings was the reason why the Quality Council at UCSD approved IFC use hospital wide. In addition, Dr. Kopko made an emphatic appeal on the regular use of IFC for women experiencing postpartum hemorrhage. In her view, there is no question on the clinical and potentially life-saving value of IFC in such critical situations.

In September, at the American Association for the Surgery of Trauma Annual Meeting, Dr. Jonathan Meizoso from the University of Miami and Dr. Bryan Cotton from UTHealth Houston discussed fibrinogen supplementation and traumatic hemorrhage. Dr. Meizoso noted that with a 5-day post-thaw shelf life, his hospital is able to keep IFC pre-thawed and ready for use, which allows for quicker access to fibrinogen supplementation while reducing wastage compared to conventional cryo. These real-world insights from leading KOLs are helping drive awareness and confidence among key clinical specialties, reinforcing IFC's potential to redefine transfusion support in critical care settings.

In summary, Q3 2025 was another demonstration of disciplined commercial execution and customer focus. Our global platelet franchise remains a cornerstone of our business, and IFC is emerging as a significant growth driver in the U.S. Internationally, the INT200 Illuminator launch is going well and creating new opportunities to engage customers and broaden the reach of INTERCEPT. With continued adoption across our portfolio and expanding global reach, we are confident in our trajectory as we close out 2025 and are anticipating a record quarter in Q4 2025. Furthermore, we believe that strong top line growth in both 2024 and 2025 will set the stage for another year of growth and our outlook for 2026 is positive. I'd like to thank my colleagues for their continued efforts to advance blood safety. I'd also like to thank our blood center customers and hospital partners. This is a team effort, and I'm very encouraged with our progress in Q3.

With that, I'll turn the call over to Kevin to review our financial results in more detail.

Thanks, Vivek. Hello to everyone listening on today's call. Thank you for your interest in Cerus and for joining us. On today's call, I'll be discussing our financial results for the third quarter of 2025, our increased full year product revenue guidance and our expectations surrounding key financial objectives we committed to earlier in the year. For the most part, I'll be limiting my historical results commentary to Q3 rather than year-to-date results.

I'll start off with product revenue. For the third quarter of 2025, we reported record levels of product revenue totaling $52.7 million, which translates to a 15% year-over-year increase. Similarly, for the first 9 months of the year, product revenue increased 15% to $148.4 million compared to the first 9 months of 2024. Global platelet sales as well as IFC sales in the U.S. were the principal drivers for both the quarter and year-to-date growth. Breaking down product revenues by geography, you'll see that third quarter EMEA product revenues increased 21% compared to the same period last year, due in part to strength in the Middle Eastern platelet sales as well as initial shipments to Germany in support of the INITIATE study.

On a non-GAAP basis, excluding the impact of foreign currency exchange rates, EMEA product revenue increased 14%. At the same time, third quarter North American product revenues increased 11% compared to the prior year, led by gains in the United States. IFC product revenue for the third quarter was $3.9 million compared to $2.3 million during the third quarter of 2024. As Vivek noted in his prepared remarks, we are experiencing a faster-than-expected shift in IFC sales from our historical model, which focused on Cerus selling finished IFC therapeutics directly to hospitals to now more of an IFC kit sale to blood center customers who are producing IFC for their own hospital accounts. This should provide us with a streamlined approach to contracting and with improved gross margins. Given this shift, going forward, we'll provide you with both volume growth and therapeutic dose equivalents as well as revenue to provide you with better insights into our commercial performance and overall product demand growth rates.

Year-over-year reported IFC revenue in Q3 increased approximately 70%, while volume demand increased approximately 110%. Based on our strong year-to-date commercial execution and increasing conviction in our growth projections for the year, we are raising our full year 2025 product revenue guidance range to $202 million to $204 million compared to our previous guidance range of $200 million to $203 million. In addition, we now expect full year 2025 IFC sales to be in the range of $16 million to $17 million compared to our previous guidance range of $16 million to $18 million due in part to the faster-than-expected shift to kits.

Government contract revenue, which is reported separately from product revenue and not included in our guidance, was $7.5 million in the quarter compared to $4.6 million for the prior year period. The year-over-year increase was primarily driven by increasing enrollment in the Phase III RedeS trial the INTERCEPT red blood cell system covered under the company's 2016 agreement with BARDA and the activities for the advancement of the INTERCEPT red blood cell system covered under the company's 2024 BARDA contract.

Turning now to our product gross profit and gross margins. Our third quarter product gross profit was $28.1 million compared to $26.2 million during the prior year period, a year-over-year increase of 7%. Product gross margins for the third quarter were 53.4% compared to 56.9% realized during the third quarter of the prior year. Import tariffs, inflationary pressure and higher IFC therapeutic production costs impacted product gross margins compared to the prior year period. As we look ahead to the balance of the year, we expect full year product gross margins will generally remain in the 50s, but may face some continued headwinds such as foreign exchange rates, tariffs and inflationary pressures.

Other factors that could drive quarterly variability include, but are not limited to, product mix, production costs of IFC to meet increasing demand, economies of scale and production volumes and the timing of COGS reduction initiatives coming online. Moving down the income statement. Operating expenses for the third quarter totaled $34.4 million compared to $31.8 million for Q3 2024. Of the total operating expenses reported for the third quarter, R&D expenses totaled $15.8 million compared to $14 million during the prior year period. The year-over-year increase in R&D expenses was primarily related to higher cost of generating data for the U.S. PMA using our INT200 illuminator and as you saw with the increased revenue, higher government contract costs.

SG&A expenses for the third quarter were $18.6 million compared to $17.8 million in Q3 2024. Year-over-year SG&A expenses were relatively consistent due to multiple offsetting factors and reflect our ongoing focus on driving leverage in the P&L. Looking ahead, we continue to manage the business and plan for increasing levels of leverage from our operating expense investments. Shifting our focus to the bottom line and non-GAAP adjusted EBITDA results. For Q3, GAAP bottom line net loss attributable to Cerus was essentially at breakeven compared to a loss of $2.9 million or $0.02 per share for the third quarter of 2024.

On a non-GAAP adjusted EBITDA basis, we are pleased to report our sixth consecutive quarter of positive non-GAAP adjusted EBITDA, totaling $5 million for the third quarter compared to $4.4 million for the prior year period. With year-to-date non-GAAP adjusted EBITDA totaling $6.1 million, we expect to deliver against our stated goal of full year positive adjusted EBITDA. Turning to the balance sheet and associated cash flows. We ended the third quarter with $78.5 million of cash, cash equivalents and short-term investments on hand compared to $80.5 million at the end of 2024.

As you can see, we've continued to manage the growth in our business, have invested in potential future growth and advanced our pipeline programs while maintaining a stable cash balance supported by our growing operations. The entire organization is behind these results and I'd like to recognize the buy-in and effort from every employee. As far as cash flows are concerned, cash generated from operations during the third quarter totaled $1.9 million with net cash used of $1.4 million for the 9 months. As we've commented throughout the year, our operating cash flows were as expected with working capital investments made during the first half consuming net cash with the growth in the business, focus on leverage and working capital management resulting in cash flow generation for Q3.

We expect to continue generating positive operating cash flows throughout the remainder of the year, delivering on the planned objective of generating annual positive operating cash flows for the year as a whole. Furthermore, we expect to have increasing access to our revolving line of credit should we choose to use that facility further and offset receivable or inventory-related working capital investments.

With that, let me turn it back over to Obi for some closing remarks.

Thank you, Kevin. As you just heard, Q3 2025 was another strong quarter for Cerus both operationally and financially. This quarter highlights the foundation we have built for durable growth. We delivered record quarterly product revenue of $52.7 million, driven by strong platelet demand and growing IFC adoption. We raised our full year 2025 product revenue guidance for the second time this year, reflecting confidence in continued momentum across our franchises. And we achieved our sixth consecutive quarter of positive non-GAAP adjusted EBITDA, underscoring the scalability and consistency of our model. Looking ahead, we remain focused on execution and innovation. With the early but encouraging activities in the German market, the continued rollout of the INT200 LED illuminator across Europe. The completion of enrollment in our U.S. Phase III RedeS trial and ongoing regulatory review of INTERCEPT red blood cells in Europe, we are steadily advancing towards our goal of enabling a complete portfolio of pathogen inactivated blood components worldwide.

At the same time, the transition of IFC to a kit-based model and the sustained growth in platelet adoption reaffirm the strength of our commercial strategy and the partnerships that make our mission possible. I want to thank the entire Cerus team and our global network of blood center partners for their relentless commitment to improving blood safety and availability for patients around the world. With more than 20 million INTERCEPT treated components transfused globally, our impact on the field of transfusion medicine continues to expand and we are only at the beginning of what's possible. With that, let me turn it over to the operator for questions.

[Operator Instructions] our first question comes from Matthew Park with Cantor Fitzgerald.

Congrats on the quarter. I guess starting on gross margin, I appreciate you guys highlighting some of the puts and takes in the quarter. And as we look into 2026, I guess, which of these headwinds do you expect to ease versus persist? And what levers can you guys pull to kind of get some stabilization in margins?

Thanks, Matthew. Yes, some of these are out of our control, right? Obviously, FX rates, the tariff environment, which, as everyone knows, is extremely volatile or has been, are out of our control. What we can control is growing the business, economies of scale and product mix. Furthermore, I'd say our continued push for the IFC business to move from a therapeutics business where we're selling the finished therapeutics to hospitals to one of a kit sale where we sell the kits to blood centers to produce IFC for their own hospital accounts will help drive margin expansion from here. So while we have some near-term headwinds, some of them out of our control, I think we're well positioned on the things that we can control to see margin expansion once those subside.

Got it. That's super helpful. And then I guess just one more for me on IFC. I guess, can you guys just talk about your ability to meet growing demand over the next couple of quarters? And if there's anything you guys can do on the supply chain or manufacturing side to kind of ensure consistent product availability?

Yes. Thanks, Matt. Vivek, do you want to handle that one?

Yes, sure. I'd be happy to. We've seen really strong improvement in terms of our production and supply capability through the course of this year. I think we mentioned in a prior call, a fairly large blood center received their BLA. And so we feel good that with demand growing, supply shouldn't be a constraint for the foreseeable future. We continue to have blood centers express an interest in producing IFC and those that are currently producing are actively seeking BLA so that they can transport product across state lines. So we feel as though we're in a very solid position with respect to supply both today and for the foreseeable future. So thanks for the question.

[Operator Instructions] our next question comes from John Wilkin with Craig-Hallum.

Congrats on the good quarter. So first off, just on IFC, could you talk a little bit about what -- like when the decision was made to start shifting more towards the kit-based model and what drove that decision, whether it was to try and offset some of the gross margin pressure or just to leverage the existing sales channel?

Yes. Thanks for the question. Vivek, I think you share this one as well.

Sure. I'd be happy to. You addressed some of the key issues. Number one, I'd say the primary reason to shift to the kit model is really twofold, and they're both market access related. The first being that we can leverage the existing sales channels of the blood center to significantly amplify and multiply our field sales personnel and folks engaging with hospitals and detailing IFC without the associated SG&A expense. And so that's proven to be incredibly invaluable as we drive awareness and clinical education about IFC.

Secondarily and also under the umbrella of market access is we can leverage existing blood center and hospital contracts where they contract across the number of products that the blood center provides to the hospital. We can slide IFC into those contracts. And so that materially reduces the cycle time in terms of getting a contract in place, having to develop a bespoke product contract for IFC through Cerus directly to the hospital. So those are two pretty significant market access levers that provide the rationale for the shift.

And then as you mentioned, too, there is a gross margin benefit associated with selling kits through blood centers versus selling a finished therapeutic directly to the hospital. So those are all the reasons that drove our decision to shift the distribution strategy and it's encouraging to see that adoption only increased as we're going through the process of doing that.

That makes sense. That's helpful. And then on the OpEx side, you guys came in kind of well below where we have been modeling and a pretty significant step down from where you were in Q2. Could you talk about a little bit more about what drove that and how sustainable that is going forward? And as much as you're able to say right now, how you envision that progressing into 2026?

Yes. There were a couple of things. I think in Q2, as we mentioned, we had some compensation costs that were a cumulative catch-up. So we saw probably a bit of outsized impact on that particular period. So I don't know that the step down is all that relevant. As we think about OpEx going forward, you got to think about our business model as a whole, we've got a concentrated customer base that we try and serve extremely well, but we're able to get a lot of leverage out of that. And so that's a focus of the company is to continue to generate outsized revenue growth for those SG&A investments. And then as it pertains to R&D, any variability is going to be driven from our awards with BARDA and then probably in the nearer term, the PMA for the LED illuminator here in the U.S. So I would expect them to be fairly consistent as we get into next year and RedeS reads out, we should see them tick down slightly, but nothing too significant. Hopefully, that answers your question.

[Operator Instructions] with no further questions in queue, this concludes today's conference call. Thank you for participating. You may now disconnect.