CryoPort Stock

Thank you. Thank you. Good afternoon, everybody. Welcome to the CryoPort Second Quarter 2026 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6th, 2026. I will now turn the conference call over to Mr.

Todd Bromer from KCSA Strategic Communications. Please go ahead.

Thank you operator before we begin today, I would like to remind everyone that this conference call contains certain forward looking statements, all statements that address our operating performance events or developments that we expect or anticipate occurring in the future. Our forward looking statements, these forward looking statements are based on management's beliefs and assumptions and not on the information currently available. TO OUR MANAGEMENT TEAM. OUR MANAGEMENT TEAM BELIEVES THAT THESE FORWARD-LOOKING STATEMENTS ARE REASONABLE AS AND WHEN MADE. HOWEVER, YOU SHOULD NOT PLACE UNDUE RELIANCE ON ANY SUCH FORWARD-LOOKING STATEMENTS BECAUSE SUCH STATEMENTS SPEAK ONLY AS OF THE DATE WHEN MADE. WE DO NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION OR FUTURE EVENTS OR OTHERWISE EXCEPT AS REQUIRED BY LAW. IN ADDITION, FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, EVENTS, AND DEVELOPMENTS TO DIFFER MATERIALLY FROM OUR HISTORICAL EXPERIENCE AND OUR PRESENT EXPECTATIONS OR PROJECTIONS. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DESCRIBED IN ITEMS A RISK FACTORS AND ELSEWHERE IN OUR ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND THOSE DESCRIBED FROM TIME TO TIME IN OTHER REPORTS WHICH WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

AS A REMINDER, CROWD PORT HAS UPLOADED THEIR SECOND QUARTER 2026 IN REVIEW DOCUMENT TO THE MAIN PAGE OF THEIR CROWD PORT INC. WEBSITE. THIS DOCUMENT PROVIDES A REVIEW OF CRYOPORT'S FINANCIAL AND OPERATIONAL PERFORMANCE AND A GENERAL BUSINESS OUTLOOK. BEFORE I TURN THE CALL OVER TO JERRY, PLEASE NOTE THAT BECAUSE OF THE STRATEGIC PARTNERSHIP THAT HAS BEEN ESTABLISHED WITH DHL GROUP AND THE RELATED SALE OF CRYOPDP TO DHL IN JUNE OF 2025, CRYOPDP'S FINANCIALS, WHICH WERE A PART OF THE LIFE SCIENCE SERVICES REPORTABLE SEGMENT ARE NOW PRESENTED AS DISCONTINUED OPERATIONS. PLEASE NOTE THAT UNLESS OTHERWISE INDICATED, ALL REVENUE FIGURES DISCUSSED TODAY WILL REFER TO CONTINUING OPERATIONS. THIS INCLUDES CRYLE POINT'S FIFTH YEAR 2026 REVENUE GUIDANCE. IT IS NOW MY PLEASURE TO TURN THE CALL OVER TO MR.

Melton, Chief Executive Officer of Proudport. Jerry, the floor is yours. Thank you, Todd. Good afternoon, everyone. With me today is our Chief Financial Officer, Robert Stavanovich, our Chief Scientific Officer, Dr. Mark Sawicki, and our Vice President of Corporate Development and Investment Relations, Thomas Heinzen. We're pleased to report that our revenue momentum over the past several periods continued into the second quarter. with our total revenue reaching $49 million. Our growth was led by life science services segment, where revenue grew 15% year over year, driven by 25% growth in bio storage bioservices. Total revenue from the support of commercial cell and gene therapy grew 9% to $9.4 million.

However, the services portion of our commercial cell and gene therapies revenue grew 26% year over year as the number of patients treated in community settings and on an outpatient basis continues to ramp. Total revenue from supporting cell and gene therapy clinical trials increased 12% to $13.4 million for the quarter as our clients' clinical pipelines advanced and further matured. quarter, Life Science Services revenue represented 57% of our total revenue. In the second quarter, the number of commercial cell and gene therapies we support increased to 22. our client Orca Bio received FDA approval for Tregsy At quarter end, our total clinical trial count was 779 clinical trials globally, a net increase of 51 clinical trials over the prior year, with 94 of them in Phase III. Currently, we support approximately 70% of the cell and gene therapy industry's clinical We believe this commanding position will enable us to drive further commercial growth as our therapies receive regulatory approval. Based on the information we have today, for the balance of 2026, we expect another 11 possible BLAMAA application filings, five additional new therapy approvals, and one additional approval for a label and or geographic expansion. Our continued growth reflects the value of Cryoport's integrated end-to-end platform across the life sciences ecosystem as well as the growing adoption of cell and gene therapies. During the quarter, our LifeScience product business generated solid results.

This was driven by continued demand for MVE Biological Solutions' industry-leading cryogenic systems. Specific contributors this quarter included strong demand for animal health customers as well as improved general demand from the Americas region. MVE continues to be the market leader and a consistent cash flow generator, as well as providing support and synergies with our life sciences services business. Along with our total revenue growth, we improved adjusted EBITDA from continuing operations by $1.3 million year-over-year, achieving positive adjusted EBITDA of $400,000. This marks an important milestone in our Pathway to Profitability initiative. believe these results will continue progressively over the coming quarters and that we were, are posi, we're positioned to drive more efficiencies more scale in our operations, and continued margin expansion, thereby delivering sustainable, profitable growth. We also celebrated a number of operational milestones this quarter. For example, Crawford Systems' IntegraCell Cryopreservation Services now has clinical clinical processes running in both Houston, Texas and Liège, Belgium.

We were also selected by Verismo Therapeutics to support its two clinical trial cure CAR-T cell therapy programs. IntegraCell is just in the beginning to achieve its mission of bringing its standard setting services to the cell therapy industry. IntegraCell represents yet another standard-setting temperature control supply chain solution improvement provided by Croport that, once fully adopted, will support additional scaling of the cell therapy industry. Our capital investment program will curb as we launch our state-of-the-art bio services operations and our new global supply chains are in Paris, France in the fourth quarter. And we also open our new state-of-the-art global supply chain center in Santa Ana, California in the fourth quarter. These two new facilities add significantly to our global supply chain center network and our ability to deliver advanced temperature control global supply chain solutions for our life science clients worldwide. There was also significant completion of projects in our life science products as MVE began shipping a number of new products, including our MVE Fusion 811 self-regenerating cryogenic freezer that operates without the need of cryogenic infrastructure in routine, liquid nitrogen refills.

We also began producing cryogenic freezers in China during the second quarter, shipping our first orders of models HE and OpenTops with newly introduced Cryoverse Connect controllers. These accomplishments are in line with our previously announced goal of making all products smart, that is, receiving and generating data. We're also advancing our digital initiatives as we employ meaningful AI applications that improve our productivity and advance our enterprise technology strategy. Supplementing our use of machine learning technology, we're utilizing generative AI to automate routine tasks, analyze large data sets, manage risk, and expedite decision-making, all with a human in the loop. We are also providing our employees across the world with enterprise-approved generative AI tools for innovation purposes, and we've already begun to see measurable results. Today's report highlights our strong financial results, emphasizes the value of our integrated temperature control supply chain solutions platform, indicates our broad industry-leading revenue pipeline, and reports the great strides we have made in expanding our resources and capabilities through our strategic initiatives. Reflecting on our strong first half performance, we are affirming our full year 2026 revenue guidance of $192 to $196 million.

I sincerely believe that there is no organization that is better positioned than Cryoport to provide critical temperature control supply chain solutions leadership required to help scale the cell and gene therapy industry. Based on market feedback and demand, our comprehensive, improving portfolio of services and products are designed to help our clients bring life-saving therapies to patients around the world safely, reliably, and efficiently. That mission drives me and every one of my Cryoport teammates, a mission we could not deliver without you. Thank you for your continued confidence in Crownport and for being a part of this exciting journey with us.

We'll now open the floor for your questions. Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question.

And your first question comes from Puneet Sudha from Learing Partners.

Go ahead. Hi. This is Philip Bond from Preneat. Thanks for the question. My first question is just on guidance. The first half revenue around $97 million and 2QB consensus yet. Okay. You're reiterating full year guide at 192 to 196 million. I just want to ask what is the implied second half shape and is holding the range more than the range conservatism or is there a specific second half Edwin that.

that you're contemplating here. Yes, thank you for the question. It's understandable and I'll answer part of it and then I'll ask Robert to supplement with any comments he has. But, you know, given the The geopolitical situation, the macroeconomics that are associated with that, we think it's prudent to hold our guidance to where it is today. There are just a lot of uncertainties in the world. We're moving very well. We are very pleased with our performance. We know that our plans are being implemented. The industry is continuing to progress.

We feel very good about that. But we think that at this point, it's prudent just to hold our guidance as to where it is. Robert, would you like to comment further? Yes, I mean, Jerry covered most of it. I think, look, the key assumptions underlying our 26 outlook really have remained largely unchanged. The fundamentals, as Jerry outlined, for our business continue to be very strong. demand for our Lifesign services and Lifesign products businesses. We've seen it throughout the first half of the year, and we expect those trends to continue into the balance of 2026. Got it. That makes a lot of sense.

I also wanted to ask about products growth. I think in the previous quarter, you affirmed high single digit growth for products. this year, products obviously flat and 2Q up 7% in the first half. So high singles for the year applies to roughly 9 to 11% growth in the second half, if my math is correct.

I just want to ask, is that still the view, or is mid-single digits more of a realistic rate? I think it's probably in the upper single digits. You know, the product growth was flat this year because we did have a strong second quarter last year, and so it didn't yield. But it's in line with our plan. We're performing very well. And remember, MBE is the world's leading cryogenic systems manufacturer. There's no one that comes even close to MBE. So and the market has turned. It is more solid. It's more predictable than it was, you know, maybe a year ago or so.

But we're very confident in MBE's performance and happy with its performance for the second quarter. It's on plan, and it's doing well.

Robert, do you want to add anything else? I think you covered it. And I think the outlook, I think, for MBE and the products business continues to be solid. As a reminder, the MBE business has always been a strong cash generator, profitable, driving adjusted EBITDA, and we expect that to continue.

Awesome. Thank you. Thank you. And your next question comes from Anna Snopagowski from KeyBank. Please go ahead.

Hi, this is Anna Snepkowski on for Paul Knight. Congrats on the great quarter and achieving positive adjusted EBITDA. My first question is around China. I saw you shipped your first freezer in China for China. think you could just talk through your broader China strategy and how demand is trending there.

Well, China is a very important market for us. It's a market that I don't think anyone in the life sciences can ignore. And, you know, we do have a solid product strategy in China. The idea of producing that product for China was to produce it within countries so that we could avoid any kind of a tariff kind of situation and improve our competitive position, both in doers and freezers. This completed a line. It strengthened us in China. we have put a new emphasis on China within China, with our business development operations, and we're very pleased with the way that's progressing. I don't think it's going to have a... a huge impact immediately. It will take time, like everything else does in the life sciences.

But it's all on plan and it's coming along very well and strategically very important. Now, on the service side of the business, we have yet to determine exactly our strategy. Mark and I will be working on that in more depth. And as we develop that, we'll report on it to you.

Maybe just to add, currently you look at revenue, revenue from China is somewhere around 2 to 3% of our total revenue. So there's really only upside going forward in the longer term.

Great, thank you. And then my second question is just around margins. It seems like you hit your targets maybe a little earlier than expected. So what is your view on EBITDA margins in the back half of the year? Thank you.

Yes, I think if you look at the EBITDA margins, you're right, we did come ahead a little bit earlier than initially expected. Our objective now is really to continue to build on the progress we've made. Achieving positive EBITDA obviously in the second quarter was an important milestone, and we believe that demonstrated our strategy is working. utilization of our network of global supply chain centers increases, we do expect to achieve additional operating leverage, and with that, expect to see a further increase in the adjusted EBITDA going forward. I think one other thing maybe to point out, if you look at the operational performance, is also the strength of our cash generation. During the first half of 2026, as you'll see in our 10-Q, we generated approximately $5 million in positive net cash from operating activities. And that represents a $17 million improvement compared to the first half of 2025. So we believe the combination of improving and adjusting the operating cash flow and increasing utilization provides clear evidence of that path to sustainable profitability that's taking shape.

Great, thank you. Thank you. And your next question comes from Subbu Nambi from Gaganine Securities. Please go ahead.

Hi, this is Ethan on PursuBu. How have smaller biotechs versus larger pharma been performing with respect to trial starts and funding so far? And can you give the split between new trial starts, completions, and terminations in the.

Mark, yes, well, I'll let Tom talk, give you comments on the starts and terminations, but it look, it's both both small biotech and big form are are putting money into the space. The financing situation is improved. What we're seeing though is most of that money is going into phase two and phase three programs. Phase one's a little bit softer, but they're going for the bets and really trying to push the bulk of their pipeline through to commercial launch, which is good for us because obviously we see substantial economic benefit from commercialization activity.

And so that's, we view that as a very positive sign, and that's evidenced by the increase in our phase two and phase three trials for the quarter. Tom, you wanna comment on that? Sure, Ethan, in Q2 there were 29 adds and 16 removed. Of those 16 removed, six were terminated and 10 were completed, so pretty good stats.

Thanks, guys. Thank you. And your next question comes from Richard Baldry from Roth Capital. Please go ahead.

Thanks. It's good to see your first sort of commercial client on the IntegraCell side. Can you talk a little bit more about, you know, maybe pipelines prospects for more ads there, what the gating factors will be, sort of how you see the growth in that part of the business picking up over 27 and beyond? Sure.

Yes, so, you know, obviously, we did onboard our first clients, and we are seeing them starting to ramp modestly. Now, I want to remind everybody, the first two sites that we've set up for IntegraCell, the Houston, Texas site and Liege, Belgium site, are proofing sites, right, for the larger initiative. So it does take some time for the industry to adopt the standard setting services, and we really do believe that IntegraCell is a cutting edge service offering that's really going to help the industry standardize. We have made significant progress out of both those sites, as we mentioned. We announced the relationship with RISMO at the end of last month. And so while we don't anticipate it being a significant revenue contributor for 26, we do believe that this will be a significant contributor to our overall revenue in the future. And we do believe that it will continue to ramp modestly through 26.

Okay.

and be a significant contributor in the future. Rich, the reason it's going to be what Mark just explained is the reason is that this is a standard-setting service that will provide an ability for the industry to scale, and it will provide better economics for the industry. So it's got the drivers are there. It's just a matter of time for the industry to adapt. You know, changing things in our industry takes a long time. It's very complicated. You have to go through a lot of regulatory procedures. hurdles and you have to make a lot of adjustments into SOPs and other quality requirements and so forth. So just reinforcing what Mark said, this is an important, it's important, but it will take time.

Thank you. And if there are any other questions, please press star 1.

And your next question comes from Macky Taj from Steven. Please go ahead. Hey, good afternoon, and thank you for taking my questions. Maybe the first, you know, ORCA, it's good to see an allogeneic approval there. I guess my questions are really around the Fusion 800 freezer nuts that's been on the market for, a few months, a few quarters now. I just want to get a flavor for how the pipeline looks or how the interest is trended for that product.

MVE is doing well, and the pipeline is improved from recent times. The industry is stable, and the outlook is good. MVE is on very, very solid ground. completed some of our strategic planning exercises and MBE's future is impressive. Yes, let me just add a little bit to that. So going to the fusion, you know, we view the fusion as a significant future of product offering that is really going to open up the ability of community care hospitals to be able to support cell and gene therapies. We have engaged the industry from that perspective. There's a significant amount of interest as it relates to that, but obviously, this ties into a broader strategy for a lot of these companies, and we're working hand-in-hand with them to support that, and Fusion will play a big role in that.

I appreciate that. And then maybe, Jerry, you mentioned AI as a, you know, an efficiency approver or improvement tool. I just want to get a sense for how you are viewing the potential impact across the business as it stands today.

You know, there's no question that AI is going to have a big impact on all industry, and certainly we're no exception. And we already are seeing improvements in efficiency, and we're seeing, you know, timeframes collapse, and we will continue to see that. I was just talking with our enterprise technology group today about their initiatives and about the next set of projects. priorities. We're focused on either improving efficiency or effectiveness. We're very targeted. So we have a successful AI initiative going on, and you'll hear more about it each quarter. And I'm very optimistic about it. It's a fantastic technology.

Thank you. And there are no further questions at this time. Mr. Shelton, you can continue.

So that's concluding? Yes. Okay. So thank you, operator. Ladies and gentlemen, thank you for your questions and our discussions. As our financial and operating results show, we delivered an excellent second quarter, generating growth across our key revenue streams, improving profitability, and achieving the important objective of delivering positive adjusted EBITDA for the quarter as we march down our pathway to profitability. With our accomplishments to date, we are well positioned to further expand margins, enhance operating efficiency, and deliver sustainable, profitable long-term growth for our shareholders. Moving forward, we will remain focused on executing our strategy, driving continued financial performance, and capitalizing on the significant opportunities before us. We expect upcoming growth catalyst will drive us to new heights with the advancement of our global supply chain center network and our recent launches of new products and services. We thank you all for joining us today.

We appreciate your continued interest and support, and we look forward to sharing our further progress with you when we report on our third quarter financial results. We wish everyone a good evening. Thank you.

This concludes your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day, everybody.

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

[Call has ended.]

Good afternoon, and welcome to Cryoport's First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. And I will now turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator.

Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team.

Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made.

We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law.

In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission.

As a reminder, Cryoport has uploaded their first quarter 2026 in review document to the main page of the Cryoport, Inc. website. This document provides a review of Cryoport's financial and operational performance and a general business outlook.

Before I turn the call over to Jerry, please note that because of the strategic partnership that has been established with DHL Group and the related sale of CRYOPDP to DHL in June 2025, CRYOPDP's financials, which were previously a part of Cryoport's Life Sciences Services reportable segment are now presented as discontinued operations. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2026 revenue guidance.

It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd, and good afternoon, ladies and gentlemen. With me today is our Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen.

Our first quarter results continue to demonstrate our market-leading position as revenue was $47.8 million, up 16% year-over-year, which puts us off to a very strong start for the year. This growth is a combination of our momentum over the past several quarters across our integrated services and products platform. Revenue in support of our commercial cell and gene therapy grew 26% to $9.1 million, while revenue from clinical trials grew 18% to $12.9 million.

We continue to support one of the industry's broadest cell and gene therapy pipelines and our leadership across both commercial and clinical programs positions us well for future sustainable growth.

As of March 31st, we supported a record total of 766 global clinical trials, a net increase of 55 clinical trials over the prior year with 91 of these clinical trials in Phase III. From this market-leading base, we believe we will continue to drive robust growth in our commercial revenue in both the near and the longer term.

During the first quarter, I'm happy to report that our client, Rocket Pharmaceutical received an accelerated approval from the FDA for their gene therapy, KRESLADI. With this approval, the number of commercial therapies we are supporting has increased to 21. For the remainder of 2026, based on current information, we expect another 10 BLA or MAA application filings and up to 8 additional new therapy approvals.

Our Life Sciences Services segment delivered a strong quarter with revenue increasing 18% year-over-year, including 21% growth in BioStorage/BioServices. This performance reflects increasing adaptation of our full service portfolio in conjunction with the increasing scope and complexity of the cell therapy programs we support. It also underscores the critical role we play in supporting our clients with our extensive array of integrated temperature controlled supply chain services and solutions.

Our Life Sciences Products segment also performed well, generating a 15% revenue growth driven by global demand for MVE Biological Solutions cryogenic systems. For over 60 years, MVE has provided high-quality, reliable cryogenic systems to the market. And every day, it continues to further reinforce its position as the global leader.

For example, during the first quarter, MVE introduced its new Fusion 800 series, which is a self-sustaining cryogenic freezer that eliminates the need for a continuous liquid nitrogen supply feed, delivering exceptional reliability, safety and sustainability and a compact footprint designed for space-constrained environments, where a source of liquid nitrogen is not readily available. This is quite an accomplished engineering feat, which will pay dividends for years to come as we open up new markets that were heretofore and accessible,

Growth across both our reporting segments, Life Sciences Services and Life Sciences Products, combined with a solid gross margins and continued operational discipline drove a $2.2 million year-over-year improvement in adjusted EBITDA from continuing operations, advancing us meaningfully along our pathway to profitability.

We also reached a milestone moment during the first quarter as our IntegriCell team shipped its first cryopreserved clinical trial patient materials from both our Houston, Texas and [ Villers-le ], Belgium facilities for 2 separate clients. This achievement highlights IntegriCell's progress as it continues to develop and moves us a step further toward being a meaningful contributor to the cell and gene therapy industry and the Cryoport's future revenue and profitability.

In parallel, we continue to advance our digital and information strategy, including initiatives in digitization and generative AI to support complex internal workflows and improving our effectiveness and efficiency in day-to-day operations.

Our focus is currently on enabling employees to use secure enterprise-approved generative AI tools to automate repetitive tasks, analyze data in real time, manage risk and accelerate decision-making and execution. We are already seeing tangible benefits and believe AI will play an increasingly important role in our future.

Reflecting on our strong performance for the first quarter and our increased visibility into the remainder of the year, we're raising our full year 2026 revenue guidance to $192 million to $196 million.

We continue to review our guidance on a quarterly basis, and we will make any further adjustments as warranted. We also believe that based on our progress year-to-date, we will achieve positive adjusted EBITDA in the second half of this year. This concludes my remarks for today. Now I'll ask the operator to open the floor for your questions.

[Operator Instructions] And your first question comes from the line of Puneet Souda from Leerink Partners.

So you had a $3 million beat versus the consensus, but just you're raising the guide by $2 million. Just wondering how much of it is prudence being sort of early in the year? Any other considerations? And how should we think about 2Q, if you can provide some context there, just given the momentum you're seeing on the business and versus the core clinical trials?

Well, Puneet, thank you for the question. We think that Q2, of course, was an outstanding quarter, but we think it's a responsible guide given the continued uncertainty on a global macroeconomic basis. And we'll continue to evaluate this on a quarterly basis. And of course, we'll adjust the guidance if it's warranted in the future.

Okay. And maybe if I could switch gears to MVE, Life Science products, you had 15% growth. That was against an easier comp. So just trying to understand how should we think about growth for Life Science product MVE overall with the new product introduction there as well this year. Wondering if Robert can comment on that, too.

Well, Robert can comment on it, but I'll start. All products and life sciences, as you know, very well, take time to ramp up, whether it's products or its facilities. So it will take time for those products to ramp up in the marketplace and to have any kind of an impact.

But we do think the markets are solid and have been -- they've solidified, and we see continued indications that to support that. And we think that we will have a high single-digit growth market going forward. Now we may exceed that from time to time, but that's kind of our assessment. Robert, you may want to add some things there.

Yes. And then just to further amplify, look, the outperformance in MVE during Q1 was really driven by strong demand across all geographies and solid performance, particularly in the animal health, but also life science overall. MVE is the #1 leader in the market worldwide. We already saw stability in 2025 in terms of return of product demand for cryogenic systems, and we continue to see that improvement as demonstrated in our Q1 performance.

Okay. Super. And then if I could ask one more on the -- obviously, we've seen improvement in biotech funding in the fourth quarter. That has continued so far in the first quarter. Just wondering if you're seeing some higher momentum from that for RFP volumes or other contract volumes here in the first quarter or the second quarter so far? Your clinical trials was up only -- net trial adds were only 6, but just wondering if you are seeing any momentum from -- or hearing further momentum from your customers given the funding environment?

Mark will take that.

Yes, happy to. Puneet, Yes, I mean what we're seeing is we're seeing a definitive continued investment into Phase II and Phase III programs. And if you take a look, obviously, at our numbers, the Phase II data itself and Phase III data are increasing very, very nicely. I mean Phase III data was up 5 trials sequentially, which is very unusual and we haven't seen that in a long time. And Phase II continues year-over-year, Phase II is up almost 30 programs. And so a lot of that money is going into that and really is being invested in pushing these late-stage clinical assets over the finish line. So yes, we do see some very positive signs from that.

Yes. And Puneet, maybe just to add to it, it's less about the number of increase in clinical trials. It's really looking at the 766 clinical trials we're supporting. That's a very, very strong number. And looking at, as Mark mentioned, the maturation of those trials moving into Phase II and Phase III.

Remember that the majority of cell therapies that are approved to date went directly from Phase II to commercial launch, and they're conducting their Phase III in parallel. So you really have to look at the 357 Phase II clinical trials and the now 91 Phase III as potential for commercial launches.

And your next question comes from the line of Anna Snopkowski from KeyBanc Capital Partners.

This is Anna on for Paul Knight. Congrats on a great quarter. I have 2 questions. But maybe to start, you mentioned you shipped your first clinical trial patient material for IntegriCell, which is very exciting. Maybe could you just walk us through your initial learnings from this rollout and what your expectations are for IntegriCell in 2026?

Yes, happy to. Yes, we're honestly -- yes, we're really pleased about the fact that we're now supporting actual clinical processes in both locations, both the site in Belgium, the site in Houston. it's a very nice achievement, and it's something that we've been working towards for a long period of time.

So we've talked a lot about this over the last couple of quarters, but IntegriCell is as an organization and as an asset is going to be a very important driver for long-term revenue and margin expansion. It's a long cycle time for onboarding. It typically takes -- it could take 12 to 18 months in some cases to onboard. And so we do have active projects ongoing. We have additional clients that are coming on board now. And so our overall outlook is extremely positive.

From a learning standpoint, it's been extremely well received. And I think one of the key elements here is the fully integrated platform, right? So our fully integrated service platform, which includes our biologistics, bioservices and our initial clients are using all of our service competencies. And I think that's a very important learning for our team as we harmonize and optimize those processes to really drive efficiency for our clients.

Great. And then maybe switching to the EBITDA side. Do you think you could walk us through some of the assumptions to get to those -- that 2H positivity. It seems like there's some facilities ramping, so that should help and then also the commercial therapies mix. But if you could just walk through some variables there and if there's any areas of upside, that would be helpful.

Yes, certainly. I think if you look at our Q1 performance, obviously, we're very close to breakeven on the adjusted EBITDA side with a negative $0.6 million. We certainly can reiterate reaching positive EBITDA in the second half of the year. This is obviously going to be driven by the revenue growth that we see.

You mentioned some of the initiatives, the investments that we have. Those are really going to drive operating leverage in '27. So the achievements for Q2 of this year are really driven by the current organic revenue growth. The new facilities, those are investments we've begun in 2025, and we're completing now in '26. They're really going to drive further enhancement of our profitability and adjusted EBITDA in '26 and beyond.

And your next question comes from the line of David Saxon from Needham.

I'll echo my congrats on the quarter, a really strong start to the year. So in the script this quarter and last quarter, you talked about AI initiatives that are helping reduce OpEx. So I would love to understand just how durable that is and whether that can be applied to, I guess, more of the business? Or are we kind of seeing the full extent of the savings potential?

Yes, David, all of our AI initiatives are durable, and they're focused on internally to enhance our efficiency and our effectiveness within the company. It's another tool. It's a very powerful tool. It will reshape our business, I'm sure, over time, as it will on most other businesses as it has an impact on business and had an [ better ] impact on society. So we're very excited about our AI initiatives, but they're focused on practicality today on improving our efficiency and our effectiveness on internal operations.

Okay. And then maybe my second one might be for Robert. Just on the supply chain centers in Paris and Santa Ana, both in the second half. I guess what's baked into guidance from those 2 starting to come online when could we start seeing customer audits of those facilities? And then anything from a gross margin perspective we should be aware of?

No, absolutely. Yes. So look, these initiatives that we started in 2025 are going to be completed this year. One is the Paris, France site that we already went operational with our biologistics in November of last year. So that's already starting to ramp and clients are doing their audits. We're going to complement that with our bioservices services in Q3 of this year.

And then the second one is the Santa Ana, California site that gives us obviously a significant West Coast presence. It's consolidating 3 of our current existing locations into one and expanding that to about 94,000 square feet to offer biologistics, bioservices consulting, testing and ultimately also have space for IntegriCell. So those are significant initiatives that we have underway that are really driven by client demand.

And from a guidance perspective, the revenue contribution is obviously smaller because they're just going online in the second half of the year. Clients certainly will conduct their audits of the facilities this year, and they'll start contributing obviously more significantly in 2027.

Great. And anything on gross margin from that or just generally speaking, like how should we think about gross margin?

Yes. I think what we mentioned in our year-end, and that still applies, albeit we did come in higher on services gross margins than I had initially expected. But we did expect gross margins definitely in the second half to start rebounding, have some pressure in the first half of the year, which we didn't really see in Q1. But certainly, it will start coming back more significantly in the second half of this year.

And your next question comes from the line of Subbu Nambi from Guggenheim.

This is Ricki on for Subbu. I'll keep it to one and a follow-up. So the commercial cell and gene therapy revenue grew 26% year-over-year in the first quarter. Would you say that's the right growth rate that we could think about for the year? Or should we expect more acceleration as newer approvals ramp? And is the growth concentrated in a few key therapies like CARVYKTI? Or is it broad-based across your support and commercial products?

No, I would -- on commercial revenue, look, if you look at in general research reports on the market, they will range anywhere between on the low end, 20% on the high end, 40%. I mean you're absolutely right, we saw solid revenue growth on the commercial side. We do expect that '26 will be a very good year for commercial revenue.

And the guidance -- in terms of the revenue guidance is really based on the existing commercial therapies that we're supporting. So while there may be some revenue contribution from new approvals, the guidance really is looking at the existing platform that we have for 2026.

With -- sorry, it's Tom jumping in, Ricki. Bristol-Myers and J&J have already reported, and they did report a strong Q1. We can't really talk about the rest of our commercial therapies we support because they haven't reported their quarters yet.

And your next question comes from the line of David Larsen from BTIG.

Congratulations on the great quarter. Sticking with the idea or the theme of commercial products, can you just remind me how many commercial products you're supporting now? And did I hear you say that you could have potentially 8 more launch within the next 12 months?

We're supporting 21 today, Dave. And yes, there are 8 potential more approvals of new therapies this year. 5 of them already have PDUFA dates that's dates set by the FDA when they plan to make a decision.

And can you talk a little bit about the dynamics of a commercial product that you're supporting versus a clinical trial product? Like is there a difference in margins -- or is there any sort of difference in revenue per, I guess, product that you're supporting? I guess what I'm getting at is on the commercial side, since they're in the market being used, I would think that there would be much more revenue potential per product because it's basically being used across the world for patients. It's not limited to one specific clinical trial. So just any color there on the revenue potential and margin relative to clinical trials.

Well, I think there's a couple of things related to the commercial therapies. One, obviously, just the pathway from us supporting the clinical trials, we then work with their commercial team in preparing for the launch of the commercial therapies, whether it's in one country or globally. So we're part of the launch team in a way, and we provide program management that's built separately as well.

But when you see the increase in commercial revenue, it's really driven by the patient population, right? So as more and more commercial therapies come to market, as more and more commercial therapies move from the teaching hospitals to regional settings or to the outpatient settings, so does really the acceleration of patients being treated occur, and this obviously drives more revenue.

The other part is, obviously, we're continuously expanding our services platform. So initially biologistics, adding bioservices, ultimately adding IntegriCell cryopreservation services. So that further expands the revenue on a per patient basis as we provide our services along the supply chain of the cell and gene therapy market.

Okay. That's very helpful. And just one more quick follow-up. Obviously, your revenue growth this quarter versus, call it, 2 years ago, huge, huge positive this quarter, obviously. Just what do you attribute the resurgence in growth to? Is it simply a matter of the cell and gene therapy market coming back after everybody has worked through the IRA? Just what do you attribute this impressive growth to?

I think it's a number of things. One, obviously, as I mentioned, that we've broadened our revenue stream. So you saw bioservices, which is a newer offering, increase really over the last couple of quarters, 20% plus year-over-year, and we expect that to continue.

On the product side, we do see, and we saw that in the second half of '25, demand normalizing and coming back. So there's really -- if we look at all of our different revenue streams, we're seeing stronger demand, demand picking back, and that's been driving revenue in the last 2, 3 quarters of '25 and also driven a very, very strong performance for Q1 of this year, which led us to increase the guidance for the full year.

And your next question comes from the line of Richard Baldry from ROTH Capital.

So curious on the commercial acceleration, if it's been concentrated around the CAR-T area with the regulatory burden sort of easing? Or if you think that's still a catalyst that's ahead that hasn't really had an impact yet?

The cell therapies are the majority of our commercial customers, Rich. The gene therapies have had -- I think it's kind of public out there and even start, but the cell therapies are pulling the wagon that's Bristol-Myers, Gilead, J&J.

And you look at our clinical trial portfolio, close to 90% of the clinical trials we're supporting are autologous allogeneic cell therapies.

And your next question comes from the line of Matt Hewitt from Craig-Hallum Capital Group.

Nice start to the year. Maybe first up, regarding the Fusion 800 series, could you talk a little bit about the pipeline? You mentioned a little bit about the positive response and obviously, a couple of patient adoptions already, but I'm just curious what that pipeline looks like.

It's kind of early to comment on the pipeline. We sell through distributors. And so the first thing we do is get our distributors excited about the Fusion 800, and they are. And so we're moving out very nicely, but it's early to comment on the pipeline.

Got it. And then maybe switching gears a little bit. Obviously, we're approaching a year since the REMS was removed. And obviously, there was a lot of buildup as they were moving the patients out of the hospital to some of these ambulatory and other centers. And I'm curious of that momentum that you initially saw, has that continued? Are you seeing that opportunity continue to expand beyond the core hospital setting? And if so, what can that mean for growth later this year and into next year?

Tom, you may want to comment on that?

Yes. It's definitely -- you can look in the companies that already reported J&J and Bristol and their outpatient growth and their community hospital growth is really helping to drive their revenue, which in turn helps to drive ours.

And your next question comes from the line of Mac Etoch from Stephens.

Maybe just a follow-up on the margin aspects that you all highlighted in the previous questions. MVE product margins were relatively light compared to our expectations. So I'd just like to get a sense of what you're seeing in terms of the storage industry in general and how energy prices are factoring into performance in the quarter and how that's expected to factor into the remainder of the year?

Yes. No, on the margin side, energy prices have not factored into the quarter for our products business. It's really purely a result of specific product mix. If you look at year-over-year margins, they're pretty close to each other. Sequentially, it's down, but it's really related to product mix that we typically see, especially in the first quarter of the year. So there's no really -- there's no pricing erosion or competitive element. It's product mix related.

I appreciate that. And it's been, call it, 6 months since funding really started to tick back up. As you look at how 2Q is shaping up quarter-to-date, what can you tell us about the level of activity and sentiment that you're seeing within your customer base today?

I think overall, it's obviously very good for the industry and especially for companies that are in need to raise funds to drive their clinical trial portfolio. Look, a lot of the clients that we serve are very well established, very well funded, especially look at the huge number of Phase II and Phase III we have. They're really getting close to the finish line pre-commercial.

So I don't think that we see a huge risk there on the funding side. It's really mostly on smaller companies in need of funding and it's certainly good for the industry to see funding coming back with strong, strong funding, especially in the month of April of this year.

Maybe to just peek under the hood a minute with our clinical trial count, it increased by 6 net sequentially. However, there were 29 new trial adds in the quarter. and 23 removed, there's the net 6. But of those 23 removed, 16 of the trials were completed. That's a great thing that shows the maturation of our pipeline. That means ones are going to go to 2 and twos are going to go to 3.

And your next question comes from the line of Matt Stanton from Jefferies.

Robert, maybe just one to close the loop on margins. Just given some of the inflationary pressures we've seen over the last few months on commodities and logistics side, can you just help remind us your pricing structure? I believe you're able to pass along that uptick as part of the contracts in place. But can you just kind of remind us the mechanics on the pricing side as it relates to some of the inflationary pressures coming back into the P&L type and the macro for the rest of the year?

No, that's a very valid question. Look, in transportation and logistics, so that component of our solution, fuel surcharges are the norm. So it may go up or down, but fuel surcharges are passed on to our client base. That's common business practice. So it does not impact our gross margins as a company.

And from a product side, we really haven't seen an impact from the increased prices, oil prices at this point. But we're certainly keeping an eye out on it like everyone else.

Okay. And then maybe just on the product side. I think, Jerry, you said that market could grow high singles. I think prior, you guys thought products could maybe be mid-singles for the year, maybe high singles if things kind of came back better after a strong 1Q, do you feel like products is more like a high single-digit business in '26 than mid-singles for you? I just want to clarify that in terms of what you're penciling in for product growth in '26.

No, I do feel like it's high single growth -- high single-digit growth, Matt. It seems like it's solidifying in every aspect across the globe. So I have no reason to think any differently.

And maybe, Mark, just one for you to go back to IntegriCell. Now that you've seeing the customers in those 2 sites start to actually move product, any finer point you can talk to just in terms of the volume or the size of product you expect there? I know it takes a while to kind of get things validated and started. But now that they're started, I guess, how meaningful even though it's a couple of customers could that kind of be as IntegriCell ramps up? I think prior, you had been pretty bullish in terms of the revenue opportunity given the number of kind of products and services you're pushing through as part of IntegriCell.

Matt, we are bullish. We're bullish about everything that we do. And every -- since we formed the company, we've set standards in the industry. IntegriCell is another example of our industry-leading movement forward based on what the markets need, based on conversations with clients and what they need.

IntegriCell is off to a good start, I would say. And we always -- we would like to have a more robust start no matter what it is. But it's off to a very good start right now and it's gaining a lot of attention. But it does take time for these things to take hold for other clients to come in and for our integrated services approach to take effect. So stay tuned. As Mark said, it will be unquestionably a very important contributor to Cryoport in the future.

There are no further questions at this time. I will now hand the call back to Mr. Jerry Shelton for any closing remarks.

Thank you, operator. Ladies and gentlemen, thank you for your questions and our discussions. They've been very good. I appreciate them very much.

In closing, I'd just like to remind you that we continue to be the market leader, and we have had a great start to 2026, marked by 16% revenue growth year-over-year and strong double-digit growth across both our reporting segments. Our Life Sciences Services segment grew 18% year-over-year, driven by 21% growth in BioStorage/BioServices revenue, a 26% increase in revenue from commercial cell and gene therapy support and clinical trial-related revenue growth of 18%.

And at this time -- at the same time, rather, our Life Sciences Products segment grew by 15%, driven by global demand for MVE's cryogenic systems. Remember, MVE is the world leader in cryogenic systems. Our top line growth was accompanied by solid gross margins contained operating and continued operational discipline, which resulted in a $2.2 million year-over-year improvement in adjusted EBITDA from continuing operations, pushing us further down our pathway to profitability.

Based on these results and the progress we have made with our strategic initiatives, we're more positive on our outlook for the year than when we last spoke to you in our year-end earnings call, and that's led us to raise our full year revenue guidance as we continue to see opportunities ahead of us. We look forward to keeping you up to date on our progress.

We thank you for joining us this evening. We appreciate your continued interest and support, and we're looking forward to speaking with you again when we report our second quarter financial results. We wish all of you a good evening.

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

Good afternoon, and welcome to Cryoport's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I will now turn the call over to your host, Todd Fromer, from KCSA Strategic Communications. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements.

All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission, and those described from time to time in the other reports, which we file with the Securities and Exchange Commission. As a reminder, Cryoport has uploaded their fourth quarter and full year 2025 in review document to the main page of the Cryoport, Inc. website. This document provides a review of Cryoport's financial and operational performance and a general business outlook.

Before I turn the call over to Jerry, please note that because of the strategic partnership that has been established with DHL and the related sale of CRYOPDP to DHL, CRYOPDP's financials, which were previously a part of Cryoport's Life Sciences Services reportable segment are now presented as discontinued operations. Cryoport previously provided quarterly historical information on this basis for fiscal year 2024 and our first quarter 2025 in review document, which remains available on the Cryoport, Inc. website. This information is intended to support the financial modeling efforts of those needing this type of information. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2025 revenue guidance.

It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd. We have a great report for you today, ladies and gentlemen. But before we begin, with us this afternoon is our Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen.

Today, we reported our full year results for 2025, which was a year of strong progress for Cryoport. We delivered full year revenue from continuing operations of $176.2 million, exceeding the high end of our prior guidance and reflecting continued momentum across our core markets.

In the fourth quarter, we again achieved double-digit revenue growth driven by expanding commercial cell and gene therapy activity and revenue from the support of commercial cell and gene therapy increasing 29% year-over-year to a record $33.4 million for the year. Commercial cell and gene therapy revenue in the fourth quarter represented 20% of our overall revenue, while clinical trial revenue remained solid, growing 14% year-over-year to $47.1 million.

We concluded 2025, supporting a record 760 clinical trials and 20 commercial therapies worldwide. Our clinical trial support showed a net increase of 59 over the previous year and represented approximately 70% of total trials for the cell and gene therapy industry.

Looking ahead to 2026, based on the information that we have, we anticipate another 13 BLA or MMA (sic) [ MAA ] application filings, including 2 of which have already been filed, 9 new therapy approvals and an additional 2 approvals for label or geographic expansion.

In the near term, Cryoport has 3 customers that are anticipating new therapy approval decisions in March and April of this year. We believe our clinical trial pipeline is spring loaded with 86 clinical trials in Phase III and 361 clinical trials in Phase II. Remember, most of the cell therapies that were approved today were from Phase II. In our opinion, this market-leading base will drive the growth of our commercial revenue in the near and the long-term.

We continue to execute on our mission of expanding services to the life sciences by broadening our revenue streams and capturing more revenue per client. For 2025, revenue from our Life Sciences Services segment increased 18% year-over-year, including 22% growth in BioStorage/BioServices revenue.

Our performance reflects the expanding scale and scope of the clinical and commercial programs we support and the trust our customers place in our comprehensive end-to-end supply chain solutions.

While our primary focus remains on accelerating revenue growth and strengthening our market position, we continue to enhance our operational discipline along -- across the organization, as we advance on our pathway to profitability. In 2025, our cost reduction initiatives contributed to our gross margin of 47%, accompanied by a $12 million year-over-year improvement in adjusted EBITDA. With our progress to date, we anticipate achieving positive adjusted EBITDA in the second half of 2026.

Turning to our Life Sciences Products segment. Revenue grew 7% year-over-year in 2025. MVE Biological Solutions focused on execution and innovation and continues to further enhance its position as the global leader in the production of high-quality cryogenic systems. Recently, MVE launched its integrated condition monitoring solutions for its dry vapor shippers. These novel condition monitoring solutions are integrated with each door, combining MVE's trusted cryogenic systems with advanced real-time conditioning monitoring technology supplied by Tec4Med, another Cryoport company. This system communicates with MVE's new Cryoverse, a cloud-based data capture and shipment management system.

More recently, MVE launched its Fusion 800 Series, a revolutionary self-sustaining cryogenic freezer that can fit through a single door, which opens up substantial market opportunities. These revolutionary cryogenic freezers eliminate the need for continuous liquid nitrogen supply, delivering exceptional reliability, safety, and sustainability in a compact footprint that is designed for settings where there is limited space and no readily available sources of liquid nitrogen.

At Cryoport Systems, we increased our internal investments to support the traction that we are seeing across our broad portfolio of cell and gene therapy clients. These strategic investments include the completion of our Global Supply Chain Center in Paris, France, the expansion of our Belgian operations to accommodate a key commercial client, and continuing the build-out of a Global Supply Chain Center in Santa Ana, California, which consolidates 3 existing facilities into a single expanded campus and enhances our service capabilities. Of course, one topic of the day is AI, and it is certainly a tool we are embracing.

As a part of our overall digital strategy, we are actively leveraging generative AI to enhance internal workflows and day-to-day operations. Our focus is on enabling employees to use secure enterprise-approved generative AI tools to reduce manual tasks, accelerate execution, and improve accuracy and consistency of outcomes.

These focused efforts emphasize practical adoption through education, hands-on support, and real production use cases tied directly to current business needs. There's no doubt that AI is reshaping our business and will play a significant role in our future.

In 2025, we reported a strategic partnership with the DHL Group, which included DHL's acquisition of CRYOPDP. This action was completed in the second quarter of 2025 and provided Cryoport with a substantial capital infusion. Over time, we expect this relationship to enhance our position in APAC and EMEA regions and strengthen our competitive industry profile by leveraging the global scale and capabilities of this key strategic partner.

As a part of our continuing strategic initiatives to embed our market-leading solutions in the cell and gene therapy ecosystem and improve our growth trajectory, we expanded our global partnerships by entering into strategic collaborations with Cardinal Health and Parexel. Both companies are leveraging Cryoport Systems' supply chain solutions in support of their complementary offerings in the cell and gene therapy space. These partnerships reinforce our position as a market leader in this space and the industry's drive to standardize.

As we enter 2026 and consider global macro puts and takes, we believe that our full year revenue guidance of $190 million to $194 million is an appropriate starting point for the year. On a second point, we anticipate achieving positive adjusted EBITDA in the second half of 2026.

There's a lot coming into focus for us, and we are very excited about our prospects for 2026 and intend to capitalize on our current momentum, leadership position as the only pure-play temperature-controlled supply chain integrated platform supporting the life sciences industry's largest portfolio of clinical and commercial cell and gene therapies.

This concludes my remarks, and I now will turn the call over to the operator to open the lines for your questions and our discussion.

[Operator Instructions] Your first question comes from the line of Puneet Souda from Leerink Partners.

So first one, Jerry, or maybe for Robert. The guide that you have high single-digit, nearly 9% at the midpoint for the year -- could you elaborate a bit more on that? And in terms of the segments, how should we think about the growth in biologics and the services and the MVE? And given the commercial momentum, commercial therapy momentum that you're seeing, how should we think about that growth in -- for the full year? And I have a follow-up.

Okay. So there are several questions in that request, Puneet. So I'd like to start to kind of parse those questions. So your question -- the first one is how we feel about -- that was your last point about how we feel about the growth of cell and gene therapy for 2026. Is that correct?

Yes. Well, on the commercial side, I mean, what's your growth expectation for commercial therapies? And then also, if you can provide more color on the segments, each of the segments, the BioLogistics, BioStorage, and the MVE?

Okay. So I'm going to start with the last question first, and I'm going to turn it over to Mark, okay, because he has a view on this. But we do expect continued progress with our existing customers, and we do expect to be bringing on other commercial therapies during the year.

It does take time for them to ramp up, but they will have some impact. And some of those that we've already brought on will have a continuing impact. And Mark can name some of those names perhaps, but we do try to avoid commenting directly on customers' business. So in general -- let me turn it over to Mark and let him answer the rest of that.

Yes. So Puneet, obviously, we typically don't furnish guidance on composition by type. We did increase our commercial revenue by 29% in 2025, and it's now eclipsing 20% of our overall revenue.

Looking at '26, we do expect to have another good year in '26, although we haven't disclosed the percentages associated with the commercial revenue at this point.

Puneet, there's no doubt about it that commercial therapy will be the driver of our future. I mean, it is the fastest-growing market. And as I mentioned earlier, we're forecasting 9 new therapies in 2026, and we're -- furthermore, we're forecasting 11 BLA/MAA filings to take place.

As I mentioned in my comments, we think we're spring-loaded. We have 86 trials in Phase III. And then we have that -- I think it was 391 in Phase II. So we're spring-loaded for a brilliant future. And even if half of those in Phase III are approved, it's a fantastic for us. So...

Maybe just to add to it, we've grown in all of our service lines, and we've grown on our product side as well. We expect to continue to see growth really in all of our product lines and service lines. We always talked about services growing double-digit, obviously, commercial therapy being the strong grower within that. And then on the product side, single-digit growth, mid-single-digit growth, potentially high single-digit growth depending on how the demand is coming back.

So on your second part of your question, Puneet, and if I've missed anything or we've missed anything, you can come back. But second part of your question on BioStorage/BioServices. BioStorage/BioServices grew by 22% for this past year. We're very pleased with that. And it will continue to grow. In fact, we think it will pick up growth. I'm certain about that. And of course, it is driven by cell therapy approval. So it's a bright future for BioStorage/BioServices.

The third part of the question -- please go ahead, Puneet.

Yes. On the -- just on the MVE segment too, I mean, you had 2% growth, I believe, in the quarter. And -- correct me if I'm wrong. And how should we think about that?

Yes, we had -- we were up 7% for the year. And MVE is doing well. I mean, it's got -- we try to create these fountains of innovation throughout the company to make sure that we're moving ahead.

MVE has introduced its -- the integrated monitoring systems that I mentioned during my comments, but more -- equally important are the things that will be introduced in this next quarter or in this quarter, as a matter of fact. So -- and we've introduced the Cryoverse.

So you're going to see MVE also adding some services to the product that is producing. But remember that Fusion 800 opens up a vast new market for us. I mean, vast because there are many facilities on second floors in countries around the world that can't get a large freezer on that second floor that need a large cryogenic freezer. Hospital pharmacies will like this product as we move forward and as allogeneic therapies are developed.

Super. And then just a quick clarification on Q1. Any color you can provide there would be helpful. Just -- and I wanted to know if there are any flight cancellations disruption from any of the geopolitical flight cancellations that you're expecting in Q1?

There's nothing that we're expecting in terms of cancellations. And today, there's been minimal impact on us. So nothing to report there at this time.

Got it. And then color on Q1?

Yes, we've had a solid start to Q1, Puneet. We're not expecting a light one like some other life science companies are.

Your next question comes from the line of Anna Snopkowski from KeyBanc Capital Markets.

Congrats on a great quarter and a nice guide for '26. So maybe to start, you mentioned in your prepared remarks that total biopharma funding and CGT funding, in particular, saw the strongest funding month in December in the past 4 years, I believe. So I was wondering what the usual lag is between the funding environment and maybe your customer conversations or orders? And then a quick follow-up.

Yes. So obviously, funding is dependent on the client. But on average, you'll typically see that kick in after about a half a year time frame. Some may be a little bit quicker, some may be a little bit slower, but it's a good average for you to consider.

Perfect. Then maybe just touching on the margin side of things. You mentioned that you expect positive adjusted EBITDA, I think, in the second half of '26. So could you just outline how you expect to get there and what operational or cost reduction milestones need to happen in order to achieve this?

Yes. It's really less about cost reduction milestones. You may recall in '24, early '25, we did take some initiatives and operational initiatives to drive improvements, and that was quite successful where we improved adjusted EBITDA of about $12 million year-over-year.

We are starting to invest in specific growth initiatives, and completing some of the initiatives that we commenced in 2025, in setting up our Global Supply Chain Center in Paris, and setting up our Global Supply Chain Center in California, which we're going to consolidate 3 locations and expand our footprint there to include BioService and IntegriCell.

We obviously have a lot of insight with our client base. If you kind of step back and look at how we're positioned, it's really an unmatched positioning. We serve about 70% of clinical trials, have a record 670 clinical trials, and we support 20 commercially approved therapies for which a majority are cell therapies.

So we have a lot of insight as to what's to come. We've been very successful in expanding our service offerings into BioServices, where we've seen strong growth. And so that expected growth, together with some of the efficiencies that we've identified will really drive the further margin improvement.

Yes. I just want to comment on the pushout of the adjusted EBITDA positive numbers out of the end of '25. Just want to -- so one of the key elements here is that we've seen specific client requests to accelerate certain business opportunities. And so our site in Belgium is a very good example of that where we had to build out in a very rapid time frame, GMP-compliant sterile kitting services for one of the very large volume commercial accounts. That is actually up and running.

So we were able to do this in record time, commissioned the site in December, and it is now contributing revenue, which will ramp significantly over the next few years. So we do still have to remain a little bit opportunistic on these types of opportunities, because they'll benefit the organization in the long-term.

Your next question comes from the line of Subbu Nambi from Guggenheim Securities.

Within the 2026 guidance, can you speak to what you expect from the macro environment or at the low end and the high end of your revenue guidance range?

In terms of -- I mean, obviously, if you look at the macro environment, it's quite volatile. If you look at specifically the markets that we're addressing, those have been progressing very nicely in spite of some of the challenges within the regulatory agencies and the macro environment.

If you look at clinical trials, we had a record increase year-over-year in clinical trials, and we see a lot of interest for the services that we're providing. So I think there's certainly an opportunity to beat the guidance that we're giving if we see some of the acceleration happening sooner.

I think the downside risk is really the same thing as for all other companies. It's more of the unknown of what may happen. But we don't really have specific risks identified at this point in time, and we feel quite comfortable with the guidance that we're providing.

As a follow-up, you discussed the outlook for FDA approvals, but what is assumed in the guidance for animal health and reproductive health growth contributions?

Yes. We don't typically disclose our segmentation by product segment. So I'm not sure -- and that's not something we typically outline.

Yes, it's moderate growth. I think the real growth drivers for us as a business is clearly the cell and gene therapy space on the services side. And then within that, in terms of growth drivers, it's really further advancing the commercial cell therapies.

There's a number of activities, some happened in 2025, the removal of the REMS requirement, which really started to -- we started to see our clients accelerating their therapies into the outpatient setting. And that's a significant move, which portends to higher number of patients being treated, and that again translates into additional revenue to us.

Your next question comes from the line of David Saxon from Needham.

Just two for me. I wanted to follow-up on some of the comments earlier about product growth. I think last quarter, you were kind of feeling good about high single digits for '26. It sounds like you might be thinking more around mid-single-digit growth for the year. So can you just give an update on MVE, the pipeline, the outlook there? Like was there any incremental softening since last quarter? Is that just kind of conservatism baked in?

David, I think that we pretty much addressed that we thought that we think our guidance is a good starting point for the year. There are a lot of macro risk out there, and we did assess those. And so our starting point for our guidance is that $190 million to $194 million, and we think it's a good starting point.

MVE continues to work on a stabilized basis. It's got a great forecast to budget for 2026, and it has innovation coming out of it on a constant basis now. So we think MVE is in good condition, but we're not forecasting growth more than the higher single digits, 7% to 8%.

Okay. And then I wanted to follow-up on some of the partnerships. Obviously, DHL, I guess, can you give an update there? Like is everything fully integrated and at a point where you can start to really see the benefits come through? And then you also mentioned Cardinal and Parexel. Can you just double-click there, like frame those and...

Yes. Let me talk about DHL first. If you look, DHL is a lumbering -- big lumbering organization. And I've got -- I want to go back to one of your points, your question a little bit earlier or comment, but after I talk about this. But DHL is a large -- very large organization, 600,000 employees spread all over the world. It takes time for them to mobilize and to -- and they don't act -- they can't operate as agilely as we do.

So it's going to take time for that relationship. That's why I said the promise of in terms of EMEA and Asia Pac and that impact. We are doing some things with them already. And we do have some cooperative endeavors underway. But for the full effect, it's going to take a while for that to roll out.

I'm going to let Mark comment on Cardinal and Parexel. But before we do that, you were talking about MVE and the 7% growth and all that kind of stuff.

Yes, I just want you to remember, the driver for this company is commercialized cell and gene therapies. And that -- as that happens, that will dwarf MVE. MVE is a crucial part of our business. It's a foundational business. It's an important company, and it's healthy and it has great cash flow. It has innovation. It's 70% of the market. It's the world leader. But it is -- it will not be as significant in terms of revenue proportionality in the future as it is today because cell and gene therapy will outgrow it. And now Mark can comment on those partnerships we have with the other 2 programs.

Yes. So obviously, what we're doing is focused on building out an ecosystem that supports the cell and gene therapy global environment. And one of the key elements of that strategy is to really define very strong partnerships with leading entities in the space that are complementary to what we do, but don't conflict with what we do. And Parexel and Cardinal Health are 2 very good examples of that.

So Parexel is a large CRO that really focuses on clinical trial design, FDA advisory services and clinical engagement. And then Cardinal Health is obviously order to cash management, reimbursement, regulatory support and then patient and provider support. And so us working closely with them really allows our mutual client base to have a best-in-class product offering.

Folks like Cardinal and Parexel have come to us because we are best-in-class from a supply chain services standpoint. These help drive the industry. And so we're focused on long-term partnerships that help drive standardization and efficiency of the industry over time.

[Operator Instructions] Your next question comes from the line of Mac Etoch from Stephens.

Maybe just one for me. I think you highlighted on your prepared remarks that a large portion of these therapies are getting approved out of Phase II already. And with the FDA officially moving towards like a default 1 pivotal trial, how do you anticipate this change impacting approvals and investments over the near term?

Tom, why don't you take that question?

I was going to let Mark do it.

I heard you say.

All right. Anything that's going to streamline the process, Mac, is a good thing in our view. It's about more patients getting treated on the commercial side. Commercial revenue is higher than clinical revenue because there's typically more addressable patients for a commercial therapy than a clinical trial, but I'll let Mark opine.

Yes. So obviously, I mean, if they follow through with a single pivotal and don't require a follow-up, that's beneficial to us. If they come back and require additional follow-up, then obviously, that may slow things down. But if you combine it with some of the other elements, in particular, the REMS requirement changes, that's going to be a huge driver for us because that really allows us to push into the community care setting and our client base.

If you recall, the vast majority of the addressable patient population is still in the community care setting. And so it provides a significant opportunity for upside on the already existing commercial products as well as the new ones that are coming to market.

Your last question comes from the line of David Larsen from BTIG.

Congratulations on a good quarter. Can you talk about the MVE or product revenue growth in the fourth quarter? It looks like it was up 2% year-over-year. For the year, it was up 7% year-over-year. So it looks like it maybe slowed a little bit in the fourth quarter. Why was that? And what will sort of drive the reacceleration in growth in '26?

David, you can't look at MVE systems on a quarterly basis and make too many judgments. I mean, the decisions for purchase of capital equipment that MVE manufactures is cryogenic systems is planned over a period of time. And many times, it's highly engineered in terms of the setting that it's going into the installation and its purpose.

So it's difficult to look at it. You're better off to look at an annual growth rate or a moving 12 months if you want to look at it as moving 12 months. But MVE is solid. It's a solid company and the markets seem to be -- and we certainly are trying to help stabilize those markets and there's nothing more to add there other than if you have some comments, Robert. But I think that's the summary.

Yes. And just to give you maybe a little bit more granular picture of 2025. When we looked at kind of the market growth and MVE starting to come back and demand starting to come back, we've seen that both -- on both sides of the product portfolio, the cryogenic freezers as well as the cryogenic transportation and cryogenic dewar portfolio. So -- and then from a regional perspective as well in the various quarters, we've seen really all 3 regions at certain times starting to see a pickup in demand.

So certainly, it's a departure from what we've experienced in '22, '23. And then with that, our guidance does assume some moderate mid-single-digit type of growth rates for '26.

David, I want to remind you of one other thing, and this is just a matter of explanation so that you're aware of it. I mean, MVE furnishes both Cryoport Systems and Cryogene with products, with cryogenic freezers as well as dewars. The number you're seeing, the 7% for the year, for example, is a net number. It doesn't include its sales internally. But -- so I just wanted to point that out.

Okay. And then 5 years from now, what percentage of total revenue do you think could be coming from commercial?

You'll have to -- we'll come back and talk with you about that. I can't tell you right off hand right now. And we don't -- I don't have a forecast for that. There's too many uncertainties right now for 5 years out; 5 years is a long time in this business.

Yes. We do model everything out, right? So -- but as the time frame goes out, there's more uncertainties that creep into the modeling, in particular, around the timing of new product launches and their adoption to the market. There's been products where the consensus from a market standpoint was this would be a very high-growth, high traction product and it disappointed, or vice versa.

There have been a couple of sleeper surprises where folks didn't anticipate much out of the product, and then it came in a lot stronger than anticipated. The key here to think about is, again, the portfolio effect, right? And so our focus is around capturing the plurality of the clinical market and then holding it through commercial activity and a commercial launch. So we're currently supporting 20 commercial products. You've seen the positive benefit over the last 12 months of that commercial portfolio, where our commercial revenue has been extremely strong from a growth standpoint. And we have a very strong prognosis on portfolio clients. We've already talked about the potential of another 9 approvals this year as well as additional geographic and market expansions.

As you look out further, that continues to expand out. And if you're looking at the support mechanism of those -- of our Phase II and Phase III programs, a significant percentage of those will have a decision from a regulatory standpoint over the next 3 to 4 years, which will really impact those numbers fairly dramatically, assuming that we get a reasonable return on commercial approvals.

Then you have to also look at, obviously, the impact of the REMS and the community care engagement, which is going to be a huge factor as it relates to what that growth rate looks like.

If our partners are successful in driving into the community care setting and the leader on that is really Janssen and CARVYKTI product where they've published data that shows that they're in the mid-30s now on a community care engagement standpoint. If they push that up to 50%, 60%, 70% and you have others that are doing the same, that's going to have a significant material impact, not only in the existing commercial products, but the new ones coming to market.

David, just a couple of other comments. I mean, while to add to what Mark is saying. I think you can undoubtedly say that in the future that we -- that cell and gene therapy, commercial cell and gene therapy revenues will be the dominant factor. It will be the dominant factor in our revenue. It will be by far and because it drives not only the BioLogistics, it drives the BioStorage/BioServices.

You saw in this last quarter, I think it was a quarter we grew about 23%. And what you're going to see over time is you're going to see as cell and gene therapy picks up, that is the commercial therapy approvals happen, you're going to see our growth rate come more in line with the growth of the industry because we -- the lower growth segments, which are foundational to what we do, will be less of a proportion.

So it's an interesting question. I just don't -- we don't have a specific answer, but directionally, we know where we're going. You have something else to add, Mark?

Yes. I just want to point out, if you go to Slide 6 in our presentation deck, that will give you some market data that should give you a reasonable understanding of the opportunity associated with our commercial portfolio at this point.

There are no further questions at this time. So I'm going to turn the call back to the management team for closing comments. Please go ahead.

Okay. One second. I wasn't prepared for that. Okay. Well, thank you for your questions. Very good questions and good discussion, and we appreciate those questions.

So in summary, we made some significant strides in 2025 with solid results showing full year revenue performance above guidance. Our Life Science Services business segment grew 18% year-over-year, including 22% increase in BioStorage/BioServices revenue and a 29% increase in revenue from commercial cell and gene therapy we support.

We concluded 2025, supporting a record 760 clinical trials and 20 commercially approved cell and gene therapies worldwide. Of the 760 clinical trials we support, 86 are in Phase III and 361 in Phase II, creating what we believe is a spring-loaded position to future commercial cell and gene therapy revenue streams.

In addition to our financial performance, we continue to advance targeted strategic initiatives, which are designed to strengthen our growth trajectory in 2026 and beyond. Based on our market position and industry insights, we are encouraged by the opportunities ahead, and we will continue to keep you updated on our progress.

Thank you for joining us on today's call. We appreciate your continued interest and support and look forward to speaking with you again when we report our first quarter financial results for 2026. We wish you all a good evening. Operator?

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.

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" Kanan, Corbin, Schupak & Aronow

" UBS Investment Bank, Research Division

" Needham & Company, LLC, Research Division

" Leerink Partners LLC, Research Division

" Jefferies LLC, Research Division

" Guggenheim Securities, LLC, Research Division

" BTIG, LLC, Research Division

" Stephens Inc., Research Division

Good afternoon, and welcome to Cryoport's Third Quarter 2025 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded.

I will now turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements.

All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made.

However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law.

In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections.

These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission.

As a reminder, Cryoport has uploaded their third quarter 2025 in review document to the main page of the Cryoport Inc. website. This document provides a review of Cryoport's financial and operational performance and a general business outlook.

Before I turn the call over to Jerry, please note that because of the strategic partnership that has been established with DHL Group and related sale of CRYOPDP to DHL, CRYOPDP's financials, which were previously a part of Cryoport's Life Sciences Services reportable segment are now presented as discontinued operations.

Cryoport previously provided quarterly historical information on this basis for fiscal year 2024 and our first quarter 2025 in review document, which remains available on the Cryoport, Inc. website. This information is intended to support the financial modeling efforts of those needing this information.

Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2025 revenue guidance.

It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd, and good afternoon, everyone.

With us this afternoon is our Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen.

During the third quarter, we continued our strong momentum, delivering double-digit growth in both our Life Sciences Services and Life Sciences Product segments. Notably, revenue from our support of commercial cell and gene therapy grew 36% year-over-year to $8.3 million, driven by the continuing global adaptation of these life-saving therapies.

It is imperative that the growth of the -- it is impressive rather it is impressive that the growth of the regenerative therapies market, which we believe is still in very early stage of development, has remained resilient despite ongoing challenging macroeconomic, political and geopolitical backdrops.

Within Life Sciences, revenue increased 16% year-over-year and represented 55% of our total revenue from continuing operations for the quarter. This included a 21% increase in the BioStorage - Bioservices revenue, underscoring the persistent demand for our integrated platform. Driving this growth is the rising prevalence of chronic and rare diseases, prevalence of chronic and rare diseases, coupled with continued advancements in cell and gene therapies targeting solid tumors and autoimmune diseases.

We also are encouraged by signs of stability in our life sciences product market, where revenue grew 15% year-over-year, driven by improved demand for our market-leading cryogenic systems.

In the third quarter, we expanded our product portfolio with the launch of MVE Biological Solutions next-generation SC4/2V and SC4/3V vapor shippers. These cryogenic systems models have been redesigned, utilizing innovative technologies to offer customers added protection during extended or challenging shipments and include several key advancements designed to enhance the performance and reliability.

MVE's newly designed condition monitoring solutions for these doors are integrated with each unit, combining our trusted cryogenic systems with advanced real-time condition monitoring technology supplied by Tacromed, another Cryoport company. These innovations reflect MVE's unwavering commitment to support the life sciences with advanced intelligent connected assets to safeguard vital biological materials.

Beyond our core systems and services, we are progressing on a number of other growth initiatives designed to better serve our clients and diversify our revenue streams. These initiatives include the onboarding of our first clients for IntegriCell, our cryopreservation services located in Liege, Belgium and Houston, Texas. These cryopreservation services are designed to address a critical aspect in optimizing the supply chain for the development and commercialization of cell-based therapies through high-quality standardized cryopreserved starting materials.

We're excited by IntegriCell's recent progress as it moves forward to become a significant revenue and profit generator.

Additionally, in late October, we opened the logistics portion of Cryoport Systems' new state-of-the-art global supply chain center at the Charles de Gaulle Airport in Paris, France. This 55,000 square foot facility provides us with increased ability to serve our clients in the European and global markets.

It is designed to support complex life sciences life sciences supply chain needs, including biologistics, bioservices and future cryopreservation services. An official grand opening is scheduled -- is to celebrate the launch of this facility will be held on November 20 with Bioservices opening in mid-2026.

In addition, we are also advancing toward opening a global supply chain center in Santa Ana, California, which is expected to come online in the second half of 2026. This facility will consolidate 3 existing locations and feature next-generation technology to optimize operations and client support. Complementing all of these activities, we have begun implementing our recently established strategic partnership with DHL Group.

Due to the -- to DHL size, this strategic relationship will take some time. And when completed, it will enhance our positioning in the APAC and EMEA regions and reshape our competitive profile within the industry by leveraging DHL's global scale and capabilities.

Regenerative medicine has been advancing steadily, largely driven by the expanding pipeline of regenerative therapeutics entering clinical development and commercialization.

Despite any short-term headwinds, cell and gene therapies have continued to enter and move through the clinical pipeline, which should ultimately result in growing revenue from commercially supported therapies.

Cryoport's temperature control supply chain solutions are supporting the largest portfolio of clinical and commercial gene therapies in the world with a record total of 745 global clinical trials and 83 of these in Phase III, representing approximately 70% of the cell and gene therapy clinical trials.

In the third quarter, 4 BLA MAA filings occurred and 3 more were filed in October. For the remainder of 2025, we anticipate up to an additional 7 application filings, 1 new therapy approval and 2 additional approvals for label or geographic expansions or moves to earlier lines of treatment. Of course, the timing of these filings may be impacted by the current government shutdown of the FDA in the United States.

While global trade conditions remain dynamic, Cryoport did not experience any new material impact from tariffs in the third quarter. Furthermore, we have, of course, taken steps to diversify our supply chain to mitigate potential impacts that could come as a result of tariffs, impacts not covered by these mitigations are covered by surcharges.

With the strong momentum we have achieved year-to-date and our progress across the board, we are updating our full-year 2025 outlook for total revenue from continuing operations to the range of $170 million to $174 million. Our team is dedicated to building long-term value for our shareholders. Cryoport is maintaining and growing its competitive differentiators as the only pure-play end-to-end temperature-controlled supply chain platform that supports the largest portfolio of clinical and commercial cell and gene therapies globally.

This concludes my remarks. So I'll now ask the operator to open the lines for your questions.

[Operator Instructions]

Your first question comes from the line of Kyle Crews from UBS.

Congratulations on the quarter. Maybe just to start, the high end of the guidance implies a sequential decline in revenues. At the same time, you're seeing positive momentum across the entire business. You have an increased number of commercial therapies supported higher number of clinical trials, and you've launched new products within MDE. Can you help us reconcile that with the implied sequential decline in guidance?

And then for a second question, can you discuss if the recent release of the triple FDA draft guidance is that support making clinical trials easier has resulted in an uptick in clinical trial interest at your company?

Well, you had a lot of questions in there. And I think Robert will start answering your financial questions, and Mark will address your FDA question.

Yes. Look, you're certainly right in terms of how you phrased the question. Given all the macro uncertainties right now, we think it's a responsible guide. It balances the momentum that we are seeing versus the macro conditions, such as the current government shutdown and the ever-changing tariff landscape. I think we've managed it to date very well. And we're obviously, of course, focused on profitable and disciplined growth.

If you look at the revenue guidance and the increase in revenue guidance represents about 8% to 11% revenue growth over the prior year from continuing operations. But as you said, at the same time, we continue to be very bullish on our market-leading position. We feel that our long-term growth rate will be close to that of the cell and gene therapy market, as you can see in our Q3 performance, and as more and more commercial therapies come to market.

In fact, if you look at our commercial revenue right now, it's already a fairly significant portion of our total revenue. I think it's roughly about 18%, 19% of total revenue. So we're trying to balance those 2 parts. One, the cautious view on the macro uncertainties, but at the same time, we are very bullish in terms of the outlook and bullish in terms of finishing the year strongly.

Mark, do you want to answer the FDA portion?

Sure. Assuming you're referring to the REMS requirement, is that correct?

No. They recently released 3 new draft guidances related to clinical trials. Yes.

Yes. So obviously, yes, some of the draft guidance announcements that you're talking of that came out recently, some of them are targeting some generic small molecule programs. Those don't have a significant bearing on our market. Those that are aimed at the orphan markets and those that are focused on driving biologics approvals much more quickly, are impactful to us and our clients, and we do believe that those will help drive more activity in the future from a BLA standpoint. Just turning to REMS because I think it's important to understand that one, too. So the REMS requirement, which has also one that's been announced, will have an even more impactful positive impact for us as it will drive the implementation and utilization of cell therapies into the community care setting. And I think if you look at both BMS and J&J's CARVYKTI revenue in Q3, both of them had very strong growth. And in fact, CARVYKTI folks even came out and said almost 80% of the patie.

Great. And then maybe just one last one. Can you discuss whether you're seeing increasingly different trends within gene therapy and cell therapy within the broader cell and gene therapy market?

Yes. I mean, obviously, there's a little bit of tentativeness around financing in the gene therapy space because of some of the challenges that have been seen, but that doesn't impact the long-term opportunity. And so there are still a lot of new start-ups in the gene therapy space. There's a lot of activity and investment that's going into the gene therapy space. But obviously, the lion's share of funding at this point is still going into the cell therapy side of things. And obviously, with the number of potential approvals moving forward later this year. We've got another potential, as Jerry mentioned in his introductory comments, and potentially another 7 filings this year, and potentially even another 1 new and 2 supplemental approvals this year. So there's very strong activity in the cell therapy space as well.

Just to round that off, Mark, just would point out in our review piece, we broke down by percentages the clinical trial portfolio that we have. And the number of gene therapies in there is a single-digit percentage, and the number of vaccines is even smaller. It's like 3%. So we're much more exposed to the cell therapy side of the world.

Your next question comes from the line of David Saxon from Needham.

Congrats on another strong quarter here. Maybe, Robert, I'll start with you. I didn't hear anything on EBITDA guidance. I think the expectation is to reach profitability on a quarterly basis sometime this year. So is that still the expectation? And then how should we think about profitability as it relates to 2026? Could you see that on a full-year basis? Or are there any meaningful investments we should be aware of?

Yes. No, thank you. As you can see from our '25 performance to date, the adjusted EBITDA, we improved it by over $10 million for the first 9 months, bringing our adjusted EBITDA loss in Q3 to $600,000. So we are getting very, very close to getting and crossing the line to positive adjusted EBITDA. From a cash flow perspective, cash flow from operating activities was positive for the quarter. We had about $2.2 million positive cash flow from operating activities. And we think we can get to positive EBITDA. We're very close to it as early as year-end. That was our target.

At the same time, I do want to highlight, we're obviously trying to balance some of the growth initiatives that we have with driving towards solid positive EBITDA. There are some specific client-driven growth initiatives that we have, including the global supply chain center that we're opening in Paris this month, as well as the IntegriCell platform that we started out a while back. And those, in some cases, require some upfront investments. So that's really balancing those 2 parts, but we're certainly making very strong progress towards that goal.

And overall, we like our momentum. We like the positioning that we're in, and our teams are working towards executing on that goal. In terms of profitability itself and crossing the line of profitability, we have not given guidance. Our main focus is really on executing on our initiatives, driving positive EBITDA, and obviously creating that pathway to profitability.

David, you've heard us talk about the pathway to profitability before, and we certainly are on that pathway to profitability. And as Robert points out, we're moving toward positive adjusted EBITDA. And so we think possibly we can get there in the fourth quarter and certainly early next year. And that's a surrogate for cash flow. But remember, we have a number of facilities, which I went over in my opening comments. I just mentioned a couple of examples, a number of capital investments taking place.

We know that those are the right capital investments. We vetted them thoroughly. We know that they're the right thing to do for the future. But as we're building those out in today's accounting, it does affect your income statement. So our pathway to profitability includes all the things that Robert said, plus building out those facilities and then starting to experience the operating leverage that comes with getting those facilities up and running and utilized.

Jerry, maybe my second one is for you. Just on product, that growth really improved versus kind of the first half. So maybe talk about what's driving that strength? How much of that is market versus some of those new products you called out, maybe driving some mix benefit? And then in terms of the backlog, I guess, can you talk about that at least qualitatively? And then what level of visibility does that give you into the product growth outlook as we head into 2026?

David, we talked about backlog a lot during the COVID period because we had an extraordinary period. But we don't talk about backlog now as much because we are on more normal -- we're in a more normal market, which is about a 6- to 8-week lead time. It's no longer 6 months or a year lead time. It's back to the normal, which is about 6 weeks lead time. So we do monitor our sales trends. We do monitor our order intake, and that order intake does give us indication that the market is beginning to stabilize. And of course, government shutdown hasn't helped us there any, but it still continues to go on. It hasn't helped us because it does slow down the government sales that are associated.

But so we're doing well in terms of the industry and the stabilization. There was no impact on the new things that I talked about in my comments and opening up. No revenue coming in from that. It wasn't time. It does take time for these things to get out. The 3 -- the 2 doors that were developed with the integrated condition monitoring at MVE are focused on the animal health business. And so that's a seasonal business, and there will be an uptake there. But we have a number of things going on at MVE.

Does that answer your question, David? Or is there other parts to it?

That was super helpful. I guess maybe if I could rephrase it, like how -- the market has been stable year-to-date. I guess as we think about our models for 2026, like do you -- is making the assumption that, that continues a fair assumption? And then with, I guess, those product launches in the animal health space, maybe some increased demand across the other end markets, like maybe how should we frame or how would you frame product growth potential for 2026?

I would look at it with stability and use a very high single-digit growth rate.

Your next question comes from the line of Puneet Souda from Leerink Partners.

So maybe first one on some of the cell therapy exits that we have seen. I mean you're delivering relatively strong growth. Some of it is comps, but some of it is just overall market stability, which you talked about. But just trying to understand if you could contrast with what we're seeing, Takeda exiting its allogeneic programs, Galapagos is winding down their programs. Novo is divesting its cell therapy assets. Are you seeing any downstream impact from those exits on your pipeline or the service demand overall? And then within that, as Jerry said, high single-digit growth -- is that still something you -- I mean, is that you're contemplating into 2026 and '27, just given sort of these exits? And maybe just provide us any context for backfilling some of these programs that might have been lost.

Yes, Puneet, we're honored that you're on the call because we thought you might miss it because of conflicts. But let me start, and then Mark will add to what I have to say.

First of all, the 9%, I said high single digits, so you said 9%, that's fine. But that supplies to MVE product segment and you mix product and services. And so in the Service segment, where you have Galapagos, you've cited and some of the other activity that's happened, that's -- that's normal to me. You should probably know this, but it's normal to have puts and takes. And people make their investments and other -- and sometimes they can support them financially going forward. Sometimes they can't. Sometimes they're rationalizing what they're doing, and we have no insight on that.

What we do know is we are continuing to grow. We continue to see robustness. We have an increase in the clinical trials that we support with 83 being in Phase III. I think it was 83 in Phase III. And we're doing well, and we see a continued buoyancy in the market. This science is not going to stop. It's going to change the way medicine is practiced around the world. It just takes time. And it has had some headwinds, but it's buoyant, it's strong, and we're growing, and we intend to continue to.

Do you want to add to that?

I think you answered it pretty well. The only thing I would just add is Jerry is right. I mean, I think some of the changes that you mentioned are really strategic portfolio decisions. I don't think they're market-driven decisions. There's also other companies that are putting a lot more money into and expanding their programs from a top 5 pharma standpoint. So we don't have a level of concern around that. As Jerry had mentioned, very strong pipeline activity, very strong activity from a regulatory standpoint. As we had mentioned, upwards of another 7 filings this year, upwards of potentially another 25 filings next year. So there's a lot of activity in the space, which will continue to expand the number of commercialized therapies and the revenue associated with those therapies as the market matures.

[Indiscernible]. Could I thing in there just to pile on?

Yes, Tom, please.

Just to point out, September funding in biopharma was quite strong, and October was the best month of the year so far. We had over 20 IPOs and follow-on offerings of greater than $100 million in October alone. So some of the programs you mentioned are falling off, but certainly other ones are coming in up and taking the place.

On the government shutdown piece and the implied 4Q guide, I'm just trying to understand how should we think about the segments within the guide for the fourth quarter, Bioogistics versus BioStorage, Bioservices versus the MVE Life Sciences product line. Maybe just help us understand -- how should we think about modeling each of those, if you could provide some segment commentary?

And just maybe just if you could pinpoint in the government shutdown exactly, I mean, what are customers telling you? What are some of the worries here if this shutdown extends into December?

On the first part of your question, Puneet, it depends on what you think about the government shutdown. Frankly, the government shutdown is temporary. Right now, you can't make a filing, you can't pay your fees for a filing. But that's going to end soon. It can't go on forever, and there's an election coming up, which I think will motivate a political end to the shutdown. And then we'll see some things open up. We'll see things start to move through, and we'll catch up.

So it's not going to last forever. The government shutdown is. And again, under the backdrop we've had, we've shown substantial growth in spite of any headwinds there.

Mark, do you have anything to add to that?

Yes, I think you answered it well. I mean, yes, from a service standpoint, we haven't seen any impact other than the delay in filing activity, which they just can't do because they can't pay -- as Jerry mentioned, their filing their application fees. That's the only impact that we've seen is there may be a short-term delay in some of the filing activity, but the service activity still remains very robust.

And then just looking at Q4 without going into too much detail, obviously, we expect year-over-year increase on the services side. On the product side, it largely depends on timing, especially if you look at some of the larger freezer orders or even some of the potential delays in government shutdown, that they could just have an impact on timing of whether those are going to come in, in Q4 or be shifted in Q1.

That's because they're capital expenditures and somebody has to sign off on them.

Does that help you?

Yes.

Your next question comes from the line of Matt Stanton from Jefferies.

Maybe one for Mark. Just on the commercial trends, you're tracking up over 30% here year-to-date. It sounds like you saw some approvals here early in the quarter to continue more filings and then I think next year, '25, which is a big number. Can you just talk about the durability of the growth in terms of what you're seeing here from customers? And as we think about that kind of 30% plus, how you feel about that on the commercial side into '26? And I mean, is there opportunity for that to accelerate even further if some of these things kick in on REMS or some of these filings kick in, and to your point earlier, start to get signed off and get out there? But just talk about the kind of growth algorithm on the commercial side.

Yes. I think as you focus, you're going to focus on two things. One is the existing therapies as they mature, they move to earlier line and they go through global expansion. And as we had mentioned earlier, I mean, both BMS and Janssen and J&J have come out with very positive comments around growth and their data -- their financial data supports that. [ Janssen ] said their goal is 10,000 doses by year-end and 20,000 patients by the end of 2027, which is a substantial increase. And then you have the newer therapies as they launch, they're also expecting significant ramps. Vertex has come out and said they expect to see CASGEVY start to ramp more significantly. And then we have other data on some of these earlier launches, so which most of it has come out at or ahead of guidance. So if you take those in addition to the new filing activity, we think it will remain robust in '26 and beyond.

Great. And then, Robert, maybe just to go back and know a few times just on the 4Q ramp. I mean, I know last quarter, you guys were kind of saying 4Q probably higher than 3Q, part of that seasonality. Obviously, 3Q came in better than we expected. Is it fair to say that the sequential quarter-over-quarter implied 4Q, I mean, the government shutdown, maybe some of the timing you talked about, I mean, is that kind of a low single-digit million impact tied to those and maybe erring on the side of conservatism? Just kind of thinking about three months ago, 4Q higher than 3Q and now we have kind of the opposite playing out. And maybe just confirm there was nothing kind of that fell in 3Q that you had previously expected to fall in 4Q.

No, no, there's not. But you already really framed it.

Yes. I think it's really balancing that and looking at our guidance. Certainly, we have upside potential, no question. But given some of the uncertainties, we felt that that guidance kind of reflects where we stand right now to acknowledge some of those other aspects that we discussed earlier.

Your next question comes from the line of Subbu Nambi from Guggenheim.

You recently announced the Cryoport Systems received ISO certification. Could you speak to what this means in terms of your customer win rate or any competitive dynamics? How meaningful is this?

I want Mark to speak to that. But in addition to that ISO, we've also won an award or two and certainly one that we're proud of, and we did help on that ISO.

So Mark, take it away.

Yes. So ISO 21973, which is really around the governing of handling of cell therapy-based materials is what we received that certification in. We are the first entity that has received a formal ISO certification. Others have claimed that they have compliant with it, but we actually have received a certification from the ISO governing body related to that. Yes, on a global basis. So what it really does is it reinforces us as the best-in-class and the gold standard as it relates to the management of these therapies on a global basis and reinforces, obviously, the quality paradigm that we have.

And I think as you look at our growth as it relates to commercial revenue as well as our clinical trial adds, the market continues to respond very favorably to that as they continue to put a larger share of the overall clinical trial count as well as the commercial activity into our portfolio. So we believe that will be a continued positive influence on decision-making by our clients and sponsors.

You might mention that award that we won also.

Yes, we actually won two awards, CPHI award, which is one of the larger chemical industry awards for excellence of supply -- temperature control supply chain solutions. And then we also won another one from a biotech agency, which also reinforces that in the quarter. So I think the markets are absolutely responding to our platform is best-in-class.

That's great. Any updates you can share on how you're progressing with your China first strategy? What milestones can we expect as we look to growth in that region for you guys?

We have not assumed any growth in China for the -- will not be assuming any growth in 2026. There's no change right now. We do have some efforts underway. It does take time to implement strategies of that nature. And we hope by 2027, it will be -- certainly one thing, we cannot ignore China. It is an advanced country. It has a very big population, and it has resources and it can move very quickly. So we will continue to work on our China strategies, but we don't have anything we can report right now.

Perfect. And last one for me. Is there a potential for a catch-up heading into 2026, just given the environment is improving, something that you touched on previously?

You're talking about a catch-up in terms of--- What are you talking about, Subbu, in terms of catch-up?

Catch-up as in ordering. Just do you anticipate there could be some sort of catch-up orders next year?

I think she's referring to the product side, guys.

Yes. When you talk about the products, I think what we said is it's really stabilizing. I don't think we can speak of that at this point in time. And in general, conceptually, obviously, more and more material is being developed that requires cryogenic storage and MVE being the largest global provider of storage and cryogenic systems, certainly, we will be the first beneficiary of that. But at this point, it's just stabilization of the market that we can see.

Your next question comes from the line of David Larsen from BTIG.

Congratulations on another very good quarter. It looks like the number of clinical trials, the growth rate year-over-year was the highest it's been in like 2.5 years. And just any thoughts on The Big Beautiful Bill Act, reductions in Medicaid enrollment, reductions in exchange enrollment, maybe as high as 10% or 30%. Does that matter or not? Any thoughts on payer mix? Are most people getting cell and gene therapies? Are they covered by commercial plans, not Medicaid and exchanges? Just any thoughts there would be helpful.

Yes. I personally don't think it's much impact at all. The vast majority of therapies, by understanding, are not being covered by public funds. They traditionally are typically private plans that are reimbursement at this point.

Okay. And then are there -- do you have any concerns around drug pricing like with price caps due to the Inflation Reduction Act or rebate flow limits on price increases? Has that entered into any conversations at all or not?

No, cell and gene therapies are exempt from all of that, Dave.

Yes. I was going to say the same thing. As said, yes, I mean, the White House has actually come out in support of cell and gene and their interest in continuing to support it in an aggressive manner. And there is -- they are exempt from some of those pricing constraints that the White House is currently working through.

They're also not impacted by any tariff talk either.

Okay. Great. So minimal regulatory risk heading into '26. Fantastic. And then in quarters past, you talked about the growth in number of clients at these bio storage facilities, I think, in New Jersey and also like allogeneic storage. Any color there in terms of like capacity or number of client growth?

Yes. I mean we're still continuing to onboard a significant number of clients at those sites, both existing and new clients. And so that rate continues to be very robust as evidenced by the sales data that we put forth publicly. So we anticipate continued growth in the Bioservices area into '26 based on that.

By the way, David, this is not a singular thing. It's not a singular strand. I mean our -- we built these on a strategic basis. We built them to support our clients and to create more of a one-stop shop and because clients actually prefer doing business with less vendors and especially one that they can trust. So it's kicking in, and our clients are beginning to take hold of our BioStorage Bioservices operations within Cryoport Systems.

Yes. We're averaging almost 2 audits a week at this point. So that's obviously a significant volume of new workflow that's coming into the facility.

So you're witness a strategy play out right now.

Great. One more quick one. IntegriCell, I get questions on that all the time. Just any more color there would be helpful. It sounds like you're building a new facility. Is that going to support global efforts for . IntegriCell? And do you have revenue coming in for that business yet or not? Just any more color would be helpful.

Well, let me start, and Mark can give you more detail. But IntegriCell is another strategic endeavor, and we do have a network in mind, but we are carefully going into the development of IntegriCell. As Mark said earlier, we have revenue coming in at both locations. But I want to see those locations closer to cash flow to positive cash flow before we add other operations. We do have plans for other operations. They will be added. The network will work. All the information that we've gotten so far is very encouraging. And now we're on the uptick by getting customers, clients and revenue coming through those 2 facilities.

And I'll just turn it to Mark after that.

Yes, Jerry, as Jerry -- what Jerry said is exactly right. We opened those facilities at the end of Q3 last year. And the tech transfer process takes time because it's part of the production process. So there's regulatory activity that needs to occur for adoption. But we have completed our first tech transfers from both biotech and top 10 pharma, and we have started to generate revenue from both sites, both the site in Belgium as well as the site in Houston, Texas. And our expectation is that it will -- revenue will ramp modestly in '26 with a significant ramp, almost in a hockey stick modality post '26.

Your next question comes from the line of Mason Carrico from Stephens Inc.

Robert, maybe just a quick one on margins. Just as this new facility comes online, can you just walk us through how the start-up costs and the ramp and timing have been factored into your model and just how you expect that to influence margins over the next few quarters?

It's a very good question. And it's again one of those balancing acts because you're absolutely right. We have new facilities going online. [indiscernible] went online, as Mark mentioned. We have a Global Supply Chain Center in Paris by the Charles de Gaulle Airport going online with the official opening being in in a few weeks from now. At the same time, we are seeing some operating leverage already of the existing facilities, and that allowed us to show gross margins reaching 48% and even higher on the service side in particular.

We do typically have start-up costs that we run the SG&A. But then as we open the facilities, you'll see some impact on the margins. So while we see operating leverages in some of the existing facilities that are driving higher margins, you'll have some margin depression by these new facilities coming online and starting to see revenue ramp over time. So that's -- as we start and really '26, '27 is really about that operating leverage, really about driving utilization of the existing footprint -- global footprint that we have that will ultimately drive the gross margins. Our target is 55% gross margins overall and a 30% EBITDA margin. And obviously, there's still some time to go to get to the gross margins, but we'll see that operating leverage kick in later in 2026.

Appreciate that. And just touching on those long-term margins. Can you just highlight your thinking in terms of timing around those as well? I know it's been a longer-dated proposition. I just kind of want to get your updated thoughts there.

Yes. We're not giving guidance on that at this point in time because it's really -- if you look at the cell and gene therapy market, it is still a fairly new market when it comes to actually commercialization of therapies. So we want to see more progression and more therapies come to market. But we're clearly on that pathway, as you can see in terms of the significant improvements to adjusted EBITDA as a first indicator, and we'll certainly drive that further into '26 and '27.

There are no further questions at this time. Turning over back to Jerrell Shelton, your line.

Well, thank you very much, and thank you for your questions and our discussions.

In closing, in the third quarter, we continued to see strong momentum in our business. This included double-digit revenue growth in both our core business segments. Our Life Sciences Services segment, the key driver of our future growth, grew 16% year-over-year, driven by 21% increase in BioStorage Bioservices revenue and a 36% increase in commercial cell and gene therapy support.

We also continue to see further steadiness in our Life Science product business, where revenue grew 15% for the quarter.

Cryoport is positioned as the critical temperature-controlled supply chain company supporting the life sciences that derisk the end-to-end delivery of cell and gene therapies worldwide.

Thank you for joining us today. We appreciate your continued support and interest in our company and look forward to speaking with you again when we report our fourth quarter and our full year financial results.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect.