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CERUS CORP (CERS)·Q2 2024 Earnings Summary

Executive Summary

  • Cerus delivered a solid Q2: product revenue grew 16% year over year to $45.1M, positive non-GAAP adjusted EBITDA (~$0.8M), and narrowed GAAP net loss per share to $(0.03) .
  • Management raised FY24 product revenue guidance to $175–$178M (from $172–$175M) and reiterated IFC revenue guidance of $8–$10M; gross margin expected to remain near Q2 levels, and the team remains committed to adjusted EBITDA breakeven for FY24 .
  • U.S. platelet momentum and 100% adoption at Canadian Blood Services underpinned growth; IFC revenue rose to $2.0M vs $1.4M Y/Y with expanding hospital adoption and additional BLAs in process to increase capacity .
  • Likely stock reaction catalysts: the guidance raise, sustained gross margin at ~55%, and positive adjusted EBITDA, coupled with pipeline/regulatory milestones (EU RBC review, LED illuminator CE submission) expected later this year .

What Went Well and What Went Wrong

  • What Went Well

    • Raised FY24 product revenue guidance to $175–$178M on strengthening core platelet and IFC trends; management expressed confidence in exceeding prior expectations .
    • Achieved positive non-GAAP adjusted EBITDA (~$0.8M) and generated positive operating cash flow ($0.4M) in Q2; cash and investments at $71.2M .
    • Commercial execution strengthened: U.S. platelet demand/market share gains; CBS reached 100% adoption; IFC adoption broadened with peer-reviewed data supporting utility and more BLAs expanding capacity .

  • What Went Wrong

    • Government contract revenue declined to $5.4M (vs $8.9M) due to the completion of the U.S. Phase 3 ReCePI trial; management expects only a modest uptick as RedeS enrollment expands .
    • EMEA product revenue was only slightly up Y/Y; FX was a slight headwind (~1%) and regional growth remains more gradual vs North America .
    • No material inventory rebuild tailwind in Q2; while shelf-life extension helps operations, management is not assuming a rebuild as a top-line driver near term .

Financial Results

Actuals vs prior periods

MetricQ2 2023Q1 2024Q2 2024
Product Revenue ($M)$38.9 $38.4 $45.1
Government Contract Revenue ($M)$8.9 $5.0 $5.4
Total Revenue ($M)$47.7 N/A$50.5
Product Gross Profit ($M)$21.3 $21.3 $24.7
Product Gross Margin (%)54.9% 55.4% 54.7%
GAAP Net Loss per Share$(0.07) $(0.05) $(0.03)
Non-GAAP Adjusted EBITDA ($M)$(4.7) $(2.7) ~$0.8
Operating Cash Flow ($M)$(7.6) $2.0 $0.4

Q2 2024 actual vs estimates (S&P Global)

  • S&P Global consensus data was unavailable at the time of analysis due to an access limit. As a result, we cannot present “vs. estimates” comparisons for revenue or EPS this quarter.

Segment/Regional breakdown (Product Revenue)

RegionQ2 2023 ($M)Q2 2024 ($M)
North America$24.5 $30.8
Europe, Middle East & Africa$13.5 $13.7
Other$0.8 $0.6
Total Product Revenue$38.9 $45.1

KPI highlights

KPIQ2 2023Q2 2024
IFC Revenue ($M)$1.4 $2.0
Platelet Kit Growth – North America (Y/Y)—17%
Platelet Kit Growth – International (Y/Y)—7%
Platelet Kit Growth – Worldwide (Y/Y)—14%
Change in Treatable Platelet Doses – NA (Y/Y)—21%
Change in Treatable Platelet Doses – International (Y/Y)—11%
Change in Treatable Platelet Doses – Worldwide (Y/Y)—18%

Notes: “—” indicates KPI not disclosed on a comparable prior-period basis in the cited materials.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product RevenueFY 2024$172–$175M $175–$178M Raised
IFC RevenueFY 2024$8–$10M $8–$10M Maintained
Product Gross MarginFY 2024“Relatively consistent with early-2024 levels” (prior commentary) “Relatively consistent with Q2 levels” Maintained
Adjusted EBITDAFY 2024“Breakeven for full-year 2024” “Breakeven for full-year 2024” Maintained
Operating Cash FlowFY 2024Potential to be positive; not formally guided Focus remains on positive operating cash flows; no formal guide Maintained tone

Earnings Call Themes & Trends

TopicQ4 2023 (Q-2)Q1 2024 (Q-1)Q2 2024 (Current)Trend
EBITDA/Cash DisciplineFirst-ever positive adjusted EBITDA; targeting improvement in 2024 Target at least breakeven adjusted EBITDA for FY24; positive OpCF in Q1 Positive adjusted EBITDA in Q2; reiterates FY24 breakeven; positive OpCF in Q2 Improving, consistent focus
U.S. PlateletsStabilization and return to more typical ordering patterns Base U.S. business returning to growth Continued U.S. growth and share gains; standard of care positioning highlighted Strengthening
Canada (CBS/Héma-Québec)CBS nearing full implementation CBS approaching 100%; Héma-Québec validation ongoing CBS at 100%; Héma-Québec initial 2025, fuller 2026 Positive completion/next wave
IFC (Cryo/Fibrinogen Complex)Early traction; sales channels expanding Strong Q1; increasing hospital use and blood center channel Demand “real and growing”; more BLAs, increased capacity; Q2 revenue $2.0M Accelerating
Shelf Life ExtensionsConfidence in extending shelf life 12-month shelf life approved in March; benefits operations Filing later this year for 18-month shelf life; no inventory rebuild in Q2 Operational upside
LED Illuminator (INT-200)Development work ongoing MDR/CE roadmap in view CE submission planned; 180-day review cycle; launch expected 2025 Approaching launch
RBC Program (EU/US)CE Mark pursuit under MDR continues Active review with competent authority; timelines not fixed Awaiting CBG-MEB feedback (post-summer) then notified body; U.S. RedeS enrolling; PMA modular planned Regulatory progress
International ExpansionGermany, Europe pipeline; Middle East interest Middle East targeted growth; MDR/FDA approvals resonate Middle East, LatAm, APAC opportunities; China JV update by year-end on local study Building pipeline

Management Commentary

  • “We are raising our annual product revenue guidance range for the full year to $175 million to $178 million from our previous range of $172 million to $175 million.” — CEO Obi Greenman .
  • “INTERCEPT treated platelets remain the standard of care for platelet safety in the U.S.” — COO Vivek Jayaraman .
  • “We… posted product revenue of $45.1 million… [and] IFC product revenue of $2 million, up from $1.4 million… Product gross margins… were 54.7%… We continue to expect that gross margins will remain close to Q2 levels for the balance of the year.” — CFO Kevin Green .
  • “On a non-GAAP adjusted EBITDA basis, Q2 2024 generated positive adjusted EBITDA of just under $1 million… we remain steadfast in our commitment to deliver a positive adjusted EBITDA result for 2024 as a whole.” — CFO Kevin Green .
  • “We anticipate filing later this year for the 18-month shelf life… [and] did not see any significant rebuilding of inventories” — COO Vivek Jayaraman .

Q&A Highlights

  • Inventory and Shelf Life: No material inventory restocking in Q2; filing planned later this year to extend platelet kit shelf life to 18 months, which should support supply chain flexibility .
  • Canada Rollout: Héma-Québec validation essentially complete; initial pathogen-reduced volumes expected in 2025 with fuller implementation in 2026, following the CBS playbook .
  • EBITDA Outlook: With stronger back-half revenue, stable gross margin, and operating leverage, management expects continued strength in adjusted EBITDA in H2, underpinning FY24 breakeven target .
  • IFC Growth Drivers and Supply: Significant expansion opportunities both within existing hospitals and via new accounts; capacity rising with four BLAs approved and two more anticipated, supporting growth through 2025 .
  • Pipeline/Regulatory: RBC EU process awaiting competent authority feedback before notified body action; next-gen LED illuminator targeted for CE submission with ~180-day review and 2025 launch .

Estimates Context

  • S&P Global consensus for Q2 2024 could not be retrieved at this time due to an access limit, so we cannot provide “actual vs. consensus” revenue or EPS comparisons for the quarter. Management did not guide quarterly EPS; FY24 guide focuses on product revenue and adjusted EBITDA breakeven .
  • Implication: Sell-side models may need to reflect a higher FY24 revenue base (raise to $175–$178M), stable gross margin assumptions near ~55%, and improved adjusted EBITDA trajectory given Q2’s positive result .

Key Takeaways for Investors

  • Guidance raise signals confidence: FY24 product revenue outlook increased to $175–$178M; IFC guidance maintained at $8–$10M, with capacity expanding via additional BLAs .
  • Profitability milestones: Positive adjusted EBITDA in Q2 and continued commitment to FY24 breakeven, while generating positive operating cash flow; balance sheet liquidity at $71.2M .
  • Durable gross margin: Product gross margin held at 54.7% and is expected to remain near this level for the year, supporting operating leverage as volumes scale .
  • U.S. platelet momentum + Canada at scale: Core engine remains strong; CBS now at 100% adoption, with Héma-Québec poised to start in 2025 and ramp further in 2026 .
  • IFC as a growth vector: Q2 revenue of $2.0M and broadening adoption supported by real-world evidence; capacity expansion should enable unconstrained growth through 2025 .
  • Pipeline catalysts in 2H and 2025: EU RBC regulatory update post-summer; LED illuminator CE filing this year (target 2025 launch) provide medium-term optionality .
  • Near-term trading setup: Positive EBITDA print and a guidance raise are supportive; watch for regulatory updates (EU RBC, LED CE), shelf-life extension filing, and continued IFC hospital wins as incremental catalysts .

Other Relevant Q2 2024 Press Releases

  • ISBT congress presence underscored expanding real-world evidence for INTERCEPT and showcased LED illuminator progress (data on platelets/plasma and RBC program) .
  • Board appointment of Dean Gregory (ex-Fresenius Kabi) bolsters commercial and operational expertise amid growth and capacity expansion initiatives .
  • Logistics: Q2 results date and webcast details were announced July 18, 2024 .