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CHAMPIONS ONCOLOGY, INC. (CSBR)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: Revenue $17.0M (+42% y/y), gross margin 61%, GAAP diluted EPS $0.31; Adjusted EBITDA $5.149M (management rounded to $5.2M), driven by $4.5M inaugural data license and improved service margins .
  • First major data licensing agreement “worth up to $8.0M” signals monetization of deep multi-omic data platform; management highlighted transformative potential and growing pipeline discussions .
  • Guidance maintained: FY2025 revenue growth of 10–15% reaffirmed; long‑term research services margin target “in excess of 50%” reiterated, with near‑term lumpiness expected .
  • Trend backdrop improving but still tight: management noted cautiously better funding in biopharma, with larger pharma resilient and biotech still constrained; tariff headlines monitored but no direct impact cited .

What Went Well and What Went Wrong

What Went Well

  • Record revenue and profitability: $17.0M revenue, 61% gross margin, GAAP net income ~$4.5M; Adjusted EBITDA $5.149M on high‑margin data mix and operational efficiencies .
  • Strategic milestone: first data licensing deal (up to $8.0M) validates proprietary data asset; CEO: “transformative data business” potential as customers leverage AI/ML on deep multi‑omic datasets .
  • Services margin improvement: research services margin 48% vs. 35% y/y, reflecting cost actions and scale; CFO emphasized disciplined cost management and margin expansion trajectory .

What Went Wrong

  • Accounts receivable climbed to $15.8M in Q3 (vs. $10.5M in Q2), pressuring cash conversion despite net income; operating cash flow positive but impacted by AR build .
  • Environment remains tight: management reiterated lingering constraints across biotech R&D budgets; near‑term revenue/margin volatility expected despite long‑term confidence .
  • Estimate context unavailable: S&P Global consensus for Q3 FY2025 could not be retrieved at time of writing; inability to benchmark beat/miss vs. Street [GetEstimates error log].

Financial Results

Consolidated Performance (Fiscal quarters; oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$14.061 $13.489 $17.039
GAAP EPS (diluted) ($)$0.09 $0.05 $0.31
Adjusted EPS (diluted) ($)$0.11 $0.05 $0.36
Gross Margin (%)49.7% 45% 61%
Operating Income ($USD Millions)$1.329 $0.732 $4.499
Adjusted EBITDA ($USD Millions)$2.0 $1.1 $5.149

Notes: Adjusted EBITDA in Q3 press release is $5.149M; management rounded to $5.2M on the call .

Segment Breakdown (Q3 2025)

SegmentQ3 2025 ($USD Millions)
Research Services Revenue$12.5
Data License Revenue$4.5
Total Revenue$17.0

KPIs and Balance Indicators (Fiscal quarters; oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Cash & Cash Equivalents ($USD Millions)$2.892 $2.754 $3.202
Accounts Receivable, net ($USD Millions)$9.032 $10.470 $15.782
Deferred Revenue ($USD Millions)$10.312 $10.220 $10.922
Gross Margin (%)49.7% 45% 61%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth (YoY)FY2025At least 10%–15% (Q2) 10%–15% reaffirmed (Q3) Maintained
Research Services Margin (long‑term target)Multi‑year“In excess of 50%” reiterated (Q1) Reiterated (Q2/Q3 commentary) Maintained
Near‑term revenue cadenceQ3 → Q4Slight sequential decline in Q3, reacceleration in Q4 (Q2 guide) Achieved record Q3; ongoing lumpiness noted; reacceleration into FY2026 expected Clarified timing
Quarterly Adjusted EBITDAFY2025“Remain positive” (Q2) Positive and record in Q3 ($5.149M) Achieved/maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Data Licensing & AIQ1: exploring monetization; operational rebound; margin >50% target . Q2: data licensing revenue stream imminent; transformative potential .First major data deal ($4.5M in-quarter; up to $8.0M total); deep multi‑omic asset positioned for AI/ML discovery; pipeline discussions ongoing .Accelerating validation
Funding EnvironmentQ1: cautiously improving; large pharma funded; biotech tight . Q2: lumpiness persists; cautiously optimistic .Environment still tight; tariffs not directly impacting; larger biopharma mix helping resilience .Gradual improvement
Services Margins & Ops EfficiencyQ1: GM 50%; cost actions; long‑term margin >50% . Q2: GM 45%; RS margin 48%; cost discipline .GM 61%; RS margin 48%; efficiencies + data mix lifted margins .Improving
Corellia (Drug Subsidiary)Q1: pursuing out‑licenses; capital raise efforts . Q2: banker engagement; minimize non-core spend .Raising capital externally; aim to preserve CSBR cash flow; potential additive asset for shareholders .Strategic financing progress
Regulatory/Competitive (Biosecure Act)Q1: potential tailwind vs restricted competitors .No new regulatory items; tariffs monitored without specific impact .Neutral-to-positive backdrop

Management Commentary

  • CEO: “Our third quarter was transformational, marked by our first major data licensing agreement—an important milestone toward monetizing our proprietary data platform.”
  • CEO (on strategy): “We are well positioned to take the lead… generating significant traction and enthusiasm for our initiative to build the world's deepest clinically relevant multiomic data set.”
  • CFO: “We delivered record breaking financial results this quarter, with revenue surpassing $17.0 million and adjusted EBITDA reaching $5.2 million.”
  • CFO (on margins): “Total margin was 61%, with research services margin of 48% compared to 35%… The increase in revenue coupled with our cost reductions led to improved service margins.”
  • CEO (on environment): “It’s still a mildly challenging time… slightly better than [~1.5 years ago]… pockets of targeted therapies continue to be exciting.”

Q&A Highlights

  • Data deal structure/pipeline: Licensing structured as a one‑time fee for a portion of data; active discussions with multiple partners across biotech/pharma on broader models (license-only vs. fees + milestones/royalties) .
  • Macro/tariffs: No direct tariff impact observed yet; broader environment remains tight, especially for smaller biotech; larger pharma activity continues .
  • Corellia financing: External capital raise at subsidiary level to avoid pressure on CSBR cash flows; aim to retain a meaningful stake at attractive valuation .
  • Differentiation vs data peers: CSBR emphasizes depth over breadth (deep multi‑omic per tumor vs. large longitudinal datasets); timing aligns with AI/ML capabilities .
  • Go‑to‑market for data: Dedicated GM (Matt Newman) and BD/data science team assembled over past 6–12 months to scale licensing efforts .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 FY2025 revenue and EPS was unavailable at time of writing due to retrieval limits; therefore, we cannot formally classify the quarter as a beat/miss vs. Street. Nonetheless, the magnitude of outperformance vs. internal trajectory (record revenue, 61% gross margin, record Adjusted EBITDA) suggests positive estimate revision risk in revenue, margin profile, and profitability, particularly as data licensing introduces a high‑margin mix component .

Key Takeaways for Investors

  • High‑margin mix shift: Data licensing ($4.5M in Q3) plus improved service margins drove GM to 61% and record Adjusted EBITDA; sustained margin expansion is a central thesis lever .
  • Monetization flywheel: First data deal (up to $8.0M) validates pricing power and opens recurring/royalty structures; dedicated team and pipeline discussions increase probability of follow‑on transactions .
  • Operational resilience: Research services margin at 48% with cost discipline; ability to deliver profitability in a still‑tight funding environment supports defensive characteristics .
  • Working capital watch: AR build to $15.8M merits monitoring for cash conversion timing; deferred revenue stable indicates durable demand but collection pacing key near‑term .
  • Guidance steady, narrative improving: FY2025 growth 10–15% maintained; long‑term margin target >50% reiterated; near‑term lumpiness remains, but reacceleration into FY2026 expected .
  • Strategic optionality: Corellia external financing can create additive value without diluting CSBR cash flow profile; potential future upside from pipeline milestones/licensing .
  • Trading implications: Catalyst stack—continued data licensing announcements, margin durability, and cash conversion improvements—likely to drive multiple expansion and estimate revision momentum; near‑term volatility from booking cadence remains a risk .