Sign in
LB

LIFECORE BIOMEDICAL, INC. \DE\ (LFCR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $35.154M, down 2% YoY but up sequentially, with Adjusted EBITDA of $5.704M; GAAP diluted loss per share was $0.47 .
  • Revenue was on target with full-year guidance, which was reiterated at $126.5–$130.0M and Adjusted EBITDA $19–$21M; however, GAAP net loss guidance was widened to $(38.6)–$(36.6)M due to asset disposal loss, elevated legal expenses, derivative fair value changes, and higher interest/reorg costs .
  • Operational highlights included multiple new agreements with both new and existing customers, progress toward late-stage commercialization (including PPQ planning), and efficiency initiatives (live production monitoring, reduced consultants), plus monetization of an unused filler raising $17M to strengthen liquidity .
  • Liquidity stood at “a little over $30M,” including ~$5M cash and >$25M revolver availability, aided by proceeds and revolver paydown; management expects second-half operating cash flow positive and free cash flow neutral to slightly positive depending on timing .

What Went Well and What Went Wrong

What Went Well

  • Signed multiple new and expanded customer agreements, including a project expansion with a large multinational pharma; pipeline advancing with PPQ commitment late 2025/early 2026 .
  • HA manufacturing demand increased, with gross profit up $1.0M in the quarter on increased volumes/manufacturing variances; revenue remained on target with guidance .
  • Efficiency initiatives: live production monitoring, improved supply chain–operations coordination, enhanced training, reduced outside consultants, and pricing updates for inflation .
    • “We continue to identify meaningful areas that can improve our efficiency and productivity… and continue to reduce operational expenses as a percent of overall revenue.” — CEO Paul Josephs .

What Went Wrong

  • Gross profit declined $2.0M YoY and Adjusted EBITDA fell $0.7M YoY, driven by CDMO gross profit pressures, inventory/write-offs tied to a customer termination, and absence of prior-year favorable inventory adjustments .
  • GAAP net loss of $14.769M vs prior-year GAAP net income of $15.632M, reflecting higher interest expense, legal costs, and no repeat of the unusually large prior-year positive derivative fair value adjustment .
  • SG&A rose YoY to $10.093M, including $2.2M of legal expenses related to legacy matters; stock-based compensation increased versus prior year .

Financial Results

Quarterly Financials (GAAP and Adjusted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$24.700 $32.600 $35.154
Gross Profit ($USD Millions)$5.400 $11.100 $9.845
GAAP Diluted EPS ($USD)-$0.53 -$0.25 -$0.47
Adjusted EBITDA ($USD Millions)-$1.800 $6.500 $5.704

Margins (%)

MetricQ1 2025Q2 2025Q3 2025
Gross Profit Margin %21.81%*34.04%*25.04%*
EBITDA Margin %-28.70%*1.50%*-3.49%*

Values retrieved from S&P Global.*

Revenue Composition (Q3 YoY)

ComponentQ3 2024Q3 2025
Revenues (non-related party) ($USD Millions)$17.054 $16.233
Revenues, related party ($USD Millions)$18.650 $18.921
Total Revenues ($USD Millions)$35.704 $35.154

KPIs and Operating Items (Q3 FY2025)

KPIValue
Interest Expense, net ($USD Millions)$0.641 (net) and $4.840 related party
SG&A ($USD Millions)$10.093
Cash and Equivalents ($USD Millions)$5.417 (Feb 23, 2025)

Actuals vs Consensus (Q3 FY2025)

MetricConsensusActual
Revenue ($USD Millions)$33.229*$35.154
Primary EPS ($USD)-$0.15*GAAP Diluted EPS: -$0.47
EBITDA ($USD Millions)$4.636*Adjusted EBITDA: $5.704

Values retrieved from S&P Global.* Note: Company reports GAAP diluted EPS and Adjusted EBITDA; consensus “Primary EPS” and “EBITDA” may not be directly comparable to reported measures.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY2025$126.5–$130.0 $126.5–$130.0 Maintained
Adjusted EBITDA ($USD Millions)FY2025$19–$21 $19–$21 Maintained
Net (loss) income (GAAP) ($USD Millions)FY2025$(28.6)–$(26.6) $(38.6)–$(36.6) Lowered
Restructuring/Reorg/Stockholder Activist Costs ($USD Millions)FY2025~$10.3 ~11.5 (of which $10.3 incurred in 9M) Raised

Management also reiterated expectation of stronger second-half cash generation; Q3 call noted ~“$31M” total liquidity and a path to second-half operating cash flow positive and free cash flow neutral to slightly positive, subject to timing .

Earnings Call Themes & Trends

TopicQ1 FY2025Q2 FY2025Q3 FY2025Trend
Supply chain/customer demandAddressing a CDMO customer inventory normalization, targeting normalized demand by FY2026 Revenue mix/absorption improved; some early order fulfillment timing HA demand increase driven by a customer’s supply chain initiatives Improving stability
Western manufacturing/tariffs——Heightened interest in repatriating manufacturing; more “Western manufacturing” discussions post-tariff chatter Rising focus
Pipeline/commercialization25 active programs; 10 late-stage >50 opportunities; ~30% multinationals; pursuing late-stage/commercial site transfers SOWs signed; PPQ campaign planned late 2025/early 2026 Advancing
New customer wins4 new customers; Lindy Biosciences lead win Nirsum agreement for NRS-033 (Phase II) Added Humanetics BIO 300 tech transfer post-quarter; continued new adds Expanding
Operations/efficiency5-head isolator filler GMP-ready; doubled capacity Sequential gross margin improvement; overhead absorption; lower operating supplies/headcount Live production monitoring; improved scheduling; reduced consultants; pricing updates Improving
Legal/regulatoryNasdaq compliance regained; elevated professional fees Higher legal/audit costs (legacy matters) $2.2M legal expenses in SG&A; ongoing civil litigation costs Persistent headwind

Management Commentary

  • “Our revenues for the period remained strong and are on target for our guidance for the year, and our cash balance was strengthened through the sale of our unused filler.” — CEO Paul Josephs .
  • “We are reiterating our financial guidance for the fiscal year and expect revenue to be approximately $126.5 million to $130 million and adjusted EBITDA to be in the range of $19 million to $21 million.” — CFO Ryan Lake .
  • “PPQ programs… are a pre-commercialization requirement… we expect they will drive an increase in revenues, capacity utilization and ultimately, an improvement in our margins.” — CEO Paul Josephs .
  • “We continue to identify meaningful areas that can improve our efficiency and productivity… live production monitoring… updating our pricing with customers to account for inflationary factors.” — CEO Paul Josephs .

Q&A Highlights

  • Macro/manufacturing: Increased dialogue on “Western manufacturing” amid tariff discussions; qualitative interest from large pharma observed at DCAT .
  • Humanetics contract: BIO 300 tech transfer and pilot work; characterized around Phase II site transfer with perceived better value proposition .
  • Pipeline depth/quality: More large multinationals engaged; multiple on-site visits signal higher-quality funnel and strategy traction .
  • Cash flow/capex cadence: ~+$2M cash from ops in Q3; near free cash flow breakeven; second half expected to be operating cash flow positive and FCF neutral/slightly positive .
  • SG&A trajectory: Sequential SG&A down; legacy legal items (~$2M) remain a swing factor; further reductions expected as legacy matters resolve and stock comp trends down .

Estimates Context

  • Revenue: Actual $35.154M vs consensus $33.229M* — a positive variance tied to HA demand and contractual/pricing mix .
  • EPS: Company reported GAAP diluted EPS of -$0.47 vs consensus Primary EPS -$0.15*; note metric definition differences (Primary vs GAAP diluted) complicate direct comparison .
  • EBITDA: Adjusted EBITDA $5.704M vs consensus EBITDA $4.636M*; company’s measure is Adjusted EBITDA (non-GAAP), which may not match consensus EBITDA definitions .

Values retrieved from S&P Global.*

Where estimates may adjust: Legal/legacy costs and loss on disposal lift FY GAAP net loss; continued efficiency gains and pipeline progression support medium-term EBITDA margin aspirations; consensus may raise revenue/EBITDA near term while maintaining caution on GAAP loss given elevated interest/legal .

Key Takeaways for Investors

  • Revenue in Q3 beat consensus while staying aligned with full-year guidance; sequential growth supports second-half weighted delivery plan .
  • EPS optics remain pressured on GAAP due to interest, legal, and derivative non-cash items; focus should be on Adjusted EBITDA trajectory and mix improvement .
  • Guidance: Top line and Adjusted EBITDA maintained; GAAP net loss widened reflecting specific, largely non-operational items—monitor resolution of legacy legal matters and asset disposal effects .
  • Liquidity improved via monetization of unused filler and revolver paydown; management guides to second-half operating cash positive and FCF neutral/slightly positive, a potential stock catalyst .
  • Commercialization pipeline progressing (PPQ commitment, SOWs signed); watch for late-stage/conversion to commercial site transfers and incremental capacity utilization .
  • Efficiency initiatives (live production monitoring, scheduling, training, reduced consultants, pricing updates) should gradually lift margins despite near-term noise .
  • Strategic narrative: growing engagement with multinationals and heightened interest in domestic manufacturing provide medium-term demand tailwinds for injectables CDMO .

Sources

  • Q3 FY2025 8-K 2.02 and Exhibits (press release, investor presentation, GAAP/Non-GAAP tables): .
  • Q3 FY2025 Earnings Call Transcript: .
  • Prior quarters for trend analysis: Q2 FY2025 transcript , Q1 FY2025 transcript .

Values retrieved from S&P Global where marked with an asterisk.*