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 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 2026 in-review document to the main page of their 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. Good afternoon, everyone. 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. I am pleased to report that Cryoport delivered another strong quarter with revenue of $50.2 million, representing a 14% year-over-year growth. Life Sciences Services continued to be a key growth driver, with revenue increasing 18% and representing 57% of our total company revenue. Within services, our core cell and gene therapy business delivered very strong results, with revenue from commercial cell and gene therapy clients increasing 20%. These results reflect the growing number of patients worldwide receiving cell and gene therapy treatments and the continued adoption of our integrated supply chain solutions.
During the third quarter, Cryoport continued to expand its leadership position within the cell and gene therapy ecosystem, ending the quarter supporting 23 commercial therapies, as our client, Replimune, received accelerated FDA approval for TUDRIQEV for the treatment of adults with unresectable advanced cutaneous melanoma, a skin cancer that has spread too widely or deeply to be safely or completely removed with surgery. We also concluded the quarter with a record clinical trial pipeline of 788 clinical trials, a net increase of 43 clinical trials over the prior year, with 99 of these trials being in phase III. 99 of these trials in phase III. We believe our industry-leading position will continue to drive commercial revenue as these therapies receive additional regulatory approval.
Based on the information we have today, for the remainder of the year, we expect another five possible BLA/MAA application filings, two potential new therapy approvals, and one additional supplemental approval for geographic expansion. It is important to note that both of these potential new therapy approvals have received PDUFA dates from the FDA and are scheduled for the fourth quarter of this year. We also posted solid life science products revenue, with growth of 8% for the quarter, reflecting MVE Biological Solutions' position as the global leader in cryogenic systems. Specific revenue contributors in the third quarter included strong demand for animal health customers, as well as increasing demand for our Fusion line of cryogenic freezers. MVE continues to be the industry leader and a consistent cash flow generator, while also providing support and meaningful synergies with our Life Sciences Services business.
Our integrated end-to-end platform across the life sciences ecosystem, combined with disciplined execution and increasing utilization of our global supply chain center network, positions us to scale with the industry efficiently and exercise operating leverage as we continue to advance towards sustained profitability. This was also shown in our financial results, as we report in our second consecutive quarter of positive Adjusted EBITDA of $1.1 million for the quarter. A $1.8 million improvement year over year. With our progress to date on our pathway to profitability initiative, we believe our financial results will continue to improve. During the third quarter, our global supply chain center in Paris, France, received ISO 9001 and ISO 21973 certifications. As a result, Cryoport Systems received the Healthcare and Pharmaceutical Supply Chain Excellence Award at the 2026 Supply Chain Excellence Awards USA.
This was largely in recognition of becoming the first global supply chain solutions provider to achieve ISO 21973 certification, which is the first international standard developed specifically to address the transportation risk associated with human cells for therapeutic use. We are extremely proud to achieve these certifications and industry recognition. Taking these initiatives and achievements into account, along with our strong year-to-date performance, combined with our increased visibility, expanding support of commercial therapies, deepening customer relationships, a robust clinical trial pipeline, and healthy demand for MVE's industry-leading products, we are well-positioned to meet our 2026 financial goals. Therefore, we are raising our full year 2026 revenue outlook to $197 million-$199 million. This concludes my remarks for today. Now I will ask the operator to open the floor for your questions.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star key followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star key followed by the number two. One moment, please, while we assemble the queue. Your first question comes from Puneet Souda at Leerink Partners. Please go ahead.
Hi, this is Philip on for Puneet. Thanks for the question, and congrats on the quarter. I wanted to ask about guidance. By our math, you raised the midpoint by $4 million on a $1.6 million beat, implying 4Q of $50 million-$52 million. Question is, what drives the 4Q step-up in services versus products, and how much macro caution is still embedded in the range?
I think overall, what we did when we looked at guidance for the full year is really to give a prudent guidance for the full year. We had very, very strong results really over the last three quarters in terms of revenue growth and also expansion of our bottom line. Looking into Q4 and looking at the growth prospects, we think this was the right level of guidance to provide for the year. It looks at a 12% growth year-over-year, and there is certainly upside potential for that as well.
Got it. That makes sense. Follow-up question on pipeline expectations. I think in August, I believe you expected 11 more filings and five approvals this year. Correct me if I am wrong, but now it is two filed, five more possible, and two approvals. The question is, what moved exactly? Is it FDA timing or sponsor decisions? Separately, is it safe to assume that the two decisions expected in 4Q are the two multiple myeloma drugs? I think both have PDUFA dates in December. Thank you.
Yeah, thanks for the question. You are correct. We did in Q2 predict 11 applications, five approvals. In Q3, we had two filings and one approval, and now we are having an outlook for five more with three approvals. Four applications we thought we would have happen in 2026 did get pushed into 2027. That happens. As far as the approvals that have, or the upcoming PDUFA dates, yes, one is Arcellx and one is Capricor. One in November, one in December.
Got it. Thank you so much. I will hop back in the queue.
Your next question comes from Mac Etoch from Stephens. Please go ahead.
Hey. Sorry, I think I would be able to find the mute button by now. I would love to get a sense of what you are seeing within your or just an update on the China for China strategy now and how that is progressing.
Would you restate that, Mac, again? I missed part of that.
Yeah. Sorry about that. I would just love to get an update on the China for China strategy now that you have the production facilities up and running in that area. Just love to get a sense for how demand is trending.
Well, you are talking about the global supply chain center network, and we-
MVE.
MVE China.
Oh, oh, oh. Yeah, okay. Okay. Your question is about MVE. MVE is robust, it is stable, its market seems to have stabilized, its strength, as I mentioned in my comments about the animal health market. All three plants are running very well, and the market is cooperating. We see solid mid-single-digit growth on a continued basis for MVE.
Yeah, then just for China specifically, China revenue for us is somewhere in the range, typically of 3%-4% overall of total revenue. We do not see significant growth in China, but it certainly has stabilized. Yeah, from an MVE perspective.
You have to remember, on the China operation, that supplies components for our other operations, both in Ball Ground, Georgia, and New Prague. It does produce product that is sold in the market domestically. It produces export products. I was recently there and saw a number of orders going to Pakistan and other places, particularly for animal health. It is an internal supplier as well as an external supplier. But it is doing well.
Got it. I appreciate the color there. Then maybe touching on those additional facilities that are coming online. How should we think about the margin cadence as we look towards 4Q and into 2027?
Yeah, I think, look, if you step back over the last several years, we've made significant investments to expand, one, our first mover leadership position, increase our wallet share through the new standard setting services. At the same time, we've expanded our global supply chain centers, and this will substantially be complete in 2027 with the added BioServices capabilities in Paris, France, and Santa Ana, California. This provides both with the capabilities and capacity to support the expected growth in cell and gene therapies. That really drives the operating leverage that we expect to see. You've seen some of that kick in Q2 and Q3 with driving positive Adjusted EBITDA and then growing it in Q3. But we certainly expect more room for operating leverage going forward as we come online with these additional services.
Overall, we look at cell and gene therapy market, and that's really why we've built out the global supply chain centers over the last couple of years. If you look at the Alliance for Regenerative Medicine recent report, they expect cell and gene therapies to grow at a six-year 34% CAGR from $10.2 billion in 2025 to roughly $60 billion in 2031. So, we're well-positioned to capture that additional revenue going forward.
I appreciate the color.
Your next question comes from Matt Hewitt of Craig-Hallum Capital Group. Please go ahead.
Good afternoon. Congratulations on the strong quarter. Maybe first up, regarding the increased guidance, and you touched on this a little bit, I think, earlier in the first question, but how much of that is a factor of the broad-based strength that you're seeing in the market versus the new approval? Is there a way to parse out what you're expecting for that one new approval that you saw in the quarter?
No, Matt, I think they go hand in hand. There is a broad base that we're looking at, both in products and in services. You saw clinical increases in the quarter in our review piece, and you also have seen that we grew commercial therapy, I mean, commercial shipments by about 20%, or the commercial activity in the services by 20%. So, it's broad-based. It's based on all of those things.
Looking at Q4 in particular, we don't expect new approvals to That's really not baked into the guidance that we've given, because new approvals typically take a while to ramp depending on the type of therapy, depending on the company that's actually launching the therapy. So, in our guidance, that's really not reflected as a revenue stream. This is really based on the clients we're currently serving, on the growth that we've experienced over the last three quarters. We look at year-to-date growth for the three quarters, it's about 12%. The midpoint of our guidance is 12%, so we continue or we expect that growth to continue into Q4.
Got it. Regarding the new facilities in California and France, as those get up and running, just a reminder here, does that weigh on the gross margins a little bit initially, and then as you start to get better utilization there, you start to see those margins climb back up? Or is there really no impact on gross margins once you kind of open the doors, if you will?
No, that's a good question. Selectively, if you just look at those facilities, yes, there will be some margin impact. But overall, because we're seeing growth throughout our organization, that will be covered by the overall growth in margins from the other facilities. Maybe just a clarification, both of those sites are already online with our BioLogistics services solution. What we're adding to both sites is the additional BioServices capabilities to really add or to provide the full comprehensive platform that we've built.
Got it. Thank you.
Your next question comes from Richard Baldry of Roth Capital. Please go ahead.
Thanks. Looks like MVE had its best quarter in about three years. I am curious if you could piece its revenues internally apart. Is most of that growth being driven by the new Fusion offering? How sustainable, extensible do you think the run rate revenues feel like? Thanks.
The animal health business is cyclical, so we have had a strong couple of quarters. That is mostly animal husbandry, is mostly in the bovine area of reproduction, and that has been global. There is a demand for some kind of a surge demand for protein, but we have experienced that, and we have been strong on that side. Freezer side has been fine, and it has not been as robust as the dewar side of the business, that is the shipping side of the business. But the freezer business is very healthy. Of course, the Fusion line started to ship and had some increased demand, so that has helped as well.
Regionally or geographically, we have seen actually for a quarter, Q3 or Q3 last year, growth in all three regions, so the Americas, Asia-Pac, and EMEA.
When you look at the move to Adjusted EBITDA positive, some of that has been with OpEx controlled to steady. Do you think you are at a good run rate here? Do you think you are still looking for places to get greater efficiencies, or does it grow in line or maybe add a little subset to the top line from here forward?
Well, look, Rich, Robert will further comment on this, but the operating leverage naturally gives us leverage. I mean, it gives us operating leverage, and we built out these capacities for what's coming, for being able to handle this demand as it does materialize. And of course, they have to be fully validated, so it was a drag for a while, but now, we're beginning to We're beginning. We're not totally there. We're beginning to get on the other side of that, and that's where our pathway to profitability theme is centered. We certainly are cost-conscious, but we also know that we have to deliver quality to this market and meet the expectations. But Robert, do you have other
Yeah, no, it's really, like I mentioned, it was building out the capabilities and capacity that we believed we needed to have on a global basis to support the upcoming commercialization of more cell and gene therapies. And we did state that our overall goal in terms of long-term goal gross margins is 55%, long-term goal for Adjusted EBITDA is 30%, and we definitely see that pathway to those targets. I think as you have more volume go through these centers, global supply chain centers, you'll certainly see also greater ability for efficiencies that we believe that we'll have within our network. So certainly, we'd expect further EBITDA margin expansion in 2027 and beyond.
Just last, and it's sort of been addressed, but maybe look at it a little more in detail, but if you look sequentially on the $50 million-$52 million implied revenue, it's sort of flat up. What really gates whether it's in a quarter or not?
He's talking about
Say that again, Rich. What gates whether it is in a quarter or not? Is that what you said?
The revenue guide implies flat to up about $2 million sequentially. So I am sort of curious what factors. The services would tend to be, I think, sort of sequentially higher. Is it really product-driven that is going to be the up or down on it?
No, it is services-driven. But Rich, in our guidance, we have momentum, but we chose to be prudent and conservative on that side. Look, there is still a lot of external things, especially with our government and so forth, that could happen, and we have to take those into consideration. As Robert stated earlier, we pushed out the 12% and increased our guidance by the midpoint to that extent. But we certainly have a lot of momentum, and we certainly have a bullish outlook on what is coming. But in terms of guidance, we did maintain a conservative stance.
Thanks.
Your next question comes from Subbu Nambi of Guggenheim Securities. Please go ahead.
Hi, this is Ethan on for Subbu. Thanks for taking our question. Just wondered beyond animal health, how did reproductive medicine or other MVE markets trend in 3Q, and I was just wondering what your outlook for those markets is going into 2027.
Yeah, we've seen growth, but really, if you step back and look at our company, the main focus is on cell and gene therapies. That's really where we expect to see the growth. The commercial cell and gene therapy revenue alone now represents 20% of total revenue, and if you add the clinical trial cell and gene revenue, it's about 47%. So yes, we have seen definitely good, especially in the animal health side. We've seen on the product side significant demand, and that's related really to the need for protein production globally. So we've seen that over the last three quarters, and reproductive medicine is growing as well.
Thank you.
Your next question comes from Anna Snopkowski of KeyBanc Capital Markets. Please go ahead.
Hi. Thanks for taking my questions. My first one is on the BioStorage and BioServices business, which I know is a smaller part of the company, but this has been seeing strong growth with, I think, over 20% growth over the last seven quarters. Do you think you could just touch on what is driving this, and how should we think about this business over the long term?
You are absolutely right. We did have very strong Q3, and really over the last several quarters, saw in excess of 20% growth year-over-year, and we expect that to continue. We are very bullish about BioStorage, BioServices. As I mentioned, we are just expanding that service in Paris, France, and in Santa Ana, because we see a growing need. Clients are really looking for us to provide a comprehensive solution. Not just BioLogistics or BioServices, but really a combined solution of both. We do expect that to continue to be a double-digit grower. This really is comprised of short-term BioStorage, kitting, labeling, and of course, allogeneic therapy fulfillment moving forward.
Yeah, let me just add a little bit to that. Robert is exactly correct, and we are seeing continued diversification of our client base into our BioServices and BioStorage business. We also launched our sterile kitting operations in Q1 of this year, and we have seen extremely positive traction as it relates to uptake of that business in Belgium. That will be coming online out of the Houston site next year as well.
Great. Thank you. Just one follow-up on IntegriCell. I know this is part of a longer, larger initiative, but how is this rolling out so far, and how do you think about potentially rolling into new regions, and how do you exactly pick which regions you expand into?
Yeah, IntegriCell is still, as we had mentioned, in its early stages. However, we do have multiple clients that are onboarded that are now contributing consistent patient counts into both locations, the location in Houston as well as the location in Belgium. Ultimately, our goal here is to, over time, provide a competency that provides a network of cryopreservation competencies in both geographies. In fact, we're going to be bringing online the IntegriCell cryopreservation activities in our Morris Plains location as well next year in support of multiple of our clients who have asked us to have diversification of sites, and we'll continue to see benefit from that. This is obviously a key opportunity for us, as well as the broader cell and gene market.
I think you've heard us say this before, standardization of cryopreservation competencies is something that is extremely important, and it will become more important as these therapies continue to expand. But it also provides the competency for companies that we're working with to expand into the community care setting that don't have the infrastructure to support any sort of processing activity on site. And so they can now engage IntegriCell to support their community care expansion initiatives and still have the, obviously, the regulated processing competency for those sites.
Thank you.
Your next question comes from David Larsen of BTIG. Please go ahead.
David?
I'm sorry. Hi. Can you please talk about expected commercial launches in 2027 and 2028 and the incremental revenue lift, please? Thank you very much.
Sure, David. Thanks for the question. Or do you want to take it, Mark?
No, you can go ahead, Tom. That's fine.
Okay.
I might add to it.
Sure. We've got two more that we think will commercialize this year, and then, of course, we said we have more filings, five more that we expect. I think the street's really looking at two main ones. One is the Arcellx product that now is owned by Gilead. Gilead's talked about it a lot on their last quarterly call. Then there's a therapy that could be approved early in 2027 that could be the first approved for an autoimmune disease, so that would be a milestone event for the industry. Overall, we're very bullish on the outlook for commercial therapies. We're bullish for the number of commercial patients being treated across the country and across the globe.
I think one example of that is the progression of the phase III programs that we're supporting. I think you've seen over the last few quarters a significant increase in the number of active phase III programs, which shows that a significant increasing percentage of our pipeline is moving towards those types of regulatory filing events, which we view as extremely positive for the long-term prognosis for the cell and gene space.
That's very helpful. Thanks very much. Really appreciate it. Congrats on a great quarter.
Thank you, David.
Your next question comes from Matt Stanton of Jefferies. Please go ahead.
Hey, thanks. Maybe to pick up to some of what Mark was just talking about there on the phase III adds. I think you had five all of last year. I think you have 13 this year, so really nice progress there. Is any of that tied to better funding we've seen out there, or is it just timing as the earlier stage stuff moves through the pipeline? Any more color on that? Then just talk about more broadly, to go to the prior question, just between the existing 23 and some of the new ones coming in, and the phase III at almost 100 now, just durability for commercial to grow kind of 20%+ into 2027. Thanks.
Yeah, I think the acceleration that you're seeing is a combination of factors. As Tom had put, and we published this in the review, there is an increase in funding in the space, so you do see a rebound in support of cell and gene from the financial market standpoint, which is extremely positive. You also see continued consolidation activity where you have larger entities. A good example of this is the Arcellx acquisition by Gilead, where they now have obviously significantly deeper pockets as well as a more mature commercial infrastructure to be able to rapid launch and scale these things very, very quickly.
Then you also have continued prioritization of the smaller biotech space where they focused, and part of the challenge you saw a few years ago was the consolidation of some of these programs, and the clinical trial adds had slowed down, but it's now re-accelerating. But you're also seeing a more focused approach to those therapies that have a definitive commercial outcome. So they're pushing most of the resources into getting their first or second commercial therapy across the line. So I think it's a combination of all of those. I'm not sure if Tom wants to add anything to that.
I'd just add some color on the pipeline. In Q3, we had 31 adds come in and 22 removed. Of the 22 removed, you had eight trials completed. We're still seeing that trend of the number of completions being a good thing. That's maturation.
Yep. All right, appreciate the color there from both of you. Thanks. One other one. I saw CRYOGENE launched a new offering, or I guess division, Cryogenic Technical Services, CTS. Could you talk about the logic behind this, and is this something that you will be able to monetize as a service moving forward within CRYOGENE? Thank you.
No, I think for CRYOGENE, it's really a natural response to the client demand. CRYOGENE obviously has a very, very strong long-term foothold in Texas, especially in Houston, and with all the medical centers, including MD Anderson. It's expanding the service offering based on client demand. That will contribute over time in additional revenue growth for CRYOGENE. They have sites in Houston and in San Antonio, and obviously, we've talked in the past about the additional sites that they're setting up for the Moffitt Cancer Center in Tampa, which will be up and running later in 2027.
Super. Thank you. Thanks, Mark.
There are no further questions at this time. I will now turn the call back over to Mr. Shelton for closing remarks.
I think you can see, ladies and gentlemen, from the conversation and from the questions and answers, we have a lot of positive things going on. We have fantastic momentum. We have raised our guidance. We had a terrific quarter. Most importantly, we have a really, really bright future. In closing, our strong third quarter and year-to-date results demonstrated the continued ramp of global patients being treated with cell and gene therapies, as well as strong customer adoption of our integrated supply chain solutions. With the 23 commercial therapies we currently support and our record clinical trial pipeline, we are on a solid growth trajectory as we continue to expand our position across the cell and gene therapy ecosystem. We remain focused on our pathway to profitability initiative and are making significant progress, as we highlighted by our $1.8 million year-over-year improvement in adjusted EBITDA for the quarter.
We are extremely proud of what we have achieved so far, but more importantly, we are excited about what we intend to achieve going forward as Cryoport continues to be an essential partner in supporting the life sciences industry, and especially the cell and gene therapy part of that industry. I want to thank you, all of our team members, and other stakeholders whose hard work and dedication have helped us make today's results possible. We thank you for joining us today. We appreciate your continued interest and support, and we look forward to sharing our continued progress with you when we report our full-year financial results. We wish everyone a good evening.
Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.