EPS of $-0.01 increased by 95.8% from previous year
Gross margin of 48.2%
Net income of -109.00K
"This past year was a challenging one. With disappointing financial results compared to historical performance, but also one that has us ending the year stronger, leaner and positioned for a return to revenue growth and profitability." - Ronnie Morris
Champions Oncology Inc (CSBR) Q4 2024 Results Analysis: Early Signs of Recovery in Oncology Biotech Services
Executive Summary
Champions Oncology reported a modest top-line rebound in Q4 2024, with revenue of $14.0 million, marking a 7% YoY increase and a 16.5% QoQ rise vs Q3 2024. The quarter delivered the first positive EBITDA in the period (adjusted EBITDA ≈ $0.9 million) and showed a meaningful gross-margin expansion to 49% for pharmacology services, contributing to a better gross margin profile that suggests improved operating leverage as the company right-sizes its operations after a difficult prior year. Management framed 2024 as a challenging year driven by external biotech funding weakness and internal execution headwinds, but signaled a gradual improving thesis as R&D budgets loosen and big-pharma engagements deepen. The company guided to a generally cash-neutral stance in fiscal 2025 with limited CapEx, reiterating a pathway toward profitability and revenue growth into the first half of 2025, aided by advancements in ex-vivo and core platforms and a renewed emphasis on tier-one pharma customers.
Key Performance Indicators
Revenue
14.00M
QoQ: 16.49% | YoY:7.11%
Gross Profit
6.75M
48.22% margin
QoQ: 61.89% | YoY:17.74%
Operating Income
164.00K
QoQ: 106.36% | YoY:109.57%
Net Income
-109.00K
QoQ: 95.69% | YoY:95.74%
EPS
-0.01
QoQ: 95.79% | YoY:95.79%
Revenue Trend
Margin Analysis
Key Insights
Q4 2024 revenue: $14.001 million, up 7.11% YoY and 16.49% QoQ vs Q3 2024. Gross profit: $6.751 million; gross margin: 48.22% (Q4). Pharmacology gross margin in Q4: 49.0% versus 47.0% in Q4 2023. Operating income: $0.164 million; operating margin: 1.17%. Net income: -$0.109 million; net margin: -0.78%. EPS: -$0.008 per share (diluted).
FY2024 context: Revenue around $15 million (management commentary), GAAP operating loss of $7.4 million, with roughly $3.5 million of non-cash charges. Adjusted loss for the year: ~$3.9 million vs. $1.3 million in 2023.
Cash and liquidity: Year-end cash of $2.618 million; no debt; net debt ≈ $4.812 million; cash used in operating activities in Q4: -$1.816 million; free cash flow: -$1.705 million; total current liabilities materially exceed total current assets (current ratio ~0.63).
Balance sheet signals: Deferred revenue: $12.094 million; total assets: $26.132 million; total liabilities: $28.035 million; negative stockholders’ equity (~$-1.903 million).
Leverage and efficiency: Debt total of $7.43 million; cash conversion cycle is modestly negative (−10.77 days); DSO ≈ 61 days; gross margin expansion and relatively stable SG&A indicate potential for improved operating leverage as revenue scales.
Financial Highlights
Revenue and Profitability
- Q4 2024 revenue: $14.001 million, up 7.11% YoY and 16.49% QoQ vs Q3 2024. Gross profit: $6.751 million; gross margin: 48.22% (Q4). Pharmacology gross margin in Q4: 49.0% versus 47.0% in Q4 2023. Operating income: $0.164 million; operating margin: 1.17%. Net income: -$0.109 million; net margin: -0.78%. EPS: -$0.008 per share (diluted).
- FY2024 context: Revenue around $15 million (management commentary), GAAP operating loss of $7.4 million, with roughly $3.5 million of non-cash charges. Adjusted loss for the year: ~$3.9 million vs. $1.3 million in 2023.
- Cash and liquidity: Year-end cash of $2.618 million; no debt; net debt ≈ $4.812 million; cash used in operating activities in Q4: -$1.816 million; free cash flow: -$1.705 million; total current liabilities materially exceed total current assets (current ratio ~0.63).
- Balance sheet signals: Deferred revenue: $12.094 million; total assets: $26.132 million; total liabilities: $28.035 million; negative stockholders’ equity (~$-1.903 million).
- Leverage and efficiency: Debt total of $7.43 million; cash conversion cycle is modestly negative (−10.77 days); DSO ≈ 61 days; gross margin expansion and relatively stable SG&A indicate potential for improved operating leverage as revenue scales.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
14.00M
7.11%
16.49%
Gross Profit
6.75M
17.74%
61.89%
Operating Income
164.00K
109.57%
106.36%
Net Income
-109.00K
95.74%
95.69%
EPS
-0.01
95.79%
95.79%
Key Financial Ratios
currentRatio
0.63
grossProfitMargin
48.2%
operatingProfitMargin
1.17%
netProfitMargin
-0.78%
returnOnAssets
-0.42%
returnOnEquity
5.73%
debtEquityRatio
-3.9
operatingCashFlowPerShare
$-0.13
freeCashFlowPerShare
$-0.13
priceToBookRatio
-34.65
priceEarningsRatio
-151.22
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management insights and quotes that illuminate strategy and execution themes:
- Strategy and market conditions: “The past year was a challenging one… but also one that has us ending the year stronger, leaner and positioned for a return to revenue growth and profitability.” This underscores the pivot toward profitability and disciplined cost management after a difficult year driven by biotech funding weakness and higher cancellation rates.
- Market dynamics and opportunity generation: “As we end the year and pivot towards our new fiscal year, we have detected a gradual loosening of R&D budgets leading to an uptick in opportunity generation.” This indicates a nascent improvement in demand and deal flow, a key driver for recovery in 2025.
- Operational improvements and margins: “The evidence of this is in the improved revenue number and adjusted EBITDA profitability achieved in Q4 and which is the result of some of our operational improvements.” Highlights the operational levers (process, scaling, and systems) that the company believes are in place to support margin expansion going forward.
- Platform strategy and licensing: “Ex-Vivo has contributed meaningfully to our top line growth… revenue contribution in excess of 10%,” and ongoing discussions to out-license programs for Corellia. These points emphasize diversification through ex-vivo growth and non-dilutive near-term licensing options.
- Customer mix and growth trajectory: “We have focused on expanding and deepening relationships with our big pharma customers… deeper into our top tier customers and larger opportunities.” This aligns with the management emphasis on a higher-quality, higher-quality-margin book of business.
- Outlook and cadence: “We anticipate that improvements will slowly take hold… heading into our new fiscal year” and “profitability and revenue growth in the first half of 2025 vs the first half of 2023.” Signals a cautious, cadence-driven recovery rather than an abrupt rebound.
This past year was a challenging one. With disappointing financial results compared to historical performance, but also one that has us ending the year stronger, leaner and positioned for a return to revenue growth and profitability.
— Ronnie Morris
As we end the year and pivot towards our new fiscal year, we have detected a gradual loosening of R&D budgets leading to an uptick in opportunity generation.
— Ronnie Morris
Forward Guidance
Management guidance and qualitative outlook as discussed in the earnings call and supporting materials:
- Fiscal 2025: G&A expected to be largely flat as a percent of revenue; capital expenditure anticipated to be minimal given prior automation investments in ex-vivo platforms and lab functions. This suggests a leaner cost structure with potential for margin improvement as revenue scales.
- Cash and liquidity: The company targets a generally cash-neutral position over the next several quarters, with an improving bottom line expected to support a rebound in cash position over the longer term.
- Profitability trajectory: The company frames Q4 as a proof point that cost controls and operational improvements are taking hold, with a stated expectation of profitability and revenue growth in the near term relative to the first half of 2023. This implies a >0 EBITDA trajectory in the near term, contingent on macro biotech funding trends and continued execution of the operational enhancements.
- Growth drivers to monitor: (1) Ex-vivo platform contribution and gross margin uplift, (2) Big-pharma bookings and conversion rates, (3) Progress on Corellia out-licensing and any capital raises to support growth, and (4) The pace of bookings and cancellations in biotech spend; particularly the rate of cancellations and the duration of the “backlog” represented by deferred revenue.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CSBR Focus
48.22%
1.17%
5.73%
-151.22%
ANEB
0.00%
0.00%
-35.40%
-12.82%
CLYM
0.00%
0.00%
-3.97%
-3.46%
CPIX
70.90%
-22.30%
-21.30%
-1.01%
FENC
93.00%
-18.70%
23.80%
-27.31%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Outlook remains cautiously optimistic, grounded in near-term improvements in Q4 2024 metrics and a defined path to profitability. The ex-vivo and biomarker platforms offer meaningful upside alongside strategic licensing options for Corellia. However, the investment thesis hinges on continued stabilization of biotech funding, sustained execution of operational improvements, and a meaningful rebound in large-pharma bookings. The company’s cash-neutral trajectory in the near term and absence of debt are favorable, but the balance sheet remains challenged by negative equity and a large deferred revenue base. Investors should monitor: (1) quarterly cadence of revenue growth and gross margin expansion, (2) trajectory of bookings cancellations vs new opportunities, (3) progress on licensing initiatives for Corellia, and (4) changes in deferred revenue and overall liquidity. If macro conditions stabilize and the top-tier pharma pipeline accelerates, CSBR could return to higher growth rates with improving profitability; otherwise, the downside risk remains linked to continued headline risk in the biotech funding environment and execution risks tied to scaling the ex-vivo platform and managing complex studies.
Key Investment Factors
Growth Potential
Catalysts include a continued shift toward top-tier pharma engagements (≈40% of revenue) and deeper penetration within Tier A customers, ongoing expansion of the ex-vivo platform (historically contributing >10% of revenue), and potential licensing/licensing-out of Corellia programs. The Q4 2024 margin expansion (pharmacology services gross margin ~49%) plus a path to cash-neutrality in 2025 support a higher-returns trajectory if the biotech funding environment improves and bookings convert at higher rates.
Profitability Risk
Key risks include ongoing biotech funding volatility and higher cancellations, which could dampen revenue progression; negative equity and a fragile balance sheet with a high deferred revenue balance pose liquidity and capital-structure challenges; reliance on large pharma relationships, which, if disrupted, could impact revenue visibility; competitive pressures in a fragmented CRO/biotech services landscape and potential delays in licensing transactions for Corellia.
Financial Position
Financially, CSBR carries a modest cash balance ($2.618M) with no debt, but a total liability base of $28.0M and negative equity (~$-1.9M) driven by deferred revenue and operating losses historically. Cash burn in Q4 was modest but ongoing; net debt ~$4.8M. The company has strategically lower CapEx going forward and expects to maintain a cash-neutral stance in the near term, with improving profitability depending on revenue growth and operating leverage.
SWOT Analysis
Strengths
Industry-leading PDX (Patient-Derived Xenograft) platform and strong in-vivo business
Ex-vivo platform contributing meaningfully to growth (historically >10% of revenue) with potential for greater contribution