CryoPort, Inc.

we will conduct a question and answer session. If at any time during this call, you require immediate assistance, please press star zero for an operator. 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 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 10K to be filed with the Securities and Games Commission and those described from time to time in the other reports which we filed with the Securities and Exchange Commission. As a reminder, Cryoport has uploaded their second quarter 2025 in review document to the main page of the Cryoport website. These documents provide 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, CryoPDP's financials, which were previously a part of Cryoport's life sciences services reportable segment are now presented as discontinued operations. Cryoport previously provides quarterly historical information on this basis for fiscal year 2024 in our first quarter 2025 review document which remains available on the Cryoport website. This information is intended to support the financial modeling efforts of those needing this information. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations. This includes Cryoport's fiscal year 2025 revenue guidance. It is now my pleasure to turn the call over to Mr. Gerald Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd. Good afternoon, everyone. With us this afternoon is our Chief Financial Officer, Robert Stavanovic, our Chief Scientific Officer, Dr. Mark Sawicki, and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. Today, Cryoport reported strong double-digit revenue growth across all revenue streams in our life sciences services for the second quarter. Service revenue increased 21% year over year, accounting for 54% of total revenue from continuing operations. Notably, revenue from our support of commercial cell and gene therapies increased by 33%, and bio storage, bio services grew 28%, underscoring the growing demand for our integrated temperature control supply chain platform. This growth continues to be fueled by the increasing adoption and scaling of cell and gene therapies, a positive trend we believe will continue for years to come. Turning to our life sciences products, we posted a solid performance with 8% year over year revenue growth driven by improved demand, particularly from animal health customers during the quarter. We also continued to expand our product portfolio with the launch of our next generation MVE SC42V and SC43V vapor shippers, which offer medical and animal health professionals improved safety and reliability for transporting and preserving sensitive biological materials at cryogenic temperatures. During the second quarter, we also recorded revenue in accordance with plan from sales of MVEs high efficiency 800C cryogenic storage system, which was released earlier this year. This compact form factor freezer was designed for facilities with limited space that require high capacity and security. These innovations demonstrate our continued commitment to addressing the evolving needs of our clients globally and expanding our future revenue potential. For the second quarter, we had an overall 14% increase in total revenue from operations, and we delivered an increase in gross margin along with a meaningful lift in our adjusted EBITDA as a result of our pathway to profitability initiative. Given the strong execution across all our business units, we are reaffirming our full year 2025 revenue guidance as we move toward our goal of sustainable long-term profitability, which will accelerate as our capital projects mature. I'm pleased with all the progress of all of our business units, but I would be remiss if I didn't highlight one of the most significant achievements for the second quarter, which was our launch of our strategic partnership agreement with the DHL Group and DHL's acquisition of CryoPDP in a transaction that included cash payments of approximately $200 million to cryoport. Aside from a strong infusion of capital, this strategic partnership provides for enhancing our global biologics capabilities, biologistics capabilities and effectiveness by leveraging DHL's competencies, scale and reach in Asia-Pac and EMEA, we will be increasingly well positioned to expand our life sciences business and deepen our leadership in the rapidly growing global regenerative medicine market. This strategic partnership is an initial step as we continue to work to develop a strong global partner network that complements our core capabilities through discussions with various global companies. Before we take your questions, I want to briefly address a unique situation with one of our clients that has received some immediate attention. One of our gene therapy clients temporarily paused the distribution of their commercial therapy for about a week in July. The therapy is now back on the market and shipping to patients. However, that company anticipates treating fewer patients than originally forecast in 2025. We do not expect this to have a material impact on our business. Our guidance that we reaffirm today considers an estimated revenue impact of approximately $2 million from this client for the remainder of the year. As of June 30th, CrowdFort supported a record 728 clinical trials, which is approximately 70% of the industry cell and gene therapy trials. For the remainder of 2025, we anticipate up to an additional 20 application filings, one new therapy approval, and an additional three approvals for label or geographic expansion. Also, we want to note that during the quarter, five of our clients that had filed for approval earlier this year or late last year received negative opinions from the FDA or MAA. All these clients have requested meetings with the regulators to find a pathway forward to bring their therapies to market. Given the need for these therapies, along with the recent changes within the FDA, many analysts are thinking more positively about their chances of gaining approval later this year or early in 2026. The strength and resilience of CrowdFort's performance in the second quarter, despite these challenges, faced by a few of our clients, by largely in the broad number of clinical trials we support and the scaling of the current commercial therapies we are supporting on a global basis. Our commercial revenue is expected to drive our growth for years as it is boosted by additional CrowdFort supported therapies as they reach commercialization, including the new cell therapy from our customer, Aviano, Aviana Therapeutics, that was approved by the FDA during the second quarter. I probably mispronounced that, I think it's Aviano not. In summary, our second quarter was marked by strong revenue growth, improved margins, and the beginning of the execution of a transformative strategic partnership agreement. We are entering the second half of the year with strong momentum and a clear focus on driving long-term shareholder value as we support the growth of the global regenerative medicine markets and the life sciences in general. As the regenerative medicine industry accelerates, the complexity and precision required to safely deliver personalized, often life-saving therapies has never been greater. Our global platform of temperature control supply chain solutions coupled with real-time informatics and regulatory compliant processes enable 728 active clinical trials and 18 commercial therapies worldwide. Whether supporting first in human studies or globally scaled commercial treatments, CrowdFort ensures -to-end integrity from the manufacturer, from the laboratory to the manufacturer to the points of care to the patient's bedside, our advanced packaging systems, bio storage and bio services capabilities, biologistics and cryogenic infrastructure have become mission critical to the industry's leading biopharma companies, CDMOs and researchers alike. In short, we form the connective tissue between researchers, manufacturers, and the patients enabling the secure preservation and movement of living regenerative therapies with real-time data and systems and a global reach. We do more than support the life sciences ecosystem. We make it responsive, resilient, and ready for the future of medicine. This concludes my prepared remarks. So now I'll ask the operator to open the lines for your questions.