ImmunoPrecise Antibodies Ltd.

Good morning, ladies and gentlemen, and thank you for joining us today for Immunoprecise Antibodies fourth quarter and fifth school year and 2025 earnings call. We appreciate your time and interest in IPA. Today's call will be led by our CEO, Dr. Jennifer Bass, and interim CFO, Joe Scheffler. They will provide a review of our financial performance, strategic initiatives, and key operational highlights for the fourth quarter. Please note that a copy of today's presentation, along with our financial statements, will be available on our company website for your reference. We encourage you to review these materials to gain a deeper understanding of our performance and strategic direction. Once again, thank you as for joining. Before we proceed, I would like to remind everyone that today's discussion will contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those anticipated due to various factors, including but not limited to global political and economic factors, changes in market conditions, and other unforeseen business risks. Please note that these forward-looking statements are made as of today, and we undertake no obligation to update them as a result of new information or future events unless required by law. We strongly advise all participants to refer to our filings with the Securities and Exchange Commission, SEC, including our most recent Form 20F and other periodic reports for a more detailed discussion of these risks and uncertainties. and for a more complete understanding of the risks inherent in our business operations and the potential impact of our future performance. We appreciate your continued interest in immunoprecise antibodies. I will now turn the call over to IPA's President and CEO, Dr. Jennifer Bass.

Thank you, Karen, and good morning, everyone. Thank you for joining us. to discuss today's IPAs fourth quarter and full year fiscal results for 2025. Fiscal year 2025 was a standout year for immunoprecise antibodies capped with record-setting fourth quarters. With $7 million in revenue, our fourth quarter delivered the highest quarterly revenue in our company's history. We also achieved a growth margin of 64% in the fourth quarter, up from 48% in the fourth quarter of fiscal year 24. This improvement reflects the impact of our continued focus on operational efficiency and disciplined execution. For the full fiscal year ending April 30th, 2025, we expanded our growth margins by 600 basis points from 49% to 55%. A key driver of this improvement was the exceptional growth of our BioStrand segment, which grew more than 180% year-over-year and delivered growth margins approaching 90%. As BioStrand continues this high growth path, we expect it to remain a strong contributor to the top-line performance and to support continued margin expansion going forward. Another key highlight in the fourth quarter was our record-adjusted EBITDA performance. We narrowed the loss to just $316,000, a significant improvement compared to the loss of $1.7 million in the same quarter last year. This marks meaningful progress and highlights the impact of our focus on operational efficiency and disciplined execution. In parallel and of note, our Canadian business showed strong growth in the fourth quarter. Sales orders reached $4.3 million this quarter, more than double historical quarters. Year-over-year sales in Canada increased by 47%, with quarterly orders coming in up 83%. Orders from new clients rose 93% year-over-year and 80% quarter-over-quarter. As we noted on our last earnings call, we've been actively moving forward with the divestiture of our Dutch subsidiary. I'm pleased to share that we are now in the final stages of that process with due diligence progressing with a single focused buyer. While the timeline has extended slightly beyond our original expectations, the transaction remains on track and we anticipate near-term completion. Once finalized, we expect this divestiture to sharpen our focus, streamline operations, and generate additional cash to further strengthen our balance sheet and support our strategic priorities. Shortly after the completion of the divestiture, we are rebranding to reinforce our position as a bio-native AI platform that integrates AI, connected data and advanced lab research. This signals our shift from a service-oriented model to a customizable, platform-driven business aligned with an industry transformation where AI and data integration are reshaping how drug discovery is done. We are positioned to deliver earlier insights, stronger candidate selection, and faster decision-making at scale. At the center is our Lens AI platform, powered by our patented HIFT technology. which transforms fragmented biological information into a computable model for precision discovery and development. This approach strengthens our value to partners, drives growth, and enhance our competitive advantage across the full biologic continuum. Now we will walk through some of our key milestones from the past several months. In February, we announced a strategic collaboration with RiboPro. to combine their messenger RNA antigen expression technology with our AI and wet lab antibody discovery platform, aimed at accelerating next-generation therapeutic development offerings. In March, we strengthened our AI infrastructure through strategic collaboration with Vulture and deploying AMD's MI300x GPUs to support the growing demands of our discovery platform. This upgrade has significantly increased our processing speed, improved scalability, and reduced compute costs by up to 66%, all of which contribute to stronger operational efficiency and improved margin potential as we grow. Also in March, we entered into a strategic partnership with a publicly traded, multi-billion dollar technology company focused on antibody drug conjugates and bispecific antibodies in oncology. This collaboration combines our B-cell select platform and AI discovery capabilities with their research infrastructure. The agreement has an initial value of $8 million, with the potential to reach $10 million over an 18- to 24-month term. In April, the FDA announced plans to phase out animal testing for monoclonal antibodies, a move that aligns with Lens AI's in silico capabilities to predict toxicity, immune response, and efficacy, reducing reliance on animal models. Also in April, we launched our presence in Cambridge, Massachusetts, offering fee-for-service biologic services, extending our geographic reach and service footprint in a core U.S. biotechnology hub. In May, we validated Lens AI's ability to map antibody-antigen interactions with accuracy comparable to X-ray crystallography, which is the industry gold standard, but in hours instead of weeks. This breakthrough significantly accelerates early discovery and reduces the need for complex, time-consuming lab work. In June, we announced a major advance in our dengue vaccine program. Using our HIFT-powered Lens AI platform, we identified a highly conserved epitope shared across all four dengue serotypes, a key step toward a universal vaccine. We also released in silico data showing the structural stability of the target and its potential to trigger a safe, balanced immune response, supporting its move toward translational studies. In the same month, we shared promising results from our AI-designed GLP-1 peptides, which matched or exceeded semaglutide in independent receptor activation assays. This milestone shows the versatility of our platform beyond vaccines, with clear applications across metabolic disease, infectious disease, and oncology. In July, we released a validation case study showing that Lens AI's immunogenicity screening can predict anti-drug antibody risks with strong correlation to real-world results. In direct comparison, it outperformed a leading industry benchmark. This supports its value in helping drug developers identify and de-risk problem candidates earlier in the discovery process. Also in July, we regained compliance with NASDAQ's minimum bid price requirement following 10 consecutive days of trading above the $1 threshold. While procedural, this milestone reflects growing market confidence in the evolution of our platform-driven, bio-native AI approach. On the leadership front, earlier this month, we welcomed John Lieber to our board. John brings over 30 years as a senior executive in biotechnology and life sciences, with deep experience in capital markets, corporate strategy, and governance at NASDAQ-listed companies, critical assets as we drive commercialization and scale platform adoption. We also expanded our advisory board with the appointment of Jeff Freed, an expert in healthcare data architecture and AI innovation. He's played a pivotal role in integrating vector search capabilities into Lens AI's platform via our InterSystems partnership. further enabling large-scale computation-driven discovery workflows. I'll now turn things over to Mr. Joe Scheffler for our financial updates.

Thank you, Jennifer. Please note that all numbers referenced are in Canadian dollars. As Jennifer mentioned earlier, BioStrand is currently delivering triple-digit revenue growth with margin near 90%, underscoring the strong performance and long-term value of this asset. Total revenue for the fourth quarter was $7 million, representing our highest quarterly revenues in the company's history. Fourth quarter revenue increased 8.1% over the year-ago quarter and 13.5% for the prior quarter. This strong revenue growth was driven by increasing sales to our service platforms, in particular, our Revit B-cell platform in Canada. Gross profit in the fourth quarter was $4.5 million, also at the highest level in the company's history. This represented a gross margin of 64%, up from 48% in the year-ago quarter, and 54% in the prior quarter. Gross margins in the fiscal year 2025 were 55%, up from 49% in fiscal year 2024. The significant increase in our gross margins over the past year was due in part to increasing sales from our BioStrand division, which has margins approaching 90%, much higher than our core wet lab business. We expect our gross margins to trend higher over time as BioStrand continues its growth trajectory and represents a larger portion of our revenues. With our strong fourth quarter revenues, our fiscal year 2025 revenues amounted to $24.5 million, a slight increase over our fiscal year 2024 revenues. R&D expenses in Q4 were $1.1 million, down 14% in the fourth quarter of last year. Sales and marketing expenses were $1 million in Q4, up from $900,000 in the year-ago quarter. General and administrative expenses in the fourth quarter were $3.7 million, down 10% from the fourth quarter of last year. In total, operating expenses excluding amortization and one-time charges declined to $5.8 million down 7% from the year-ago quarter and down 2% from the prior quarter. This year-over-year decline in operating expenses was driven primarily by lower G&A and lower R&D, while the sequential decline was driven by lower sales and marketing. Our decreasing operating expense is a result of our targeted focus on improving efficiency within the company. Adjusted EBITDA for the fourth quarter was a loss of 316,000, a significant improvement from a loss of 1.7 million in the year-ago quarter and a loss of 1.7 million in the prior quarter. As a percentage of revenues, adjusted EBITDA was a negative 5% in the fourth quarter, a big improvement. over the negative 24% in the year-ago quarter and the negative 25% in the prior quarter. Again, these improvements are the result of reducing our expenses as well as improved gross margins. As of April 30th, 2025, we held $10.8 million in cash compared to $3.5 million at fiscal year end of 2024. With our strong CAAS position, validated AI economics, and strong partner momentum, we believe we are entering a new fiscal year in a financially disciplined position to support our growth. Thank you. And now we'll turn it back to the operator for the Q&A portion of our call.