Champions Oncology Q4 Earnings Call Highlights

Key Points

• Record fiscal 2026 performance: Revenue reached $59.4 million, up from the prior year, and adjusted EBITDA was positive in every quarter, totaling $1.6 million for the year. Fourth-quarter revenue rose 12% year over year to $13.8 million.
• Core services drove growth and margins: Translational Oncology Solutions revenue increased approximately 12% to $58.7 million, while fourth-quarter gross margin improved to 51% as more radiopharmaceutical work moved in-house.
• Growth investments and funding remain priorities: Data-license revenue declined to $800,000 after a nonrecurring large transaction in fiscal 2025, though management cited a growing pipeline. Champions is also seeking outside funding or a licensing deal for Corellia and ended the year with $4.9 million in cash and no debt.

Champions Oncology NASDAQ: CSBR reported record revenue for fiscal 2026 and positive adjusted EBITDA in every quarter of the year, supported by growth in its core Translational Oncology Solutions, or TOS, services business and efforts to bring radiopharmaceutical work in-house.

For the fourth quarter, revenue rose 12% year over year to $13.8 million. Full-year revenue reached a record $59.4 million, while adjusted EBITDA totaled $1.6 million. Fourth-quarter adjusted EBITDA was $158,000, marking the company’s fourth consecutive quarter of positive adjusted EBITDA.

CEO Rob Brainin said fiscal 2026 was an investment year in which the company continued to fund its data platform, its Corellia therapeutic subsidiary and growth initiatives within its research-services operations while meeting its profitability objective.

“In fiscal 2026, we delivered record annual revenue and met our commitment to full-year positive Adjusted EBITDA, including positive Adjusted EBITDA in each of the four quarters on its own, the first time that has happened since fiscal 2022,” Brainin said.

Services Business Drives Record Revenue

The company’s Translational Oncology Solutions business produced its strongest year to date, according to Brainin. Services revenue increased about 12% from the prior year to a record $58.7 million, benefiting from the conversion of previously booked studies and the company’s patient-derived xenograft, or PDX, model bank.

Brainin said the operations team delivered that growth without material additions to headcount, which he characterized as evidence of improving operating leverage. He also cautioned that quarterly results can vary based on study-completion timing and said the company evaluates the services business on an annual basis.

Following strong study conversion in fiscal 2026, Champions Oncology expects services growth to moderate toward a more normalized pace in the near term. However, Brainin said the demand environment remains healthy, with the company focused on expanding bookings and its future work pipeline.

Data Revenue Declines Following Prior-Year Transaction

Data-license revenue was approximately $800,000 in fiscal 2026, compared with $4.7 million in fiscal 2025. Management said the prior-year figure included one large transaction that did not recur.

The fourth quarter did not include meaningful data revenue. Some revenue expected in the period, including revenue connected with a previously discussed larger agreement, shifted into the first quarter of fiscal 2027, Brainin said.

Management said the timing and scale of individual data transactions can create significant quarter-to-quarter revenue fluctuations. Still, Brainin said the company expanded its customer base through smaller licensing agreements during fiscal 2026 and continued to pursue larger strategic licensing opportunities.

“Our pipeline has also grown, both in the number of opportunities and the size of potential transactions,” Brainin said, adding that customer engagement has increased around the combination of deeply characterized models and clinically relevant data.

The company continues to invest in its data platform, which management views as a longer-term opportunity. Brainin said Champions Oncology’s predictive modeling capabilities could be strengthened by combining its data sets with machine learning and artificial intelligence, potentially helping partners identify signatures, select patients and design clinical trials.

Margins Improve as Radiopharmaceutical Work Moves In-House

Chief Financial Officer David Miller said fourth-quarter gross margin improved to 51%, compared with 41% in the prior-year period. He attributed the gain to cost discipline and a meaningful reduction in outsourced radiopharmaceutical costs as the company transitions more of that work internally.

For the full year, reported gross margin increased to 48% from 46%. Miller said the underlying improvement in the core study-services business was greater than the reported increase suggests, because fiscal 2025 benefited from higher-margin data revenue and fiscal 2026 included temporarily outsourced radiopharma costs.

Operating expenses increased during the year as planned. Approximately $3 million of the increase was related to temporary outsourced radiopharma activities, while the remainder largely reflected development of the data platform and an expanded sales and marketing organization, Miller said.

The company ended fiscal 2026 with $4.9 million in cash and no debt.

Corellia Funding Discussions Continue

Champions Oncology’s fiscal 2027 budget assumes Corellia, its wholly owned therapeutic subsidiary, will be funded for the full year. Brainin said the company continues discussions with venture capital groups and potential pharmaceutical partners regarding external funding or a licensing partnership.

If the company secures outside funding or a licensing arrangement, capital currently being directed to Corellia could be redeployed to other growth initiatives, particularly the data business, or contribute to the bottom line, he said.

Brainin did not provide a timetable for a potential transaction, noting that such processes can take time in the current biotech funding environment. He said discussions remain active, feedback has been positive and the data supporting the program continues to strengthen.

Looking ahead, management said its fiscal 2027 priorities include executing its operating plan, improving profitability and maintaining financial discipline while evaluating investments that could generate long-term returns.

About Champions Oncology (NASDAQ:CSBR)

Champions Oncology, Inc engages in the development and sale of technology solutions and products to personalize the development and use of oncology drugs. Its technology platform, TumorGraft, is a novel approach to personalizing cancer care based upon the implantation of human tumors in immune-deficient mice. It uses its technology to offer solutions to Translational Oncology Solutions, which includes pharmaceutical and biotechnology companies; and Personalized Oncology, which assists physicians in developing personalized treatment options for their cancer patients.

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