Q4 2024 Champions Oncology Inc Earnings Call

July 18, 2024

Greetings. Welcome to Champions Oncology's fourth quarter fiscal year 2024 earnings conference call. At this time, all participants have been placed on a listen-only mode.

Speaker Change: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Dr. Ronnie Morris, CEO at Champions Oncology. You may begin.

Operator: Please note this conference is being recorded. I will now turn the conference over to your host, Dr. Ronnie Morris, CEO of Champions Oncology. You may begin.

Ronnie Morris: Good afternoon. I am Ronnie Morris, CEO of Champions Oncology. Joining me today is David Miller, our Chief Financial Officer. Thank you for joining us for our quarterly earnings call. Before I begin, I'll remind you that we'll be making forward-looking statements during today's call and that actual results could be different materially from what is described in those statements. Additional information on factors that cause results to differ is available in our Forms 10-Q and Forms 10-K. A reconciliation of non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the hearings released.

Before I begin, I will remind you that we will be making forward-looking statements during today's call, and that actual results could differ materially from what is described in those statements.

Ronnie Morris: Additional information on factors that cause results to differ is available in our Forms 10-Q and Forms 10-K. A reconciliation of non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the hearings release.

Ronnie Morris: 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. I will detail the negative impacts and then transition to the emerging positive trends. Over the year, we discussed our challenges, indicating they were caused by a combination of external and internal factors. Externally, the weakness and retraction in the biotech sector negatively affected their R&D budgets, thus leading to a decrease in our bookings growth that we have been accustomed to achieving.

Speaker Change: 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.

Speaker Change: I will detail the negative impacts and then transition to the emerging positive trends.

Speaker Change: Over the year, we discussed our challenges indicating they were caused by a combination of external and internal factors.

Speaker Change: Externally, the weakness and retraction in the biotech sector negatively affected their R&D budgets, thus leading to a decrease in our bookings growth that we have been accustomed to achieving. Our bookings were still solid, but they did not expand from the prior year.

Ronnie Morris: Our bookings were still solid, but did not expand from the prior year. The biotech economic environment resulted in fewer new companies booking services, as well as a slight decrease in our average study size. This weakness did not only manifest itself with our bookings; we also experienced a cancellation rate above our historical norms, while noticing that customers were quicker to pull the plug on a study or parts of a study than in the past. Lower bookings and increasing cancellations weigh heavily on revenue conversion.

Speaker Change: The biotech economic environment resulted in less new companies booking services as well as a slight decrease in our average study size.

Speaker Change: This weakness did not only manifest itself with our bookings, we also experienced a cancellation rate above our historical norms, while noticing that customers were quicker to pull the plug on a study or parts of the study than in the past. The lower bookings and increasing cancellations weighed heavily our revenue conversion.

Ronnie Morris: Additionally, as we discussed over the course of the year, we were plagued by some operational issues that impacted our financial results. These issues led to the need to repeat some of the work, increasing our costs and delaying revenue recognition. Now the better news, 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. Cancellations on more recently signed bookings have slowed.

Speaker Change: Additionally, as we discussed over the course of the year, we were plagued by some operational issues that impacted on our financial results.

Speaker Change: These issues led to the need to repeat some of the work increasing our costs and delaying the revenue recognition.

Speaker Change: Now the better news, as we end the year and pivot towards our new fiscal year

Speaker Change: We have detected a gradual loosening of R&D budgets leading to an uptick in opportunity generation. Cancellations on more recently signed bookings have slowed. Strategically, we have focused on expanding and deepening relationships with our big pharma customers.

Ronnie Morris: Strategically, we have focused on expanding and deepening the relationships with our big pharma customers. These customers have the ability to sign larger studies and are somewhat less susceptible to downturns in this sector. IoTeX companies are still an integral part of our business, but we feel that this strategic focus provides upside opportunity and downside protection. Regarding our internal challenges, we are confident that the operations are back on track and built more to scale than previously constructed.

Speaker Change: These customers have the ability to sign larger studies and are somewhat less susceptible to downturns in this sector.

Speaker Change: BioTech companies are still an integral part of our business, but we feel that this strategic focus provides upside opportunity and downside protection.

Speaker Change: Regarding our internal challenges, we are confident that the operations are back on track and built more to scale than previously constructed. The evidence of this is in the improved revenue number and adjusted profitability achieved in Q4, which is the result of some of our operational improvements.

Ronnie Morris: The evidence of this is in the improved revenue number and adjusted profitability achieved in Q4, which is the result of some of our operational improvements. We also believe that we have redesigned our operational teams and improved our systems to enable revenue growth with a smaller increase in our operating costs, leading to improved growth margins as our revenue expands. Turning to our core products, PDX spending continues to give us an industry-leading edge, and our in vivo business remains strong.

Speaker Change: We also believe that we have redesigned our operational teams and improved our systems to enable revenue growth with a smaller increase in our operating costs, leading to improved growth margins as our revenue expands.

Speaker Change: Turning to our core products, the PDF expanding continues to give us an industry-leading edge and our in vivo business remains strong.

Ronnie Morris: We continued to develop our Ex Vivo platform and made a key strategic hire at the end of the fiscal year. Ex Vivo has contributed meaningfully to our top-line growth over the last few years with a revenue contribution of excess of 10%, and we are optimistic that with this key addition, we're going to see Ex Vivo's contribution increase even more substantially, driving revenue growth and lifting our overall gross margin. Our clinical biomarker business is growing, and we are working to further expand our customer base.

Speaker Change: We continued to develop our ex vivo platform and made a key strategic hire at the end of the fiscal year.

Speaker Change: Xvivo has contributed meaningfully to our top-line growth over the last few years, with a revenue contribution of excess of 10%, and we are optimistic that with this key addition, we're poised to see Xvivo's contribution increase even more substantially, driving revenue growth and lifting our overall gross margin.

Speaker Change: Our clinical biomarker business is growing and we are working to further expand the customer base.

Ronnie Morris: With regard to Corellia, our wholly owned drug development subsidiary, we continue to be excited about the targets and the compounds that we have developed. We are actively engaged in discussions to out-license several of our programs. We are cognizant of the impact on our bottom-line results and the carrying cost for this entity. As such, we are working to minimize the burden on two fronts.

Speaker Change: With regards to Corellia, our wholly owned drug development subsidiary, we continue to be excited about the targets and the compounds that we have developed.

Speaker Change: We are actively engaged in discussions to out-license several of our programs.

Speaker Change: We are cognizant of the impact on our bottom line results and the caring cost for this entity. As such, we are working to minimize the burden on two fronts.

Ronnie Morris: First, we are reducing our spending while we are actively searching for a potential licensee, while not harming the target's development. Second, we continue to be actively engaged with investors in an effort to raise capital to support and accelerate our growth. In summary, the year's performance, while anticipated, was below historical expectations.

Speaker Change: First, we are reducing our spending while we are actively searching for potential licensee while not harming the target's development. Second, we continue to be actively engaged with investors in an effort to raise capital to support and accelerate our growth.

Speaker Change: In summary, the year's performance, while anticipated, was below historical expectations. We anticipate that the improvements made will slowly continue to take hold as we head into this last quarter and put us back on our targeted trajectory as we head into our new fiscal year.

Ronnie Morris: We anticipate that the improvements made will slowly continue to take hold, as we have seen in this last quarter, and put us back on our targeted trajectory as we head into our new fiscal year. Despite the down year from a financial perspective, we continue to have robust bookings, a comprehensive platform, a stellar reputation, and a strong team that is poised for the next stage. We are confident that we will emerge with stronger revenue and profitability over the long term. Now, let me turn the call over to David Miller for a more detailed review of the financials.

Speaker Change: Despite the down year from a financial perspective, we continue to have a robust bookings, a comprehensive platform, a stellar reputation, and a strong team that is poised for the next stage. We are confident that we will emerge with stronger revenue and profitability over the long term.

Speaker Change: Now, let me turn the call over to David Miller for a more detailed review of the financial results.

David Barry Miller: As Ronnie mentioned, fiscal 2024 was challenging, as evidenced by our financial... For the first time in many years, we saw a contraction in our top line, with revenue coming in at $50 million, representing a year-over-year decline of approximately $4 million, or 7%, leading to a larger net loss for the year. On a gap basis, our loss from operations for fiscal year 2024 was $7.4 million compared to a loss of $5.3 million in 2023.

David Barry Miller: Thanks, Ronnie. As Ronnie mentioned, Fiscal 2024 was challenging, as evidenced by our financial results.

David Barry Miller: For the first time in many years, we saw a contraction in our top line, with revenue coming in at $50 million, representing a year-over-year decline of approximately $4 million, or 7%, leading to a larger net loss for the year.

David Barry Miller: Included in the $7.4 million loss are non-cash expenses totaling approximately $3.5 million, which included stock compensation, depreciation, and a loss on disposal of equipment. Excluding these non-cash items, our adjusted loss was $3.9 million for 2024 compared to an adjusted loss of $1.3 million in the year-ago period. Turning the focus to the fourth quarter and cash-based results, we began to see the signs of the long-awaited financial rebound in the fourth quarter.

David Barry Miller: On a gap basis, our loss from operations for fiscal year 2024 was $7.4 million compared to a loss of $5.3 million in 2023.

David Barry Miller: Included in the $7.4 million loss are non-cash expenses totaling approximately $3.5 million, which included stock comp, depreciation, and a loss on disposal of equipment.

David Barry Miller: Excluding these non-cash items, our adjusted loss was $3.9 million for 2024 compared to an adjusted loss of $1.3 million in the year-ago period.

David Barry Miller: Turning the focus to the fourth quarter and cash-based results, we began to see the signs of the long-awaited financial rebound in the fourth quarter.

David Barry Miller: Our revenue increased to $14 million compared to $13.1 million in the year-ago period, an increase of $900,000, or 7%. Our adjusted EBITDA was approximately $900,000 compared to an adjusted loss of $900,000 in Q4 of 2023. Total cost of sales was $7.2 million compared to $7.1 million in our fourth quarter last year, an increase of 1%. The relatively unchanged cost of sales on revenue that was approximately $1 million higher is indicative of the measures taken to improve efficiencies and right-size our operational team to leverage our costs on a growing revenue base.

David Barry Miller: Our revenue increased to $14 million compared to $13.1 million in the year-ago period, an increase of $900,000, or 7%.

David Barry Miller: Our adjusted EBITDA was approximately $900,000 compared to an adjusted loss of $900,000 in Q4 of 2023.

David Barry Miller: Total cost of sales was $7.2 million compared to $7.1 million in our fourth quarter last year, an increase of 1%.

David Barry Miller: The relatively unchanged cost of sales on revenue that was approximately $1 million higher is indicative of the measures taken to improve efficiencies and right-size our operational teams to leverage our costs on a growing revenue base.

David Barry Miller: For the year, cost of sales was $29.1 million, compared to $28.8 million a year ago, representing a similar 1% increase. Although total sales costs were mostly unchanged for the year, the variable component of our cost of sales was high relative to our revenue due to expenses related to repeat work and other inefficiencies. For Q4, Pharmacology Services' gross margin expanded to 49% compared to 47% in the fourth quarter last year.

David Barry Miller: For the year, cost of sales was $29.1 million compared to $28.8 million a year ago, representing a similar 1% increase.

David Barry Miller: Although total sales costs were mostly unchanged for the year, the variable component of our cost of sales was high relative to our revenue due to expenses related to repeat work and other inefficiencies.

David Barry Miller: For Q4, Pharmacology Services gross margin expanded to 49% compared to 47% in the fourth quarter last year.

David Barry Miller: We had been guiding that margins would be under pressure during 2024, but we are confident this quarter's improvement is more reflective of future results as compared to the 43% margins delivered for the full year. For the fourth quarter, R&D expense was approximately $2 million, compared to $2.8 million in the year-ago period. And for the year, R&D expense was $9.5 million, compared to $11.5 million for fiscal 2020. The decline in R&D for both the fourth quarter and year-over-year was attributed to our stated strategy to more strategically manage our R&D spend while maintaining the ability to support future growth and sustain our target discovery efforts.

David Barry Miller: For the fourth quarter, R&D expense was approximately $2 million, compared to $2.8 million in the year-ago period. And for the year, R&D expense was $9.5 million, compared to $11.5 million for fiscal 2023.

David Barry Miller: The decline in R&D for both the fourth quarter and year-over-year was attributed to our stated strategy to more strategically manage our R&D spend while maintaining the ability to support future growth and sustain our target discovery effort.

David Barry Miller: For the fourth quarter, sales and marketing expense was $1.8 million, remaining relatively unchanged from the prior year. Similarly unchanged, the full-year expense was $6.9 million, compared to $6.8 million last year. Our G&A expense was $2.1 million for the fourth quarter compared to $2.2 million for the fourth quarter last year. And for the year, G&A expense was $8.5 million, compared to $8.1 million in the year-ago period

David Barry Miller: For the fourth quarter, sales and marketing expense was $1.8 million, remaining relatively unchanged to the prior year. Similarly unchanged, the full year expense was $6.9 million compared to $6.8 million last year.

David Barry Miller: Our G&A expense was $2.1 million for the fourth quarter compared to $2.2 million for the fourth quarter last year. And for the year, G&A expense was $8.5 million compared to $8.1 million in the year-ago period.

David Barry Miller: This was primarily due to an increase in compensation-related costs offset by a reduction in IT and professional services. Looking ahead to fiscal year 2025, we anticipate keeping G&A mostly flat while reducing its percentage of total revenue, now turning to cash. We ended the year with $2.6 million of cash on the balance sheet and no debt. For the quarter, cash, use, and operating activities was $1.8 million.

David Barry Miller: This is primarily due to an increase in compensation-related costs offset by a reduction in IT and professional fees.

David Barry Miller: Looking ahead to fiscal year 2025, we anticipate keeping G&A mostly flat while reducing its percentage of total revenue.

David Barry Miller: Now, turning to cash. We ended the year with $2.6 million of cash on the balance sheet and no debt. For the quarter, cash used in operating activities was $1.8 million.

David Barry Miller: Looking ahead to fiscal year 2025, we anticipate maintaining a generally cash-neutral position over the next three quarters. We are carefully managing and monitoring our cash balance and expect that with improving bottom-line results, our cash position will rebound over the long term. We do not anticipate significant capex over the course of a year as investments have already been made in prior periods to automate our ex vivo platform and other lab functions to increase capacity and improve efficiencies, allowing us to increase our revenue and expand our margins.

David Barry Miller: We do not anticipate significant CapEx over the course of a year, as investments have already been made in prior periods to automate our ex vivo platform and other lab functions to increase capacity and improve efficiencies, allowing us to increase our revenue and expand our margins.

David Barry Miller: In summary, our 2024 financial results, although not unexpected, were weaker than we were accustomed to delivering as we were impacted by the multiple obstacles outlined on this call. However, despite the setback, we feel that we're slowly emerging from the downturn, as evidenced by our fourth quarter results, and we're confident in the long-term prospects for the company. Looking ahead to the first half of 2025, we're going to be focused on our bottom line results, with an expectation of profitability and revenue growth compared to the first half of 2023.

David Barry Miller: In summation, our 2024 financial results, although not unexpected, were weaker than we were accustomed to delivering, as we were impacted by the multiple obstacles outlined on this call.

Speaker Change: However, despite the setback, we feel that we're slowly emerging from the downturn as evidenced by our fourth quarter results, and we're confident in the long-term prospects for the company.

Speaker Change: Looking ahead to the first half of 2025, we're going to be focused on our bottom-line results with an expectation of profitability and revenue growth compared to the first half of 2023.

David Barry Miller: I want to reiterate the message that despite the decline in this past year, our long-term prospects are positive, and we look forward to improving the financial results in the coming quarter. We'll have a quick turnaround time before our next call, which should be in approximately seven weeks when we report our first quarter results. We will now open the call to questions.

Speaker Change: I want to reiterate the message that despite the decline in this past year, our long-term prospects are positive and we look forward to improving the financial results in the coming quarter.

Speaker Change: We'll have a quick turnaround time before our next call, which should be in approximately seven weeks when we report our first quarter results. We will now open the call to questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please press star 1 if you would like to ask a question at this time. One moment please while we poll for questions.

Operator: Once again, please press star 1 if you would like to ask a question at this time. One moment, please, while we poll for questions. We did have a question in queue coming from Matt Hewitt on behalf of Craig Holland. Matt, your line is live.

Speaker Change: We did have a question in queue coming from Matt Hewitt from Craig Holland. Matt, your line is live.

Matthew Gregory Hewitt: Good afternoon, and congratulations on the early stages of recovery. Maybe to dig in a little bit more on the macro situation, it sounds like things are maybe improving a little bit. I'm just curious if what you saw here in Q4 was a function of maybe some projects that had been delayed or held off in the last couple quarters that are finally getting funding and starting to be implemented, or was this some new business that you had received either later in Q3 or even early Q4 because of the improving funding environment for pharma and biotech?

Matthew Gregory Hewitt: Good afternoon and congratulations on the early stages of recovery. Maybe to dig in a little bit more on the macro situation, it sounds like things are maybe improving a little bit. I'm just curious if...

Speaker Change: What you saw here in Q4, was that a function of maybe some projects that had been delayed or held off on the last couple quarters that are finally getting funding and starting to be implemented, or was this some new business that you had received either, you know, later in Q3 or even early Q4 because of the improving funding environment for pharma and biotech?

Ronnie Morris: Yeah, I think Matt, that we're certainly seeing more opportunity generation, and we're seeing better discussions with farmers and biotech. But I wouldn't say it's back to the way it was necessarily in 2021.

Speaker Change: Yeah, I think, Matt, that we're certainly seeing more opportunity generation. We're seeing better discussions with pharma and biotech. I wouldn't say it's back to the way it was necessarily.

Ronnie Morris: But we're definitely seeing an opening compared to last year, so there are a lot of positive areas in that respect. I would say that the trend that we started to see in Q4 is an accumulation of a bunch of different factors. I think one was just a little bit of a decrease in cancellations. I think two, it was some of our operational efficiencies that we've been working on for a while, just really getting into gear and us being able to complete the work and just getting stuff done.

Speaker Change: 2021, but we're definitely seeing an opening compared to last year. So there's a lot of positive areas in that respect. I would say that

Speaker Change: that we started to see in Q4 is an accumulation of a bunch of different factors. I think one was just a little bit of a decrease in the cancellations. I think two, it was a decrease

Speaker Change: Some of our operational efficiencies that we've been working on for a while, just really getting into gear and us being able to complete the work and just getting the

Ronnie Morris: And I think it's partially attributed to what you said of just things opening up. So I think it was just a combination of a bunch of different things. I think one of the things we had to do over the last year when things got tighter, last year and a half, I should say, when things got tighter, is we just had to improve. Commercially, and from a marketing perspective, I think we just had to become better.

Speaker Change: and I think it's partially attributed to what you said of just things opening up. So I think it was just a combination of a bunch of different things. I think one of the things we had to do over the last year when things got tighter, the last year and a half I should say when things got tighter,

Speaker Change: We just had to improve it as an organization, both operationally,

Speaker Change: and commercially, and from a marketing perspective, I think it just had to become better. And so I think a lot of those things are now in place and gives us a really good position to go forward in fiscally this

Ronnie Morris: And so I think a lot of those things are now in place and give us a really good position to go forward in fiscal this year. So it's hard to sometimes parse out, you know, what's 100% attributable to just getting back on track. I think it's a combination of...

Speaker Change: fiscal year. So it's hard to sometimes parse out, you know, what's a hundred percent attributing to just getting back on track. I think it's a combination of...

Ronnie Morris: Got it. That's helpful. And then you mentioned a couple of times now the operational improvements that you've implemented to drive faster revenue conversion. Could you go into maybe a little bit more detail as to what those improvements are? And are we on the early stages of seeing the benefits of these? Or have they already been implemented? You're basically where you want to be, and now it's just a function of getting more deals across the trans

Speaker Change: those factors.

Speaker Change: Got it. That's helpful. And then you mentioned a couple times now the operational improvements that you've implemented to drive faster revenue conversion.

Speaker Change: Could you go into maybe a little bit more color as to what those improvements are and are we on the early stages of seeing that the benefits of those or have they been implemented you're basically where you want to be and now it's just a function of getting more deals across the transom.

Ronnie Morris: Yeah, I think in every organizational evolution, and certainly, we had a fairly rapid growth spurt over the last couple of years, I think you get to a point where the fundamental operations are sometimes just not in the right shape for the growth of the company, and I think that's a little bit what happened to us, that, in combination with just needing to get some better management in place. So there were a couple of issues in terms of just getting the studies done. Remember, we deal with a biological system, so sometimes things take a little longer than others.

Speaker Change: Yeah, I think...

Speaker Change: I think in every organizational evolution and you know certainly we had a fairly rapid growth spurt over the last couple years I think you get to a point where where the fundamental operation sometimes

Speaker Change: are just not in the right shape for the growth of the company. And I think that's a little bit what happened to us. That in combination with just needing to get some better management in place. So there were a couple of issues in terms of just getting.

Speaker Change: study is done. Remember, we

Speaker Change: We deal.

Speaker Change: with a biological system, so sometimes things take a little longer than others. But I think from both a technological perspective, a process perspective, a management perspective,

Ronnie Morris: But I think from both a technological perspective, a process perspective, a management perspective, we just use that opportunity to upgrade in all areas. So making things more efficient, more scalable, to be able to get to that next level and bump up the next level. So we certainly feel very comfortable that we're going to get back to the margins that we had seen in prior years. And we feel very comfortable now about a lot of the changes that we made from a kind of operational perspective, just to become more efficient, more scalable, more reliable, on and on.

Speaker Change: We just use that opportunity to just upgrade in all areas. So making things more efficient, more scalable, to be able to get to that next level and bump up the next level. So we certainly feel very comfortable that we're going to get back to the margins that we had.

Speaker Change: had seen in prior years, and we feel very comfortable now about a lot of the changes that we made in kind of an operational perspective just to become more efficient, more scalable, more reliable, on and on.

Ronnie Morris: Got it. In your prepared remarks, you mentioned that you've increased or you're putting a little more emphasis or focus on your big pharma, your large pharma customers. Do you know what percentage...

Speaker Change: Got it. In your prepared remarks, you mentioned that you've increased or you're putting a little more emphasis or focus on your big pharma, your large pharma customers. Do you know what percentage of your revenues are coming from large pharma?

Ronnie Morris: I'm going to shoot it there.

Speaker Change: I'm going to shoot that up to David because it changes all the time, so David, do you have a moment? Yeah, yeah, sure. It does change all the time.

David Barry Miller: David, because it changes all the time. So David, do you have a moment? Yeah, yeah, sure.

David Barry Miller: It does change all the time, but rough estimates are that approximately 40% of the top tier customers are mobile. And we've remained pretty evenly distributed over the years, what we call tier A, B, and C, with tier C being the new biotech, tier A being the top pharma, and tier B being somewhere in the middle. So we've been pretty much relatively evenly distributed over many years. But I think over the last year or so, we've had more of an emphasis in terms of getting deeper into our top tier customers.

Speaker Change: [inaudible]

David Barry Miller: over the years, what we call Tier A, B, and C. Tier C being the new biotech, Tier A being the top pharma, and Tier B being somewhere in the middle. So we've been pretty much relatively evenly distributed over many years, but I think over the last year or so, we've had more of an emphasis in terms of getting deeper into our top tier customers. And we're starting to see some of the larger, I would say, opportunities coming from them. So we think that we see that it's starting to take hold, and we anticipate that that'll have maybe skew the revenue conversion towards the top tier customers over the coming year.

David Barry Miller: And we're starting to see some of the larger, I would say, opportunities coming from them. So we think that we see that it's starting to take hold. And we anticipate that that'll maybe skew the revenue conversion towards the top tier customers over the coming year.

Matthew Gregory Hewitt: Got it. And then maybe one more, and I'll hop back into Q.

Speaker Change: Got it. And then maybe one more and I'll hop back into Q. But when you look at it, obviously you return to growth here in Q4 for the first time in a year. That's fantastic news. It sounds like you're forecasting or projecting growth for the first half. Do you feel like we've turned the corner at this point and you can not only get back to some growth, but maybe get back to your historical growth levels? Or do you think that's going to take a little bit longer? Thank you.

Matthew Gregory Hewitt: But when you look at, obviously, you return to growth here in Q4 for the first time in a year. That's fantastic news. It sounds like you're forecasting or projecting growth for the first half. Do you feel like we've turned the corner at this point, and you can not only get back to some growth but maybe get back to your historical growth levels? Or do you think that it's going to take a little bit longer? Thank you.

Ronnie Morris: Yeah, I think that it's a little hard for us to have a crystal ball on that right now because we're still trying to figure out what's happening out there externally. But we feel very confident that we've gotten back to profitability. We feel very confident that there is growth. The question about historical growth and where the markets are at is something that we still need a little more time to see how things shake out, given a lot of guidance on that.

Operator: Yeah, I think that it's a little hard for us to have a crystal ball on that right now because we're still trying to figure out what's happening out there externally. So we feel very confident that we've gotten back to profitability. We feel very confident that there's growth; you know, the question about historical growth and where the markets are at, that's something that we still need a little more time to see how things shake out. So that's why we haven't really given a lot of guidance on that.

Speaker Change: Yeah, I think that

Speaker Change: It's a little hard for us to have a crystal ball on that right now because we're still trying to figure out what's happening out there externally, so we feel very confident.

Speaker Change: that we've gotten back to profitability.

Speaker Change: We feel very confident that there's growth. The question about historical growth and where the markets are at, that's something that we still need a little more time to see how things shake out. So that's why we haven't really...

Ronnie Morris: But hopefully, over the next quarter or two, when we get a sense of how this market's turning around, how a lot of our upgrades and our changes are taking effect, we should have a better idea whether we can get back up to those higher growth rates that we've been accustomed to.

Operator: But hopefully, over the next quarter or two, when we get a sense for how this market's turning around, how a lot of our upgrades and our changes are taking effect, we should have a better idea whether we can get back up to those higher growth rates that we've been accustomed to.

Speaker Change: given a lot of guidance on that, but hopefully over the next quarter or two when we get a sense for how this market is turning around, how a lot of our upgrades and our changes are taking effect,

Speaker Change: We should have a better idea whether we can get back up to those higher growth rates that we've been accustomed to.

Matthew Gregory Hewitt: Got it. All right. Thank you and congratulations again. Thank you, Matt.

Matthew Gregory Hewitt: Got it. All right. Thank you.

Matt: Got it. All right.

Matt: Thank you and congratulations again.

Operator: Thank you, Matt. Thank you.

Speaker Change: Got it. All right. Thank you and congratulations again.

Operator: Thank you, and if there are any other questions, please press star 1 on your phone at this time. There were no other questions from the lines at this time. I would now like to hand the call back to Dr. Ronnie Morris for closing remarks.

Operator: And if there were any other questions, please press star one on your phone at this time. And there were no other questions from the lines at this time.

Matthew Gregory Hewitt: Thank you, Matt.

Speaker Change: Thank you, and if there were any other questions, please press star 1 on your phone at this time.

Ronnie Morris: I would now like to hand the call back to Dr. Ronnie Morris for closing remarks. Thank you. Thank you for joining us for our quarterly earnings call. We're excited to get back to profitability. We feel very good about where the business is at right now. And, of course, the optimistic is that we're the biotech and the pharma world is going. So, with that, we look forward to speaking to everybody to give them our Q1 results in approximately seven weeks. So have a good evening, everybody. Thank you for joining us. Thank you.

Speaker Change: And there were no other questions from the lines at this time. I would now like to hand the call back to Dr. Ronnie Morris for closing remarks.

Ronnie Morris: Thank you, thank you everybody for joining us for our quarterly earnings call. We're excited to get back to profitability. We feel very good about where the business is at right now and cautiously optimistic about where the biotech and the pharma world is going. So with that, we look forward to speaking to everybody to give them our Q1 results in approximately seven weeks. So, have a good evening everybody. Thank you for joining us.

Speaker Change: Thank you. Thank you everybody for joining us for our quarterly earnings call. We're excited to get back to profitability. We feel very good about where the business is at right now.

Speaker Change: cautiously optimistic about where the biotech and the pharma world is going. So with that, we look forward to speaking to everybody to give them our Q1 results in approximately seven weeks. So have a good evening, everybody. Thank you for joining us.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This does conclude today's conference. You may disconnect your lines at the time. Thank you for your participation.

Speaker Change: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Q4 2024 Champions Oncology Inc Earnings Call

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