Q1 2025 Cerus Corp Earnings Call
Operator: Good day, ladies and gentlemen.
Operator: Thank you for standing by and welcome to the Cerus Corporation first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.
Good day, ladies and gentlemen, thank you for standing by and welcome to the Cirrus Corporation first quarter 2025 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. Please press star one one on your.
Operator: To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.
Speaker Change: Telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to Tim Lee serious head of Investor Relations. Kim you may begin.
Tim Lee: I would now like to hand the conference over to Tim Lee, Cerus Head of Investor Relations. Tim, you may begin. Thank you and good afternoon everyone. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at ir.cerus.com.
Speaker Change: Thank you and good afternoon, everyone.
Speaker Change: I'd like to thank everyone for joining us today as.
Speaker Change: As part of today's webcast. We are simultaneously displaying slides you can follow you can access the slides on the Investor Relations website at IR Dot Dot com.
Tim Lee: With me on the call are Obie Greenman, CERUS's President and Chief Executive Officer. Vivek Jayaraman, Cerus' Chief Operating Officer. Kevin Green, Cerus' Chief Financial Officer, and Carol Moore, Cerus' Senior Vice President.
With me on the call are Obi agreement.
Speaker Change: President and Chief Executive Officer.
Speaker Change: The big Jeremy Sirius as Chief operating Officer.
Kevin Green: Kevin Green <unk>, Chief Financial Officer.
There are more serious as senior Vice President.
Tim Lee: Cerus issued a press release today announcing our financial results for the first quarter and in March 31st, 2025, and describing the company's recent business highlights. You can access a copy of this announcement on the company's website at www.cerus.com.
Kevin Green: Sears issued a press release today announcing our financial results for the first quarter ended March 31, 2025, and describing the company's recent business highlights.
Kevin Green: You can access a copy of this announcement on the company's website at Www Dot Sirius Dot com.
Tim Lee: I'd like to remind you that some of the statements we'll make on the call relate to future events and performance rather than historical facts and are forward looking statements. Examples of forward-looking statements include those related to our future financial and operating results. including our 2025 Product Revenue Guidance. Our expectations for bottom line and non-gap adjusted ethanol performance. are operating expense and gross margin expectations. and our expectations for positive operating cash flows for 2025. expected future growth in our growth trajectory. Expectations with respect to our enhanced CE mark submission for intercept red blood cells. Expectations with respect to our new INT200 illumination device.
Kevin Green: I'd like to remind you that some of the statements we'll make on the call relate to future events and performance rather than historical facts and are forward looking statements.
Kevin Green: Examples of forward looking statements include those lead to our future financial and operating results.
Kevin Green: Our 2025 product revenue guidance.
Kevin Green: Our expectations for bottom line and non-GAAP adjusted EBITDA performance.
Kevin Green: Our operating expenses and gross margin expectations.
Kevin Green: And our expectations for positive operating cash flows for 2025.
Kevin Green: Expected future growth and our growth trajectory.
Kevin Green: Expectations with respect to our enhanced CE mark submission for intercept red blood cells.
Kevin Green: Expectations with respect to our new Iot 200 elimination device.
Tim Lee: Expectations with respect to patient enrollment in our Phase 3 RETA study and other statements that are not historical facts. These four Lickman statements involve risk and uncertainties that can cause actual events, performance, and results in different material.
Kevin Green: Expectations with respect to patient enrollment in our phase III study and other statements that are not historical facts.
Kevin Green: These forward looking statements involve risks and uncertainties that could cause actual events performance and results to differ materially.
Tim Lee: They are identified and described in today's press release, in our slide presentation, and under risk factors in our Foreign 10Q for the quarter ended March 31st, 2025, which we will file shortly.
Kevin Green: There are identified and described in today's press release, and our slide presentation and under risk factors in our form.
Kevin Green: In Q4.
Kevin Green: <unk> ended March 31, 2025, which we will file shortly.
Tim Lee: We undertake no duty or obligation to update or or is a new statement.
Kevin Green: <unk> undertakes no duty or obligation to update our forward looking statements.
Tim Lee: On today's call, we will also be discussing our non-GAAP financial measures, including our non-GAAP adjusted EBITDA and non-GAAP constant currency metrics, which exclude the impact of foreign exchange rates. These non-GAAP measures should be considered a supplement to, and not a replacement for, measures presented in accordance with GAAP for a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures Please refer to today's press release and the slide presentation available on our website.
Kevin Green: On today's call. We will also be discussing our non-GAAP financial measures, including our non-GAAP adjusted EBITDA and non-GAAP constant currency metrics, which exclude the impact of foreign exchange rates.
Kevin Green: These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP.
Kevin Green: For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. Please refer to today's press release and the slide presentation available on our website.
Tim Lee: We'll begin today with opening remarks from Obi, followed by Vivek to discuss recent business highlights. and Kevin to review our financial highlights, expectations for the rest of 2025.
Obi: We'll begin today with opening remarks from Obi.
Speaker Change: Paul by this date to discuss recent business highlights and Kevin to review, our financial highlights expectations for the rest of 2025, and lastly closing remarks from Obi.
Tim Lee: And lastly, closing remarks from OB.
Obie Greenman: And now it's my pleasure to introduce Obie Greenman, CERUS' President and Chief Executive Officer. Thank you, Tim, and good afternoon, everyone. I'm very happy to report to you all today the solid position Cerus is in as we continue to grow our global business upon the strong foundation that we have built in establishing a new standard of care in transfusion medicine. During these times of uncertainty in the global financial markets, we are confident in our ability to continue to execute. against our important mission as a company.
Obi Greenman: Now, it's my pleasure to introduce Obi Greenman, <unk>, President and Chief Executive Officer.
Speaker Change: Thank you Tim and good afternoon, everyone.
Speaker Change: I'm very happy to report to you all today the solid position. Sirius is then as we continue to grow our global business. Upon the strong foundation that we have built and establishing a new standard of care in transfusion medicine.
Speaker Change: During these times of uncertainty in the global financial markets. We are confident in our ability to continue to execute against our important mission as a company.
Obie Greenman: Our mission at Cerus has always been to fundamentally transform the safety and availability of transfused blood. and to provide unwavering customer support to deliver safe and effective blood products to patients. Our perseverance continues unabatedly. Our products have treated approximately 20 million intercept units globally, based on the cumulative number of platelet and plasma kits sold. Intercept is now used in over 40 countries and is the standard of care in approximately a third of them.
Speaker Change: Our mission at Cerus has always been to fundamentally transform the safety and availability of transfused blood components.
Speaker Change: To provide unwavering customer support to deliver safe effective blood products to patients.
Speaker Change: Our perseverance continues unabated our.
Speaker Change: Our products have treated approximately $20 million intercept yards globally based on the cumulative number of platelet and plasma kits sold.
Speaker Change: Intercept is now used in over 40 countries and is the standard of care in approximately a third of those countries.
Obie Greenman: In mid-Q1, we received CU Mark for the INT200, our next-generation LED-based illumination device. earlier than expected. This foundational device platform was designed with input and feedback from our global customer base to enhance the usability and efficiency of the service. Initial feedback from our customers has been very positive, and we now look forward to submitting the PMA for the INT200 device to the FDA in 2026 for the planned launch in the U.S. in 2027. We expect that the phased global launch of the new IIT 200, over the course of the next few years, will provide our blood center customers with a reliable platform, which will also enable the future geographic expansion of Intercept through the end of the decade.
Speaker Change: In mid Q1, we received CE Mark for the Iot 200, our next generation led based illumination device.
Speaker Change: Earlier than expected.
Speaker Change: This traditional device platform was designed with input and feedback from our global customer base to enhance the usability and efficiency of the system.
Speaker Change: Initial feedback from our customers has been very positive and we now look forward to submitting the PMA for the Iot to other device to the FDA in 2026 for the planned launch in the U S. In 2027.
Speaker Change: We expect that the phased global launch of the new ICT 100 over the course of the next few years will provide our blood center customers with a reliable platform, which will also enable the future geographic expansion of intercept through the end of the decade.
Obie Greenman: We expect that the effort and expense that went into the development of the IIT 200 will pay dividends for years to come. In the U.S., our core platelet customers continue to be an important driver of top line growth as we look to further expand our platelet market share in line with the hospital demand for 100% pathogen inactivated platelet inventory. In addition, we continue to improve IFC supply to meet growing customer demand, which has been exceeding our ability to supply. These activities, combined with another quarter of solid cross-functional execution, resulted in double-digit revenue growth, and we are reiterating our full-year product revenue guidance range of $194 to $200 million.
Speaker Change: We expect that the effort and expense that went into the development of the AIG 200 will pay dividends for years to come.
Speaker Change: In the U S. Our core platelet customers continue to be an important driver of top line growth as we look to further expand our market share in line with the hospital demand for 100% pathogen activated platelet inventory.
Speaker Change: In addition, we continue to improve IFC supply to meet growing customer demand, which has been exceeding our ability to supply.
Speaker Change: These activities combined with another quarter of solid cross functional execution resulted in double digit revenue growth and we are reiterating our full year product revenue guidance range of $194 million to $200 million.
Obie Greenman: Vivek will provide additional color on our commercial performance and is prepared to mark. Regarding the Intercept Red Blood Cell Program, we continue to work closely with TUV SUD, our notified body. I'm happy to report that in mid-April, we submitted our updated CE Mark application for the Intercept Red Blood Cell System to TUV, and the review has begun. The enhanced submission includes updated documentation from our positive phase three recipe study and additional data accumulated since our original. Leveraging the feedback from both the notified body and competent authority review from the initial submission, and integrating the new clinical data for Recipe into a new submission over less than a couple of quarters was a coordinated team effort.
Speaker Change: The bank will provide additional color on our commercial performance in his prepared remarks.
Speaker Change: Regarding the intercept red blood cell program, we continue to work closely with <unk>, our notified body I'm.
Speaker Change: Im happy to report that in mid April we submitted our updated CE Mark application for the intercept red blood cell system to <unk> and the review has begun.
Speaker Change: The enhanced submission includes updated documentation from our positive phase III recipe study and additional data accumulated since our original pilot.
Speaker Change: Leveraging the feedback from both the notified body and competent authority review from the initial submission and integrated a new clinical data for recipe into a new submission over less than a couple of quarters was a coordinated team effort.
Obie Greenman: And I want to thank the cross-functional team at Cerus for all of their hard work. At CUV completes its review of the various modules of this submission over the coming months, including the updated and more comprehensive clinical module.
Speaker Change: Thank the cross functional team at Cerus for all of their hard work.
Speaker Change: <unk> completes its review of the various modules of the submission over the coming months, including the updated and more comprehensive clinical module. We look forward to updating you on our application on our Q2 earnings call.
Obie Greenman: We look forward to updating you on our application on our Q2 earnings.
Obie Greenman: Turning to our U.S. red cell development program, the second phase three study called REDIS is getting the U.S. PMA submission pathway. Since commencing the study in 2019 on the back of the Zika virus epidemic and navigating the challenges of study enrollment during the COVID pandemic, We have enrolled more than 500 patients in the study today. Enrollment continues and we expect to enroll the last patient in the second half of this year.
Speaker Change: Turning to our U S Red cell development program. The second Phase III study called Red is getting the U S PMA submission pathway.
Speaker Change: Since commencing the study in 2019 on the back of the Zika virus epidemic and navigating the challenges of study enrollment during the Covid pandemic, we have enrolled more than 500 patients in the study to date.
Speaker Change: Enrollment continues and we expect to enroll the last patient in the second half of this year.
Obie Greenman: Switching to our financials, we are off to a strong start in our building upon last year's achievement of positive, non-gap adjusted IPPQA for the full year. With the financial markets consumed by concerns about the impact of global tariffs on company operating We believe we are in a unique and enviable position to continue to selectively invest in many key initiatives during 2025, while maintaining our goal to once again achieve positive non-gap-adjusted impact.
Speaker Change: Switching to our financials, we are off to a strong start and are building upon last year's achievement of positive non-GAAP adjusted EBITDA for the full year.
Speaker Change: With the financial markets consumed by concerns about the impact of global tariffs on company operating plans. We believe we are in a unique and enviable position to continue to selectively invest in many key initiatives during 2025, while maintaining our goal to once again achieved positive non-GAAP adjusted EBITDA.
Obie Greenman: Kevin will provide additional details in his prepared remarks.
Kevin Green: Kevin will provide additional details in his prepared remarks I.
Vivek Jayaraman: I would like now to turn the call over to Vivek to discuss our first quarter commercial results along with color on our outlook for 2020. Thank you, Obie, and good afternoon, everyone. As Obi stated, we delivered another solid quarter of operating performance in Q1. Our double-digit year-over-year growth was the result of strength across our global. Building off a strong 2024, we continue to see uptick in our U.S. ISD franchise and solid performance in our U.S. and global playlists. The earlier than expected approval of the INT200 device provided another tailwind and allowed us to substantively demonstrate our commitment to innovation in the.
Kevin Green: I would like now to turn the call over to Greg to discuss our first quarter commercial results along with color on our outlook for 2025.
Greg: Thank you Obi and good afternoon, everyone.
Greg: And <unk> stated we delivered another solid quarter of operating performance in Q1 25.
Greg: Double digit year over year growth was the result of strength across our global franchise.
Building off a strong 2024, we continue to see uptick in our U S ICD franchise.
Greg: Solid performance in our U S and global platelet market.
The earlier than expected approval of the 200 device.
Greg: Another tailwind and allowed us to substantively demonstrate our commitment to innovation in this market.
Vivek Jayaraman: As mentioned, the INC200 was a product designed with feedback from our Blood Center customers. and is intended to improve their operations and enhance their.
Greg: As mentioned the <unk> hundred what the chronic design with feedback from our blood center customers and is intended to improve their operations enhance their experience.
Vivek Jayaraman: Our designed with you for you tagline is really resonating and the initial feedback on the device is very While there is a lot of geopolitical and macroeconomic uncertainty, it is worth noting that our business is in a very I feel confident that our experienced team is capable of navigating through any challenges and positioning us to deliver on our mission and expand access to safe. The main reason I am.
Greg: Our designed with you for Ya tagline is really resonating and the initial feedback on the debate very positive.
Greg: While there is a lot of geopolitical and macroeconomic uncertainty it is worth noting that our business is in a very solid position.
Greg: Feel confident that our experienced team is capable of navigating through any challenges and positioning us to deliver on our mission and expand access to safe blood products.
Greg: The main reason I am confident in our ability to drive continued growth despite potential endogenous shock is that the value proposition for intercept remains as compelling as ever.
Unknown Attendee: Unknown Attendee, As a reminder, platelets treated with intercept flood systems offers multiple advantages over conventional platelets, including, one, intercept platelets reduce the risk of transfusion transmitted infection with patching reduction of a broad spectrum of bacteria, viruses, protozoans, and 2. Intercept platelets allow for extended shelf life in select international countries. seven days storage compared to five days for untreated platelets. thereby reducing waste. 3. Intercept platelets also allow blood components to be available sooner, resulting in fresher platelets that may be transfused to patients. And four, intercept platelets confer economic and operational efficiencies and flexibility through streamlined inventory management.
Greg: As a reminder, platelets treated with intercept blood system offers multiple advantages over conventional platelets, including.
Greg: One intercept platelets reduced the risk of transfusion transmitted infections with pathogen reduction of a broad spectrum of bacteria.
Greg: Irises protozoan and looked at site.
Greg: Two.
Greg: Intercept platelets allow for extended shelf life inflect international countries to seven data storage compared to five days for untreated platelet.
Greg: Thereby reducing wastage three.
Greg: <unk>.
Greg: Intercept platelets also allow blood component to be available sooner.
Greg: <unk> and fresher platelets that may be transfused patients and.
Greg: For intercept platelets and for economic and operational efficiencies and flexibility through streamline inventory management.
Vivek Jayaraman: Intercept treated platelets can be transfused to any While conventional platelets may require additional measures depending on the underlying Intercept platelets are now the standard of care in many countries around the world, and we see continued growth in this franchise globally.
Greg: Intercept treated platelets can be transfused any patients while conventional platelets may require additional measures depending on the underlying condition.
Greg: Intercept platelets are now the standard of care in many countries around the world and we see continued growth in this franchise globally.
Vivek Jayaraman: Returning to our first quarter 2025 results, product revenue growth was led by robust North American platelet where we saw increasing demand both in the U.S. Switching to international markets, the earlier than expected receipt of the CE mark for IET200 gives our field organization another great reason to re-engage current customers and reach out to new ones.
Greg: Returning to our first quarter 2025 results product revenue growth was led by robust North American platelet kit sales, where we saw increasing demand both in the U S and Canada.
Switching to international markets the earlier than expected receipt of the CE Mark for <unk> 200 gives our field organization. Another great reason to Reengage current customers and reach out to new.
Vivek Jayaraman: We anticipate that the next generation LED based illumination device may enhance Cerus' brand and reputation for delivering a reliable, innovative technology platform. moving beyond our current. We continue to have active discussions with blood donors and new and largely unpenetrated. Collectively, these geographies represent nearly 5 million platelet units. While it is premature to predict when these discussions may materialize into sales, we are more encouraged than ever especially considering the number of countries that have now adopted Intercept as a frontline strategy to improve platelets.
Greg: We anticipate that the next generation led based illumination device main answers to this brand and reputation for delivering a reliable innovative technology platform.
Greg: Moving beyond our current customer base, we continue to have active discussions with blood centers, new and largely underpenetrated geographies.
Greg: Collectively these geographies represent nearly 5 million platelet units annually.
Greg: It's premature to predict when these discussions may materialize into sales.
Greg: We are more encouraged than ever.
Greg: Lastly, considering the number of countries that have now adopted intercept as a frontline strategy to improve platelet safety.
Vivek Jayaraman: Switching gears to ISD, customer demand continues to grow. Five-Day Post-Saw Shelf Life of ISD allows for transfusion services at hospitals to keep prepared units on hand to streamline that. The potential for shorter turnaround times from physician request to patient transfusion appears to be hitting a responsive chord with clinic. Furthermore, the reduction in wastage and potential for faster OR turnaround times are attributes that really resonate with non-clinical decision makers in the hospital. We are actively working with our blood bank partners to improve availability to ISD, and we expect supply to ramp up monthly through the balance of 2020.
Greg: Switching gears to ISP customer demand continues to grow.
Greg: The five day shelf life of mine.
Greg: Allowance for transfusion services and hospitals to key prepared units on hand to streamline that orders.
Greg: The potential for shorter turnaround times from physician request to patient transportation appears to be hitting a responsive chord with clinicians.
Greg: Furthermore, the reduction and wastage and potential for faster turnaround times are attribute that really resonate with non clinical decision makers in the hospital.
Greg: We are actively working with our blood bank partners to improve the availability to IFC.
Greg: And we expect to apply to ramp up monthly through the balance of 2025.
Kevin Green: With that, I will turn it over to Kevin to discuss our financial results and outlook in more detail. Thanks, Vivek, and hello to everyone listening today. Thank you for your time and your interest in CIRA. On today's call, I'll be discussing our financial results for the first quarter of 2025, as well as our product revenue guidance for the future. Finally, I'll highlight some of the key success factors that we are focused on as we move forward, building off of 2024 solid momentum. For the first quarter of 2025, we reported product revenue of $43.2 million. A 13% increase and at the midpoint of the 10 to 15% guidance we provided in January.
Greg: With that I will turn it over to Kevin to discuss our financial results and outlook in more detail.
Kevin Green: Thanks, <unk> and Hello to everyone listening today. Thank you for your time and your interest in Cerus.
Kevin Green: On today's call I'll be discussing our financial results for the first quarter of 2025 as well as our product revenue guidance for the year.
Kevin Green: Finally, I'll highlight some of the key success factors that we are focused on as we move forward building off of 2024 solid momentum.
Kevin Green: For the first quarter of 2025, we reported product revenue of $43 2 million or <unk>.
Kevin Green: 13% increase at the midpoint of the 10% to 15% guidance we provided in January.
Kevin Green: Higher North American Platelets. along with increasing U.S. demand for IFC were the principal drivers of growth this First quarter North American product revenues increased 22% compared to the same period from the prior year. In EMEA, first quarter product revenue declined 4% on an as-reported basis. compared to the same period last year. excluding the impact of foreign currency exchange rates. EMEA product sales declined 1% on a non-gap basis year over year. Moving beyond our platelet and plasma franchise. For the first quarter of 2025, U.S. IFC sales totaled $3 million, compared to $1.9 million during the first quarter of 2024.
Kevin Green: Are your North American platelet sales.
Kevin Green: Along with increasing U S demand for IFC were the principal drivers of growth this quarter.
Kevin Green: First quarter, North American product revenues increased 22% compared to the same period from the prior year.
Kevin Green: In EMEA first quarter product revenue declined 4% on an as reported basis compared to the same period last year.
Kevin Green: Excluding the impact of foreign currency exchange rates.
Kevin Green: EMEA product sales declined 1% on a non-GAAP basis year over year.
Kevin Green: Moving beyond our platelet and plasma franchise.
Kevin Green: For the first quarter of 2025 U S. IFC sales totaled $3 million compared to $1 9 million during the first quarter of 2024.
Kevin Green: IFC sales growth was driven by continued strong customer demand from both our direct hospital channel and as blood centers satisfied demand for their own hospital customers. Looking ahead to the balance of this year. based on the robust first quarter performance. Coupled with the growing demand for both our platelet and IFC product lines, we are reiterating our full year 2025 product revenue guidance range of $194 to $200 million, which includes expected IFC revenue contribution of $12 to $15 million. Beyond product revenue, and not included in our guidance, government contract revenue for the first quarter of 2025 was $5.6 million, compared to $5 million for the prior year period.
Kevin Green: IFC sales growth was driven by continued strong customer demand from both our direct hospital channel.
Kevin Green: And as blood center satisfy demand for their own hospital customers.
Kevin Green: Looking ahead to the balance of this year.
Kevin Green: Just on the robust first quarter performance, coupled with the growing demand for both our platelet and IFC product lines. We are reiterating our full year 2025 product revenue guidance range of $194 million to $200 million.
Kevin Green: Which includes expected IFC revenue contribution of $12 million to $15 million.
Kevin Green: Beyond product revenue are not included in our guidance.
Kevin Green: Government contract revenue for the first quarter of 2025 was $5 6 million compared.
Kevin Green: Compared to $5 million for the prior year period.
Kevin Green: Increasing enrollment in Redis contributed to the year-over-year increase in government contract revenue, as did certain nascent activities under the recently awarded 2024 BARDA contract. We remain actively engaged with BARDA and expect to continue successfully delivering on our contracts with the federal government. Advancing patient access to safe blood. First quarter, Product Gross Profit was $25.4 million. up from $21.3 million for the same period of the prior year. An increase of 20%. Product gross margins for the first quarter were 58.8% compared to 55.4% for the first quarter of 2024. Much of the year-over-year increase in gross margin was due to the combined effects of the capitalization of inventoriable charges and the non-recurring release of previously accounted for favorable variances during the first quarter of 2025.
Kevin Green: Increasing enrollment in <unk> contributed to the year over year increase in government contract revenue.
Kevin Green: Youre asking certain nascent activities under the recently awarded 2020 for BARDA contract.
Kevin Green: We remain actively engaged with BARDA and expect to continue successfully delivering on our contracts with the federal government <unk>.
Kevin Green: Advancing patient access to safe blood components.
Kevin Green: First quarter product gross profit was $25 $4 million.
Kevin Green: Up from $21 3 million for the same period of the prior year.
Kevin Green: An increase of 20%.
Kevin Green: Product gross margins for the first quarter were 58, 8%.
Kevin Green: Impaired to 55, 4% for the first quarter of 2024.
Kevin Green: Much of the year over year increase in gross margin was due to the combined effects of the capitalization of inventory of old charges.
Kevin Green: And the nonrecurring release of previously accounted for favorable variances during the first quarter of 2025.
Kevin Green: without the impact of these accounting adjustments. For the balance of 2025, we expect product gross margins to generally remain in the mid-50s. with potential variability in any given quarter. Factors that could drive quarterly variability include, but are not limited to, FX rates, product mix, production cost of IFC to meet increasing demand. Economy to Scale and Production Volumes, and the Timing of COGS Reduction Initiatives Coming Online. Beyond these normal variables, I'd like to take a moment to address the potential impact of the current tariffs without trying to anticipate what future tariffs will ultimately be in place.
Kevin Green: Without the impact of these accounting adjustments for.
Kevin Green: For the balance of 2025, we expect product gross margins to generally remain in the mid fifties with potential variability in any given quarter.
Kevin Green: Factors that could drive quarterly variability include but are not limited to <unk>.
Kevin Green: <unk> rates.
Kevin Green: <unk> mix.
Kevin Green: <unk> cost of IFC to meet increasing demand.
Kevin Green: The economies of scale in production volumes and the timing of Cogs reduction initiatives coming online.
Kevin Green: Beyond these normal variables I'd like to take a moment to address the potential impact of the current tariffs without trying to anticipate what future tariffs will ultimately be in place.
Kevin Green: at the current enacted global tariff landscape and without any potential offset, which we may pursue. We expect that our consolidated gross margins would be modestly impacted, but remain north of 50%.
Kevin Green: At the current enacted global tariff landscape.
Kevin Green: Any potential offset which we may pursue.
Kevin Green: We expect that our consolidated gross margins would be modestly impacted but remain north of 50%.
Kevin Green: Let's move below gross profit on the P&L. Operating expenses for the first quarter totaled $36.9 million compared to $34.3 million for Q1 of 2024. This increase reflects the elevated activities driving government contract revenue, advancement of our LED illumination device globally, and cost of living adjustments for our employee base. First quarter 2025 operating expenses included $6.6 million in non-cash stock-based compensation. R&D expenses for the first quarter totaled $16.6 million compared to $14.5 million during the prior year. The year-over-year increase in R&D expenses was primarily related to higher development costs of INT200. Higher government contract costs, which in turn drove the increased government contract revenue.
Kevin Green: So let's move below gross profit on the P&L.
Kevin Green: Operating expenses for the first quarter totaled $36 9 million compared to $34 3 million for Q1 of 2024.
Kevin Green: This increase reflects the elevated activities driving government contract revenue.
Kevin Green: The advancement of our led illumination device globally.
Kevin Green: And cost of living adjustments for our employee base.
Kevin Green: First quarter 2025 operating expenses included $6 6 million of noncash stock based compensation.
Kevin Green: R&D expenses for the first quarter totaled $16 6 million.
Kevin Green: Compared to $14 5 million during the prior year.
Kevin Green: The year over year increase in R&D expenses was primarily related to higher development costs of <unk> 200.
Kevin Green: Higher government contract costs, which in turn drove the increased government contract revenue.
Kevin Green: and modestly higher employee-related expenses due to cost of living adjustment. which we had contemplated going into these. SG&A expenses for the first quarter were $20.3 million. compared to $19.8 million in Q1 2024. The year-over-year increase in SG&A expenses reflect modestly higher employee-related expenses, which we had also anticipated. As we look ahead to the balance of 2025, by and large, we expect that SG&A expenses will resemble Q1 levels, but may be slightly higher due to the realization of full quarter impact from the cost of living adjustments enacted during Q1. With that said, we expect to continue delivering compelling leverage from our SG&A spend relative to the anticipated revenue growth implied by our product revenue guidance.
Kevin Green: And modestly higher employee related expenses due to cost of living adjustments, which we had contemplated going into the year.
Kevin Green: SG&A expenses for the first quarter were $20 3 million.
Kevin Green: Compared to $19 8 million in Q1 2024.
Kevin Green: The year over year increase in SG&A expenses reflect modestly higher employee related expenses, which we had also anticipated.
Kevin Green: As we look ahead to the balance of 2025.
Kevin Green: By and large we expect that SG&A expenses will resemble Q1 levels, but may be slightly higher due to the realization of full quarter impact from the cost of living adjustments enacted during Q1.
Kevin Green: With that said, we expect to continue delivering compelling leverage from our SG&A spend relative to the anticipated revenue growth implied by our product revenue guidance.
Kevin Green: Shifting our focus to the bottom line and non-gap-adjusted EBITDA results. On the bottom line, for Q1 2025, net loss attributable to Cerus was $7.7 million, or $0.04 per share, compared to a net loss of $9.7 million, or $0.05 per share for the prior year. These results represent a 20% improvement from Q1 of last year. Furthermore, expanding on the financial foundation we established in 2024. We are pleased to announce our fourth straight quarter of positive adjusted EBITDA, totaling $157,000 for the first quarter of 2025, compared to a negative $2.7 million for the prior year period. To elaborate on my earlier comments regarding the potential impact from the currently imposed tariffs, I want to be clear.
Kevin Green: Shifting our focus to the bottom line and non-GAAP adjusted EBITDA results.
Kevin Green: On the bottom line for Q1 2025 net loss attributable to <unk> was $7 7 million.
Kevin Green: Or <unk> <unk> per share compared to a net loss of $9 7 million or <unk> <unk> per share for the prior year period.
Kevin Green: These results represent a 20% improvement from Q1 of last year.
Kevin Green: Furthermore, expanding on the financial Foundation, we established in 2024.
Kevin Green: We are pleased to announce our fourth straight quarter of positive adjusted EBITDA totaling $157000 for the first quarter of 2025 compared to a negative $2 7 million for the prior year period.
Kevin Green: To elaborate on my earlier comments regarding the potential impact from the currently imposed tariffs I want to be clear.
Kevin Green: We remain resolute in our goal of achieving full year positive adjusted EBITDA results. Assuming existing tariffs remain in place. and the U.S. or any other government does not introduce new or increased.
Kevin Green: We remain resolute in our goal of achieving full year positive adjusted EBITDA results.
Kevin Green: Assuming existing tariffs remain in place.
Kevin Green: In the U S or any other government does not introduce new or increased tariffs.
Kevin Green: Focusing in on the balance sheet and associated cash flows, we ended the first quarter of 2025 with $80.9 million of cash, cash equivalents, and short-term investments on hand, compared to $80.5 million at the end of 2024. Cash use from operations was minimal at $800,000 compared to cash generated of $2 million during the same period of the prior year. Cash used during the first quarter of 2025 was primarily tied to investment in working capital, namely inventory in anticipation of expected commercial growth. Looking ahead, based on the revenue growth implied by our guidance. Our Commitment to Achieving Positive Adjusted Evita Results.
Kevin Green: Focusing in on the balance sheet and associated cash flows. We ended the first quarter of 2025 with $80 9 million of cash cash equivalents and short term investments on hand compared to $85 million at the end of 2024.
Kevin Green: Cash used from operations was minimal at $800000 compared to cash generated of $2 million during the same period of the prior year.
Kevin Green: Cash used during the first quarter of 2025 was primarily tied to investment in working capital.
Namely inventory.
Kevin Green: <unk> patients have expected commercial growth.
Kevin Green: Looking ahead based on the revenue growth implied by our guidance <unk>.
Kevin Green: Our commitment to achieving positive adjusted EBITDA results.
Kevin Green: and Investments in Working Capital, we believe we are in a position to deliver annual positive operating cash flow to fuel our growth going forward.
Kevin Green: And investments in working capital. We believe we are in a position to deliver annual positive operating cash flow to fuel our growth going forward.
Obie Greenman: Furthermore, we expect to have increasing access to our revolving lender credit should we choose to further use that facility and offset receivable or inventory related working capital and For more information visit www.FEMA.gov With that, let me turn it back over to Obi for some closing remarks. Thanks, Kevin. The Cirus business and mission has benefited and will continue to benefit from the solid technology and customer focused foundation that we have. With early feedback from our European launch of our new LED IIT 200 device being so positive, we are increasingly excited about the expected broader geographic expansion that that enables, and ultimately launching the device in the U.S.
Kevin Green: Furthermore, we expect to have increasing access to our revolving line of credit should we choose to further use that facility can offset.
Kevin Green: Receivable or inventory related working capital investments.
Obi Greenman: With that let me turn it back over to Obi for some closing remarks.
Obi Greenman: Thanks, Kevin.
Obi Greenman: The <unk> business and mission has benefited and will continue to benefit from the solid technology and customer focused foundation that we've built.
Obi Greenman: With the early feedback from our European launch of our new <unk> led <unk> hundred device being so positive.
Obi Greenman: We're increasingly excited about the expected broader geographic expansion, but that enables and ultimately launching the device in the U S. Subsequent to expected PMA approval.
Obie Greenman: subsequent to expected PMA. Cerus remains singularly focused on helping blood centers around the world to improve the safety and availability of the blood. and to innovate with their blood product offering so as to improve their economics, operational efficiencies and sustainability. To this end, we believe our continued investments in both our supply chain and in securing global regulatory approvals for our complete Intercept product portfolio will yield value for the long term. We remain resolute in this mission to transform the field of transfusion medicine in partnership with our blood center customers. so that there is increased resiliency in getting safe blood to patients timely.
Obi Greenman: Cirrus remains singularly focused on helping blood centers around the world to improve the safety and availability of the blood supply.
Obi Greenman: And to innovate with their blood product offering so as to improve their economics operational efficiencies and sustainability.
Obi Greenman: To this end, we believe our continued investments in both our supply chain and in securing global regulatory approvals for our complete intercept product portfolio will yield value for the long term.
Obi Greenman: We remain resolute in this mission to transform the field of transfusion medicine in partnership with our Blood center customers. So that there is increased resiliency and getting safe blood of patients timely.
Obie Greenman: In summary, I'd like to thank the CERUS team for their unwavering focus to secure blood safety around the globe, as well as their continued dedication and determination. As such, we started 2025 with double-digit product revenue growth. Our development program milestones were realized earlier than expected, and our financials are stronger than ever.
Obi Greenman: In summary, I'd like to thank the <unk> team for their unwavering focus to secure blood safety around the globe as well as their continued dedication and determination.
Obi Greenman: As such we started 2025 with double digit product revenue growth.
Obi Greenman: Our development program milestones were realized earlier than expected.
Obi Greenman: Our financials are stronger than ever.
Operator: For that operator, we'll open up the call for Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions.
Obi Greenman: With that operator, we will open up the call for questions.
Obi Greenman: Thank you.
Obi Greenman: <unk> to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.
Joshua Jennings: Our first question comes from Josh Jennings with T.D. Cowan, you may proceed. Hi, good afternoon. Thanks for taking the questions and congratulations on a strong start to the year. I was hoping to just dig a little bit deeper into the 2020, the 22% growth in the North American product revenue in Q1, and maybe just help us sort of highlight the drivers there, maybe break down between Canada and the U.S. and really wanted to hear about the U.S. intercept platelet, more details on the U.S. intercept platelet revenue growth.
Speaker Change: Our first question comes from Josh Jennings with TD Cowen You May proceed.
Speaker Change: Hi, good afternoon. Thanks for taking my question congratulation on strong parts of the year.
Speaker Change: And to just dig a little bit deeper into the 2020.
Speaker Change: 22% growth in the North American product revenue in Q1, and maybe just help us.
Speaker Change: Highlight the drivers there maybe break that between Canada U S.
Speaker Change: But I wanted to hear about the us quite some more details.
Speaker Change: Platelet.
Vivek Jayaraman: Yeah, thanks for the question, Josh and Vivek, I think you're best placed to answer that question. Yeah, I'd be happy to. Josh, thanks for the call and the kind words about the quarter. You know, as we had indicated exiting last year, we saw a lot of underlying. Demand and growth in our US franchise, both on the platelet and ISC side, and that continued. As reflected in our Q1 results, while we are already standard of care in the US, there are continuing to be opportunities to capture share and we saw a nice. Progress there, that's certainly buffeted by the continued validation in terms of real world experience with intercept in Canada.
Speaker Change: Incredible.
Speaker Change: Yes. Thanks for the question Josh in the Bank I think you are best placed to answer that question.
Josh Jennings: Yes, I'd be happy to chat Josh Thanks for the call and the kind words about the quarter.
Josh Jennings: Had indicated exiting last year, we saw a lot of underlying demand and growth in our U S franchise on the platelet and IFC side and that continues.
Josh Jennings: In our Q1 results.
Josh Jennings: While we are already standard of care in the U S. There are continuing opportunities to capture share and we saw a nice.
Josh Jennings: They're certainly buffeted by the continued validation in terms of real world experience with intercept and Canada. We benefited now CBS is fully implemented with IFC and rapidly turning we're continuing the validation process with him back and so that.
Vivek Jayaraman: We benefited. You know, now CBS is fully implemented with ISC and we're actually starting the, we're continuing the validation process with him in Quebec. And so the growth was predominantly in the US, but we certainly had the benefit from Canada. And then on the ISC side, as we transition to the kit model, we see continued demand from hospitals, continued positive experience when clinicians are using it in their practice. And we were really focused as we talked about last year, in terms of ramping demand and product ramping supply and production volume from our supply partners continues to grow.
Josh Jennings: Both with predominantly in the U S. But we certainly had the benefit from Canada and then on the IFC side as we transition to the model. We see continued demand from hospital continued positive experience.
Josh Jennings: Clinicians are using it in their practice and we were really focused as we talked about exiting last year in terms of ramping demand in product preceding ramping supply.
Josh Jennings: Production volume from our supply partners continues to grow so.
Vivek Jayaraman: So we feel good about how we started the year in the US. And we feel confident about our ability to continue to see growth across both of our franchises in North America here on a going forward basis.
Josh Jennings: Feel good about how we started the year in the U S.
Josh Jennings: Feel good about our ability to continue to see growth across both of our franchises in North America here on a going forward basis.
Vivek Jayaraman: Yeah, just, Josh, as a point of clarification, when Vivek was talking about CBS and 100% adoption, that was for playlists, just to be clear. That's correct. Yeah. Thank you. Great. Thanks for that.
Speaker Change: Yes, Josh I just wanted a clarification that you were talking about CBS in 100% adoption of that was for platelets just to be clear that's correct yep. Thank you.
Josh Jennings: Great Thanks for that.
Joshua Jennings: I know there's there's hard to make calls on on regulators timelines, but just it's great to see the CMARC application for interceptor blood cell system in and was just wondering, I mean, many could just Outlining a little bit more detail, just the next steps in terms of interactions with the notified body and what would you expect, what should ventures be looking out for in terms of milestones as we move forward during the European regulatory process from here. Thanks for taking the question. Yeah, thanks a lot, Josh.
Speaker Change: I know there's.
Speaker Change: Hard to make calls on regulators timelines, but just it's great to see the CE Mark application for intercept red blood cell system.
Speaker Change: And I.
Speaker Change: I was just wondering.
Speaker Change: Maybe you could just.
Speaker Change: A little more detail just the next steps in terms of interactions with the notified body.
Speaker Change: What would you would expect.
Speaker Change: What should investors be looking out for in terms of milestones as we move forward trend that European regulatory process from here. Thanks for taking the questions.
Obie Greenman: And Carol's on the call, so she can address this in a little bit more detail. But just to start, you know, we were really excited to get that back in. We do believe that there's a lot of leverage that can be gained from the previous submission review, both with the competent authority and notified body.
Speaker Change: Yes, Thanks, a lot Josh and carol's on the call. So she cannot address this a little bit more detail, but just to start we were.
Speaker Change: We are excited to get that back in we do believe that there is a lot of levers that can be gained from the previous submission review.
Carol Moore: But, you know, as far as next steps and how this proceeds with the TUV, Carol, do you mind elaborating a little bit? Sure. Thanks for the question. We're delighted to have refiled, and the TUV is working very closely with us, as they always have been. And we've been working on a very appropriate schedule for the fact that they were very familiar with the file. So, TUV initiates the review, that's the notified body, and they conduct the clinical review first, and then they will be ready to move it on to the competent authority. So, it's the dual arrangement of review as we had before.
Speaker Change: Both with the competent authority and notified body.
Speaker Change: As far as next steps and how this proceeds with TV Carol you might elaborate a little bit.
Speaker Change: Thanks for the question.
Delighted to have re filed and the team is working very closely with us as they always have been and we've been working on a very.
Speaker Change: Appropriate schedule for the fact that they were very familiar with the files. So.
Speaker Change: <unk> initiated the review that the notified body and they conduct a clinical review first and then they.
Speaker Change: Yes.
It will be ready to move it onto the competent authorities. So there's that.
Speaker Change: The duo arrangement of review as we had before and I think we feel very good about the communication, we're having with <unk> and the application itself.
Joshua Jennings: And I think we feel very good about the communications we're having with TUV and the application itself. It's very strong as it was before, and I think we're in a good position to keep it moving. Great, thanks so much.
Speaker Change: It is very strong as it was before and I think we're in a good position to keep it moving.
Speaker Change: Great. Thanks, so much.
Josh Jennings: Great. Thanks, Josh.
Matt Park: Our next question comes from Ross Osborn with Cantor Rich Gerald. You may proceed. Hey guys, this is Matt Park on for Ross today. Thanks for taking the question. I guess just wanted to start on the EMEA business. Can you give us an update on the France platelet business specifically? Are you seeing continued stability in the region? And how does it compare to other EMEA markets where FX appears to be a headwind? Yeah, thanks for the question, Matt.
Speaker Change: Our next question comes from Ross <unk> with Cantor Fitzgerald you May proceed.
Speaker Change: Hey, guys. This is Matt Park on for Ross today, Thanks for taking the questions I guess just wanted to start on the EMEA business.
Can you give us an update on the France platelet business, specifically are you seeing continued stability in the region and how.
Speaker Change: How does it compare to other EMEA markets were.
Speaker Change: <unk> appears to be a headwind.
Speaker Change: Yes, thanks for the question Matt.
Vivek Jayaraman: Vivek, again, would you mind covering this? Yeah, no problem. So, as you know, in France, we enjoy 100% of the platelet market with our partnership with the EFS. We have seen donations stabilize in the region. And so that business continues to be a strong contributor, and their experience with Intercept is quite positive, and that's borne out by the human vigilance data that they track. So, things in France are going well. We are initiating activity on the plasma side there as well. And then across EMEA, you know, we really view that business as strengthening over the course of the year.
Speaker Change: This.
Speaker Change: Yeah, no problem, so as you know in France.
Speaker Change: We enjoy 100% of the platelet market with our partnership with it yes.
Speaker Change: We had seen donation stabilized in the region and so that business continues to be a strong contributor and their experience with intercept.
Speaker Change: It is quite positive and thats borne out by the individual instead of the thing that they track so.
Speaker Change: Things in France are going well, we are initiating activity on the plasma side, there as well and then across EMEA.
Speaker Change: We really view that businesses strengthening over the course of the year. It will be a driver in terms of our overall forecast the double digit growth on the top line and.
Vivek Jayaraman: It'll be a driver in terms of our overall forecasted double-digit growth on the top line. And, you know, at least at this point, we have not heard anything about a decrease in donations, and frankly, the clinical value of SafeBlood and our technology continues to be validated. So, we're encouraged about our international process.
Speaker Change: At least at this point we have.
Speaker Change: Not heard anything about that decrease in donations and frankly, the clinical value of safe blood and our technology continues to be validated. So we're encouraged about our international prospects.
Matt Park: Got it. That's helpful.
Speaker Change: Got it that's helpful. And then just one more on IFC.
Matt Park: And then just one more on IFC. You guys talked about how you expect supply to ramp up in the balance of 25.
Speaker Change: You guys talked about how you expect supply to ramp up in the balance of 25 can you just walk us through your plans to increase production capacity to meet growing demand. Thanks for taking the questions.
Vivek Jayaraman: Can you just walk us through your plans to increase production capacity to meet growing demand? Thanks for taking the question. Yeah, thanks, Matt. Sure, yeah, happy, happy to highlight that. You know, as we indicated exiting last year, a few of our blood center production partners and IFCV manufacturers had received their biologic license application approval. So that enabled them to transfer products across state lines. And that way, hospitals in-state that expressed demand for ISV, but didn't have an in-state manufacturer could start to get product. And upon securing those DLAs, it was their intention to ramp manufacturing.
Speaker Change: Yes, Thanks, Matt.
Speaker Change: Sure Yeah happy happy to.
Speaker Change: Highlight that as we indicated exiting last year.
Speaker Change: A few of our blood center production partner than it is the manufacturers had received their biologic license application approval, so that enabled them to transfer products across state lines.
Speaker Change: And that way hospitals in states that expressed demand for IFC, but didn't have an in-state manufacturer could start to get product and upon securing those BLA is their intention to ramp manufacturing and so we really saw that ramp up in manufacturing start to come to fruition in the first quarter of this year.
Vivek Jayaraman: And so we really saw that ramp up in manufacturing start to come to fruition in the first quarter of this year. And those blood centers are not anywhere near capacity in terms of their manufacturing volume. So with each passing week, this calendar year, we see an increased amount of volume in terms of produced product. And the great thing about that is we've cued up quite a bit of clinical demand to consume that product. So we anticipate that evolving over the course of this calendar year. Seven of the eight production partners we have now have been issued DLAs.
Speaker Change: Blood centers are.
Speaker Change: Not anywhere near capacity and in terms of their manufacturing volume.
Speaker Change: With each passing week this calendar year, we see an increase.
Speaker Change: On a volume in terms of produced product and the great thing about that is we queued up quite a bit of clinical demand to consume that product. So we anticipate that evolving over the course of this calendar year.
Speaker Change: Seven of the eight production partners, we have now been issued BLA as the other has won an application and in parallel we've received de novo interests from a number of blood centers to initiate IFC production, because they're getting queries from their hospital customers requesting isds, so really really starting to see momentum in this.
Vivek Jayaraman: The other has one in application. And in parallel, we've received de novo interest from a number of blood centers to initiate IFC production because they're getting queries from their hospital customers requesting ISV. So we're really starting to see momentum in this business start to take shape.
Speaker Change: This business start to take shape.
Speaker Change: Thank you.
Mark Massaro: Our next question comes from Mark Massaro with BTIG. You may proceed. Hey folks, this is Vidyun. I'm from EARC. Thanks for taking the questions.
Speaker Change: Our next question comes from Mark Massaro with BTG you May proceed.
Nicholas: Nicholas This is sticking on for Mark Thanks for taking the questions.
Vidyun Bais: Um, to start off, could you just talk through some of the assumptions in your guidance? It seems like on the ISD front, there's just a little bit of a ramp required in the back half. And then more broadly, does the guide also contemplate any revenue from the next gen illuminator lots? Yeah, thanks for the question, Vidyun. Vivek, the questions are all yours today, apparently. You mind handling that? Sure, yeah, happy to weigh in. So, I'll start with the second half of your question first. So, we had initially anticipated the INT200 CE mark clearance in the middle of the year.
Nicholas: Charles could you talk through some of the assumptions in your guidance it seems like on the IFC front.
Nicholas: There's just a little bit of a ramp up quiet in the back half and then more broadly just the guide also contemplate any revenue from the nextgen eliminate that much.
Vivien: Yes, thanks for the question Vivien.
Nicholas: The question is are all yesterday, apparently so.
Nicholas: Sure Yeah happy to.
Nicholas: Peter.
Land so.
Speaker Change: I'll start with the second half of your question first so we had initially anticipated the IMT 200, CE Mark clearance in the middle of the year so securing it.
Vivek Jayaraman: So, securing it in Q1 was fantastic news. And I just want to say thank you to my colleagues in our regulatory clinical quality groups, all of whom, development, of course, all of them who really did the heavy lifting to get that approval and that product across the finish line. Initial customer feedback has been excellent and it's sort of validation to our customers that we're committed to continue to innovate in this space. So, it gives us a chance to engage new customers and also re-engage existing customers with new technology, which always excites them. So, getting that a bit earlier certainly does improve our ability to deliver against our revenue guidance and some of the intended sales in the back half of the year, you know, once we get future registrations and the rest, we can look to realize those earlier in the period.
Speaker Change: Q1 was fantastic news and I just want to say, thank you to my colleagues and our regulatory clinical quality groups, all of whom development of course all of them and.
Speaker Change: It really did the heavy lifting to get that data.
Speaker Change: That approval and that product across the finish line initial customer feedback has been excellent and it sort of validation to our customers that we're committed to continuing to innovate in this space. So it gives us a.
Speaker Change: The chance to engage new customers and then also reengage existing customers with new technology, which always excites them, so getting that a bit earlier, certainly does improve our ability to.
Speaker Change: To deliver against our revenue guidance.
Speaker Change: Some of them intended sales in the back half of the year as we get future registrations and the rest we can look to.
Vivek Jayaraman: So, it was contemplated in our overall guidance just with a slightly later approval than what was realized. So, again, thanks to my colleagues for making that a reality. On the ISC side, it does assume a ramp up over the course of the year as noted in when we exited last year, we said that we had built up quite a bit of demand that was getting slightly ahead of our manufacturing volumes and that was the BLA secured by our manufacturing partners as they ramped up. volumes, we could start to pacify that demand that was building up.
Speaker Change: Realize those earlier in the period. So it was contemplated in our overall guidance just with a slightly.
Speaker Change: Later approval then than what was realized so again, thanks to my colleagues for making that a reality.
Speaker Change: IFC side, it does assume a ramp up over the course of the year.
Speaker Change: And when we exited last year, we said that we had built up quite a bit of demand that we're getting slightly ahead of our manufacturing volumes and that with the BLA secured by our manufacturing partners as they ramp.
Speaker Change: Volumes that could start to pacify that demand that was building up so we anticipate that will be reflected in revenue growth throughout the course of the year and as things are playing out now to the first third of the year.
Vidyun Bais: So we anticipate that will be reflected in revenue growth throughout the course of the year. And as things are playing out now to the first third of the year, you know, as we are on this call here on May 1, those trend lines appear to be materializing. So we anticipate, we're still early days in terms of penetrating this market. So we anticipate continued growth. Perfect, thanks for the color there.
Speaker Change: On this call your unmake first those trend lines that appear to be materializing. So we anticipate we're still early days in terms of penetrating this market. So we anticipate continued growth in IFC.
Speaker Change: Okay perfect. Thanks for the color there.
Kevin Green: And then just turning to the bottom line, you beat us on adjusted EBITDA. I think you guys have discussed being modestly positive for the balance of 25. I'm just wondering if you're expecting any material investments in the back half of this year, just some of your assumptions there. Thanks, Vidyun. Kevin, do you mind covering that? Yeah, happy to. We really don't, you know, what we said in our prepared remarks, especially for SG&A, is that it might tick up slightly as we realize a full quarter of cost of living adjustments, but we don't anticipate making any significant Investments, at least as it pertains to our adjusted EBITDA metric.
Speaker Change: Just turning to the bottom line you beat us on adjusted EBITDA I think you guys can discuss being modestly positive for the balance of 'twenty five.
Speaker Change: Wondering if you're expecting any material investments in the back half of this year and just some of your assumptions there.
Speaker Change: Sure.
Speaker Change: Thanks, David and Kevin you might cover that.
Speaker Change: Yes happy to.
Speaker Change: We really don't know what we said in our prepared remarks, especially for SG&A is that it might tick up slightly as we realize a full quarter of cost of living adjustments, but we don't anticipate making any significant.
Speaker Change: Investments at least as it pertains to our adjusted EBITDA.
Vidyun Bais: We do expect that government contract expenses and the corresponding revenue may tick up as the 2024 BARDA contract really kicks off and the activities under that agreement begin beyond just the nascent levels that we described. So, other than that, I think we feel pretty confident Q1, as implied by our revenue guidance, is typically the lowest revenue quarter for us. And we think that, you know, coupled, you know, the growth coupled with stable margins and control of OPEX is going to bode well for our ability to hit that adjusted EBITDA goal. Great, thanks so much for taking the question.
Speaker Change: EBITDA metric, we do expect that government contract expenses and the corresponding revenue may tick up as the 2020 for BARDA contract really kicks off in the activities under that agreement.
Speaker Change: <unk> began beyond just a nascent levels that we've described so.
Other than that.
Speaker Change: We feel pretty confident Q1.
Speaker Change: As implied by our revenue guidance is typically.
Speaker Change: The lowest revenue quarter for us.
Speaker Change: And we think that coupled with the growth coupled with stable margins and control of Opex is going to bode well for our ability to hit that adjusted EBITDA goal.
Speaker Change: Yes.
Speaker Change: Great. Thanks, so much for taking the questions.
Operator: Thank you very much, Vidyun.
Speaker Change: Thank you very much.
Operator: Thank you, and as a reminder, to ask a question, please press star 1 1 on your telephone.
Speaker Change: Thank you and as a reminder to ask a question. Please press star one on your telephone.
Bill Bonello: Our next question comes from Bill Bonello with Craig Hallam. You may proceed.
Bill Bonello: Our next question comes from Bill Bonello.
Meg: Meg how long you May proceed.
John: Hi guys, this is John. I'm for Bill. So you guys, you talked early on the call about some new geographies in the pipeline. I know you've talked before also about the next-gen Illuminator being a potential catalyst in those conversations with new geographies. So if you could, any additional color you able to give on where talks are at there and kind of the pace you see those potentially progressing at and then any color you can add on whether you've seen like early interest and uptake with the next-gen Illuminator. Yeah, thanks very much for the question, John.
Speaker Change: Hi, guys. This is John on for Bill.
Speaker Change: So you guys you talked earlier on the call about some new geographies in the pipeline I know you've talked before also about.
Speaker Change: The nexgen illuminator being a potential catalyst in those conversations with new geographies. So if you could any additional color you're able to give on where talks are at there.
Speaker Change: And kind of the pay ACC those potentially progressing out and then.
Speaker Change: Any color you can add on whether you've seen like early interest and uptake with the Nextgen illuminator.
Speaker Change: Yes, thanks very much for the question John.
Obie Greenman: You know, the ACEs start. It was just great to get the approval earlier than we expected. And then there's actually been subsequent in-country approvals that have come through as well. Vivek can give you a much better perspective on sort of what the customer reaction has been and the ongoing efforts to deploy or deploy the instrument at multiple sites. Yeah, thanks, Obie. As Obie noted, getting that approval was critical because it's a catalyst, especially as we enter into new geography. That is going to be the sort of foundational illumination device for new markets that we enter into.
Speaker Change: Yes, just to start it was just great to get the approval earlier than we expected and then theres actually been subsequent.
Speaker Change: In country approvals that have come through as well.
Speaker Change: Thank you much better perspective on sort of what the customer reaction has been in the ongoing efforts to deploying or deployed.
Speaker Change: Play the instrument at multiple sites.
Speaker Change: Yes Tobey.
Tobey: There'll be noted getting that approval now was critical because it's a catalyst, especially as we enter into new geographies and that is going to be at that sort of foundational elimination device for new markets that we enter into I think we've spoken in the past about sort of rough geographic areas, where we're targeting growth in the middle East.
Vivek Jayaraman: I think we've spoken in the past about sort of rough geographic areas where we're targeting growth, the Middle East, in particular, the Kingdom of Saudi Arabia, that we've seen solid growth there. There's a tremendous amount of potential in that marketplace. They tend to follow AABB and FDA standards. So with the strength of our business in the U.S., that really has positive influence on that market. And in parallel, the government is making a concerted investment in health care. So we are seeing meaningful growth there.
Speaker Change: In particular, the kingdom of Saudi Arabia.
Speaker Change: We've seen solid growth there there is a tremendous amount of potential in that marketplace. They tend to follow.
Speaker Change: And SBA standard so the strength of our business in the U S that really has a positive influence on that market and in parallel the government is making a concerted investment in health care. So we.
Speaker Change: Are seeing meaningful growth there in Germany.
Vivek Jayaraman: In Germany, we've initiated. commercial activity in Germany. That's the single largest market in Western Europe. That market's a bit more like the US as opposed to France, where in France there's one decision maker, but in Germany there are multiple. But the conversations are really positive there and there are a number of clinicians that have become advocates for pathogen reduction. And then expanding outside of our EMEA geography, I think we've noted our joint venture with China in the past that continues to be an area of where we have a very strong partner there. We believe that the clinical value and utility for intercepting the Chinese market is significant.
Speaker Change: We've initiated <unk>.
Speaker Change: Marshall activity in Germany, and Thats, the single largest market in western Europe that market's a bit more like the U S.
Speaker Change: As opposed to <unk>.
Speaker Change: France, where brands with one decision maker, but in Germany. There are multiple but the conversations are really positive there and there are a number of clinicians and become advocates for pathogen reduction and then expanding outside of our EMEA geography, I think we've noted our joint venture with China in the past that continues to be.
An area.
Speaker Change: We have a very strong partner there, we believe that the clinical value and utility for them.
Speaker Change: Intercept in the Chinese market is significant and we're marching towards.
Vivek Jayaraman: We're marching towards approval there from the NMPA. And so those are just a few of the examples of international markets that we believe are receptive to our technology, should be able to drive growth through the balance of the decade, and where we've continued to make meaningful progress over the course of the past few quarters. And you know, it's always a bit of a gamble to speculate as to exactly when some of these things will materialize. But one of the things that we have now and continues to strengthen over the course of each quarter that we go through is the volume of real world experience, clinical validation, and customer advocacy supporting the technology.
Speaker Change: Quinn.
Speaker Change: We're marching towards approval there from the NFPA and so those are just a few examples of international markets that we believe are receptive to our technology should be able to drive growth through the balance of the decade, and where we've continued to make meaningful progress over the course of the past few quarters.
Speaker Change: It's a bit of.
Speaker Change: Gamble to speculate as to exactly when some of these things will materialize, but.
Speaker Change: One of the things that we have now and continues to strengthen over the course of each quarter that we go through is the volume.
Speaker Change: Real world experience clinical validation and customer advocacy supporting the technology there'll be noted earlier on the call.
John: As Obi noted earlier on the call, you know, we're north of 20 million transuseful doses that we've distributed. And so it really does speak to the value and the clinical demand for our technology. Awesome, thank you. That was very helpful. And I'm sure it feels good to have a CE mark approval ahead of schedule.
Speaker Change: The $20 million currency is full doses that we've distributed and so.
Speaker Change: It does speak to the value and the clinical demand for our technology.
Speaker Change: Awesome. Thank you that's very helpful.
Speaker Change: Yes, I'm sure it feels good to have a CE mark approval ahead of schedule.
Obie Greenman: I guess one follow up. Do you, do you guys know yet? Or are you able to say who the competent authority is that will be reviewing the new red blood cell submission? Yeah, in discussions with TUV, we've identified SUQL, which is the Czech Competent Authority. It's not a done deal until the file gets transferred to the Competent Authority by TUV. So it's still a possibility it could change, but unlikely. Awesome. Thanks a lot, guys. Thanks a lot, John. Thank you.
Speaker Change: I guess one follow up do you do you guys know yet or are you able to say.
Speaker Change: Who is the competition authority is that'll be reviewing the new red blood cell submission.
Speaker Change: Yes, and discussions with the T V. We've identified <unk>, which is the check competent authority, it's not a done deal until that.
Speaker Change: The file gets transferred to the competent authority by TV. So it's still a possibility that could change but unlikely.
Speaker Change: Awesome. Thanks, a lot guys.
John Bill: Thanks, a lot John.
Obie Greenman: I would now like to turn the call back over to Obie Greenman for any closing remarks. Well, thank you all for joining us today and for your continued support of Cerus and our enduring mission. Looking forward to updating you on all the progress we're going to make throughout the remainder of Q2 and on the next earnings call, which will likely be at the end of July or early part of August.
Speaker Change: Thank you I would now like to turn the call back over to Obi Greenman for any closing remarks.
Obi Greenman: Well. Thank you all for joining us today and for your continued support of Cirrus and our enduring mission.
Obi Greenman: Looking forward to updating you on all the progress we're going to make throughout the remainder of.
Obi Greenman: Q2 on the next earnings call, which will likely be at the end of July or early part of August thanks very much.
Operator: Thanks very much. Thank you.
Operator: This concludes the conference. Thank you for your participation. You may now disconnect. Thanks for watching!
Obi Greenman: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
Obi Greenman: Okay.
Obi Greenman: [music].
Obi Greenman: Okay.
Obi Greenman: Okay.
Obi Greenman: [music].