CryoPort Q2 2025 Earnings Report

CryoPort EPS Results

• Actual EPS: -$0.29
• Consensus EPS: -$0.20
• Beat/Miss: Missed by -$0.09
• One Year Ago EPS: N/A

CryoPort Revenue Results

• Actual Revenue: $45.45 million
• Expected Revenue: $41.74 million
• Beat/Miss: Beat by +$3.71 million
• YoY Revenue Growth: N/A

CryoPort Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 5:00PM ET

CryoPort (NASDAQ:CYRX) (NASDAQ: CYRX) is a global provider of temperature-controlled logistics solutions for the life sciences industry. The company specializes in cryogenic shipping for critical biological materials, supporting the development, clinical testing and commercialization of cell and gene therapies, biologics, vaccines and reproductive medicine. By offering end-to-end supply chain management, CryoPort helps ensure the integrity and viability of temperature-sensitive products from point of origin to destination.

CryoPort’s product portfolio includes proprietary cryogenic dry shippers, advanced active and passive thermal packaging, and real-time data monitoring platforms. These solutions enable uninterrupted maintenance of ultra-low temperatures during transit, while providing customers with transparency and compliance documentation. In addition to specialized containers for liquid nitrogen-based shipments, CryoPort offers on-demand logistics services, temperature excursion management and supply chain optimization tools via its cloud-based CryoPortal platform.

Leveraging a global network of logistics partners, CryoPort delivers services across North America, Europe, Asia-Pacific and Latin America. The company’s 24/7 operations and qualified service centers help streamline regulatory requirements and minimize risk for research institutions, pharmaceutical and biotechnology companies, contract research organizations and cell therapy manufacturers. CryoPort continues to expand its infrastructure and technology offerings to support the growing demand for advanced therapy supply chains worldwide.

CryoPort Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Cryoport reported Q2 revenues up 14% year-over-year, with life sciences services rising 21% and products up 8%, alongside improved gross margins and adjusted EBITDA, and reaffirmed full-year 2025 guidance.
• Positive Sentiment: The sale of Cryo PDP to DHL Group generated approximately $200 million in cash and forms a strategic partnership to leverage DHL’s global scale and enhance Cryoport’s biologics supply chain reach.
• Positive Sentiment: Cryoport supported a record 728 clinical trials (around 70% of the industry) at quarter-end and anticipates up to 20 new filings and four approvals in 2025, driving future service revenue growth.
• Positive Sentiment: The company launched next-generation products—including MVE SC42V and SC43V vapor shippers and the MBE 800C high-efficiency cryogenic freezer—expanding its product portfolio for cell and gene therapy logistics.
• Negative Sentiment: A gene therapy client paused commercial distribution for a week and five clients received negative regulatory opinions, collectively creating an estimated $2 million revenue headwind for the remainder of 2025.

Presentation

[Operator]

Good afternoon, and welcome to Cryoport's Second Quarter twenty twenty five Earnings Conference Call. All participants are currently in listen only mode. Following the presentation, we will conduct a question and answer session. As a reminder, this call is being recorded. I will now turn the call over to your host, Todd Frommer from KCSA Strategic Communications. Please go ahead.

[Todd Fromer, Principal, Managing Partner & IR at KCSA Strategic Communications]

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward looking statements. All statements that address our operating performance, events or developments that we expect or anticipate occurring in the future are forward looking statements. These forward looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward looking statements are reasonable as and when made.

[Todd Fromer, Principal, Managing Partner & IR at KCSA Strategic Communications]

However, you should not place undue reliance on any such forward looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward looking statements whether as a result of new information or future events or otherwise except as required by law. In addition, looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in item 1A, risk factors, and elsewhere in our annual report on Form 10 ks to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission. As a reminder, has uploaded their second quarter twenty twenty five end review document to the main page of the Cryoport website.

[Todd Fromer, Principal, Managing Partner & IR at KCSA Strategic Communications]

These documents provide a review of Cryoport's financial and operational performance and a general business outlook. Before I turn the call over to Jerry, please note that because of the strategic partnership that has been established with DHL Group and the related sale of Cryo PDP to DHL, Cryo PDP's financials, which were previously a part of CryoPort's life sciences services reportable segment, are now presented as discontinued operations. CryoPort previously provided quarterly historical information on this basis for fiscal year twenty twenty four in our first quarter twenty twenty five year review document, which remains available on the BioPhore website. This information is intended to support the financial modeling efforts of those needing this information. Please note that unless otherwise indicated, all revenue figures discussed today will refer to continuing operations.

[Todd Fromer, Principal, Managing Partner & IR at KCSA Strategic Communications]

This includes Cryoport's fiscal year twenty twenty five revenue guidance. It is now my pleasure to turn the call over to Mr. Terrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

[Jerrell Shelton, President & CEO at Cryoport]

Thank you, Todd. Good afternoon, everyone. With us this afternoon is our Chief Financial Officer, Robert Slavonovich our Chief Scientific Officer, Doctor. Mark Sawicki and our Vice President of Corporate Development and Investor Relations, Thomas Heinzin. Today, Cryoport reported strong double digit revenue growth across all revenue streams in our life sciences services for the second quarter.

[Jerrell Shelton, President & CEO at Cryoport]

Service revenue increased 21% year over year, accounting for 54% of total revenue from continuing operations. Notably, revenue from our support of commercial cell and gene therapies increased by 33%, and BioStorage Bioservices grew 28%, underscoring the growing demand for our integrated temperature control supply chain platform. This growth continues to be fueled by the increasing adoption and scaling of cell and gene therapies, a positive trend we believe will continue for years to come. Turning to our life sciences products. We posted a solid performance with 8% year over year revenue growth, driven by improved demand, particularly from animal health customers during the quarter.

[Jerrell Shelton, President & CEO at Cryoport]

We made we also continued to expand our product portfolio with the launch of our next generation MVE SC42V and SC43V vapor shippers, which offer medical and animal health professionals improved safety and reliability for transporting and preserving sensitive biological materials at cryogenic temperatures. During the second quarter, we also recorded revenue in accordance with plan from sales of MBE's high efficiency 800C cryogenic storage system, which was released earlier this year. This compact form factor freezer was designed for facilities with limited space that require high capacity and security. These innovations demonstrate our continued commitment to addressing the evolving needs of our clients globally and expanding our future revenue potential. For the second quarter, we had an overall 14% increase in total revenue from operations, and we delivered an increase in gross margin along with a meaningful lift in our adjusted EBITDA as a result of our pathway to profitability initiative.

[Jerrell Shelton, President & CEO at Cryoport]

Given the strong execution across all our business units, we are reaffirming our full year 2025 revenue guidance as we move toward our goal of sustainable long term profitability, which will accelerate as our capital projects mature. I'm pleased with all the progress of all of our business units, but I would be remiss if I didn't highlight one of the most significant achievements for the second quarter, which was our launch of our strategic partnership agreement with the DHL Group and DHL's acquisition of Cryo PDP in a transaction that included cash payments of approximately $200,000,000 to CryoPort. Aside from a strong infusion of capital, this strategic partnership provides for enhancing our global biologics capabilities, and effectiveness by leveraging DHL's competencies, scale, and reach in Asia Pac and EMEA, we will be increasingly well positioned to expand our life sciences business and deepen our leadership in the rapidly growing global regenerative medicine market. This strategic partnership is an initial step as we continue to work to develop a strong global partner network that complements our core capabilities through discussions with various global companies. Before we take your questions, I want to briefly address a unique situation with one of our clients that has received some immediate attention.

[Jerrell Shelton, President & CEO at Cryoport]

One of our gene therapy clients temporarily paused the distribution of their commercial therapy for about a week in July. The therapy is now back on the market and shipping to patients. However, that company anticipates treating fewer patients than originally forecasted in 2025. We do not expect this to have a material impact on our business. Our guidance that we reaffirm today considers an estimated revenue impact of approximately $2,000,000 from this client for the remainder of the year.

[Jerrell Shelton, President & CEO at Cryoport]

As of June 30, Cryoport supported a record seven twenty eight clinical trials, which is approximately 70% of the industry cell and gene therapy trials. For the remainder of 2025, we anticipate up to an additional 20 application filings, one new therapy approval, and an additional three approvals for label or geographic expansion. Also, we want to note that during the quarter, five of our clients that had filed for approval earlier this year or late last year received negative opinions from the FDA or MAA. All these clients have requested meetings with the regulators to find a pathway forward to bring their therapies to market. Given the need for these therapies, along with the recent changes within the FDA, many analysts are thinking more positively about their chances of gaining approval later this year or early in 2026.

[Jerrell Shelton, President & CEO at Cryoport]

The strength and resilience of Cryoport's performance in the second quarter despite these challenges faced by a few of our clients, by largely in the broad number of clinical trials we support and the scaling of the current commercial therapies we are supporting on a global basis. Our commercial revenue is expected to drive our growth for years as it is boosted by additional Cryoport supported therapies as they reach commercialization, including the new cell therapy from our customer Abiana Therapeutics that was approved by the FDA during the second quarter. I probably mispronounced that, and I think it's Avionna. In summary, our second quarter was marked by strong revenue growth, improved margins, and the beginning of the execution of a transformative strategic partnership agreement. We are entering the second half of the year with strong momentum and a clear focus on driving long term shareholder value as we support the growth of the global regenerative medicine markets and the life sciences in general.

[Jerrell Shelton, President & CEO at Cryoport]

As the regenerative medicine industry accelerates, the complexity and precision required to safely deliver personalized, often lifesaving therapies has never been greater. Our global platform of temperature controlled supply chain solutions, coupled with real time informatics and regulatory compliant processes, enables seven twenty eight active clinical trials and 18 commercial therapies worldwide. Whether supporting first in human studies or globally scaled commercial treatments, Cryoport ensures end to end integrity. From the laboratory to the manufacturer to the points of care to the patient's bedside, our advanced packaging systems, bio storage and bioservices capabilities, biologics, and cryogenic infrastructure have become mission critical to the industry's leading biopharma companies, CDMOs, and researchers alike. In short, we form the connective tissue between researchers, manufacturers, and the patients, enabling the secure preservation and movement of living regenerative therapies with real time data and systems and a global reach.

[Jerrell Shelton, President & CEO at Cryoport]

We do more than support the life sciences ecosystem. We make it responsive, resilient, and ready for the future of medicine. This concludes my prepared remarks. So now I'll ask the operator to open the lines for your questions.

[Operator]

Thank you so much. Ladies and gentlemen, we will now begin the question and answer session. And session. Your first question comes from Kyle Cruz with UBS. Please go ahead.

[Kyle Crews, Equity Research Associate at UBS Group]

Thank you for taking our questions. Could you please provide a brief update on the non cell and gene therapy demand that appears to be driving the product revenues in the quarter? And could you provide an update on EntegraCell and how the adoption there is going? Thank you.

[Jerrell Shelton, President & CEO at Cryoport]

I think both those questions can be answered by Doctor. Sawicki.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Integra Cell continues to progress nicely. We are moving forward with I'm sorry, just give me one second here. Sorry, can you repeat the first part of the question?

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

The first part was on MVE. Maybe I'll step in MVE, for we are feeling better than we were about The revenue there did improve, up 8%. We do continue to believe that the business stabilized in the quarter and in last quarter. Globally, markets have been disrupted by governmental policies, and we do expect the uncertainty to continue to impact capital spending, as you can see with other life science companies.

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

In particular, at MDE, they had a very nice quarter from the animal health side with cryogenic system sales. Go ahead, Mark, on Entegrisel. Apologize for the mix up.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Yes, so Entegrisel is proceeding on track. We do anticipate initiation of revenue production this quarter with meaningful revenue starting in 2026. We are actively tech transferring in our first clients right now, which takes a little bit of time, but that's going to start to help support the revenue contribution later this year and into next year.

[Kyle Crews, Equity Research Associate at UBS Group]

Great. And then maybe as a follow-up there, you maintained the guidance, but you had a really great quarter, and it seems like there's the market seems to have improved and there is upcoming revenue streams into 2H. Can you go through the phasing on your 2H guidance and maybe go over why you didn't increase the guide? Thank you.

[Jerrell Shelton, President & CEO at Cryoport]

Yes. We didn't increase the guidance because we're being prudent, of course. And given the uncertainties in the global economy and geopolitical uncertainties as well as administrative uncertainties, and looking at the market and the puts and takes and so forth, we felt it was more prudent to keep our guidance where it is. And so that's why we reaffirmed it the way it is.

[Kyle Crews, Equity Research Associate at UBS Group]

Great. Thank you very much.

[Operator]

Your next question comes from David Saxon with Needham. Please go ahead.

[David Saxon, Senior Analyst at Needham & Company]

Great. Thanks for taking my questions and congrats on the quarter. Maybe just a follow-up to that last question on guidance. Just comps, I guess, third quarter, it looks to be an easier comp and then easy comp, but slightly harder in the fourth quarter. So how should we think about growth exiting the year?

[David Saxon, Senior Analyst at Needham & Company]

And any early thoughts on 2026, just given the momentum you're seeing? And then I'll have a follow-up.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

Just on '26, Osceo '26, we'll give guidance typically at year end. We are providing some outlook in our review piece that's posted on our website related to the expectations on BLA and MAA filings and approvals. So I'd encourage you to look at that document as well. I think you're looking at the second half of the year, as Jerry mentioned, we're holding to our guidance for the full year. There's certainly upside opportunity there.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

But typically, we would expect, obviously, a stronger Q4 compared to the Q3 revenue growth. I think overall, in terms of the general performance of the first half of the year and the second quarter, obviously we made significant improvements in terms of gross margins, both on products and services, bringing total gross margin to 47%. So that's a significant increase over prior year. And then from a bottom line perspective as well, if you look at the adjusted EBITDA from continuing operations where for Q2 at a negative 0 900,000 from a negative 5,600,000 in the prior year or negative 2,800,000 in Q1 of this year. So everything is moving in the right direction, revenue growth, gross margins, as well as the bottom line.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

And we certainly want to push that forward during the second half as well. So that's, think, as much as we can say at this point.

[David Saxon, Senior Analyst at Needham & Company]

Okay, great. No, that was super helpful. Thanks for that. And then, I guess, on the balance sheet, I mean, $426,000,000 in cash post the sale of PDP. Looks like you did some smaller share repurchases over the last couple of months, but would love just an update on how you're thinking about capital allocation philosophy. You've done M and A in the past. You took a pause there. So would love your updated thoughts there. Thanks so much.

[Jerrell Shelton, President & CEO at Cryoport]

Yes, David. We did bounce back some common stock in the second quarter, and we'll continue to take our usual prudent approach to deploying capital. We'll be thoughtful, opportunistic, and we'll also be strategic with all the funds that we have. But we'll continue to consider buying back our stock as we think it's significantly undervalued in the market.

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

Just to put a number on it, we did buy back a million shares since our last report.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

And Jeremy, just to add, obviously cash is king in this environment. We did pay back the 2025 convertible notes about $14,000,000 during the second quarter. And we obviously want to maintain a strong balance sheet while evaluating the various options that we have to apply more capital and cash.

[David Saxon, Senior Analyst at Needham & Company]

Okay. And if I could just, I guess, follow-up on that. So any change in your appetite for M and A or you just want to kind of protect the balance sheet and maybe do some opportunistic share repurchases? Is that

[Jerrell Shelton, President & CEO at Cryoport]

David, the we'll be opportunistic. If an acquisition comes along that's compelling, it's accretive, it meets our profile, we'll certainly consider it. But our focus right now is internal. We have some we have initiatives going on that we need to execute on. And so we're constantly getting opportunities presented to us.

[Jerrell Shelton, President & CEO at Cryoport]

We look at them. And if they're compelling, we will definitely consider them. But there's no plan for any acquisitions at this point.

[David Saxon, Senior Analyst at Needham & Company]

Okay. That's helpful. Thanks, Jay.

[Operator]

Your next question comes from Matt Stanton with Jefferies. Please go ahead.

[Matt Stanton, VP - Equity Research at Jefferies]

Hey, thanks. I wanted to kind of zoom out for a higher level move for Jerry. Just in terms of the late quarter FDA update on the REMS and certain indications of approved CAR Ts, What's the early feedback that you've heard from customers? And is there any way to kind of talk about the impact or potential impact this could do due to patient volumes and any more color on timing as it relates to that update that we got late in the quarter? Thank you.

[Jerrell Shelton, President & CEO at Cryoport]

Hey, Matt, the impact of the ruling on REMS is very positive and everyone sees it as positive. It's really too early to quantify exactly what that means, but we do think it will make it much easier for everyone in the system, and it will certainly make it easier for rural points of care and so forth. And Mark, may you want to add to that?

[Mark Sawicki, Chief Scientific Officer at Cryoport]

No, I mean, Jerry is absolutely correct. It should have a benefit, definitively beneficial impact. And some of our key clients have already reported on it in a positive way and others are still to report. We would expect to see updated forecasts from our clients and any impact on that during the third quarter. So we should have more clarity at the next earnings call.

[Matt Stanton, VP - Equity Research at Jefferies]

Great, thanks. And then maybe just on biopharma, I think for the product side, you talked more about animal health, but just in terms of your biopharma customers either by product or region, pretty robust trends in the quarter. What are you hearing from customers in terms of appetite to spend, how that might vary? We've seen kind of mixed signals from CROs and spend on certain projects, capital related projects maybe being pulled back given the macro. But would just love some updated color in terms of your discussions with your biopharma customers globally. Thanks.

[Jerrell Shelton, President & CEO at Cryoport]

Certainly, there's enough capacity for manufacturing in the industry right now, and I think that Mark might want to comment on that further.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Yeah, you've got to take a look at where the pullback is occurring. The vast majority of the pullback is really directed through the NIH and ties into really preclinical and late preclinical activity. So R and D and preclinical, our focus is really on the clinical commercial space and the vast majority of our clients are well funded and have significant relationships with large pharmas and others. We don't anticipate a negative impact from that perspective. And in fact, obviously, I think that the demonstration of the continued increase in acceleration of the clinical trial supported up to seven twenty eight and an increase of 44 year over year, an increase in phase three trials demonstrates the continued support of that portfolio, which will have significant benefit for us over time.

[Matt Stanton, VP - Equity Research at Jefferies]

Thanks. And maybe just one more if I could sneak in. Just Robert, on gross margins in the back half of the year, obviously the implied guide has revenues coming down a bit from 2Q levels. First half saw a lot of good progress on gross margins. Should we expect gross margins to step down modestly in the back half of the year from kind of that 46% in the first half?

[Matt Stanton, VP - Equity Research at Jefferies]

Or do you think that's kind of a sustainable level going forward just given the number

[Robert Stefanovich, CFO & Treasurer at Cryoport]

I of think initiatives we're we're certainly going to try to sustain it during the second half. Typically, we'd expect gross margins to increase further just due to operating leverage. But we do have some newer initiatives as you're aware, like IntegraCell and building out some of the facilities in Paris and Belgium and ultimately California. So that will have some impact on gross margins as they start ramping up. So I would look at, for modeling purposes, to keep it relatively flat.

[Jerrell Shelton, President & CEO at Cryoport]

It could be a temporary impact.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

Our stated goal based on reaching operating leverage is really to get to gross margins in excess of 55% with adjusted EBITDA margins of 30%.

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

And we think that's

[Jerrell Shelton, President & CEO at Cryoport]

a very highly achievable math over time. It just takes a little time.

[Operator]

Your next question comes from Paul Knight with KeyBanc. Please go ahead.

[Paul Knight, Managing Director at KeyBanc Capital Markets]

Hi, Mark. As you've seen this commercial market accelerate, what are you seeing in terms of competitive dynamics? Are there major players trying to be there? Are some customers wanting to homebrew? What are you seeing or learning as the commercial side grows faster?

[Mark Sawicki, Chief Scientific Officer at Cryoport]

To be honest, we're seeing more and more of folks that really want the security of supply and the scalability that we offer. We're supporting the vast majority of the commercial space today and are actually engaged in discussion around expansion of what we're doing beyond traditional biologics into our other service areas. That's why you see the nice step up in our bioservices revenue. And we're also very active on integration. So most of the bigger players that you may be referring to actually want to work with us, not against us.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

They want us to be a component of their offering because of the strength that we have in the space. And the DHL deal that Jerry talked about is an example of that, but you'll see more of those types of announcements in the coming months and quarters as other larger players in the space want to work with us collaboratively, not competitively.

[Jerrell Shelton, President & CEO at Cryoport]

And you shouldn't underestimate the power of that integration, Paul. The integrated solution is what is being sought out more and more. Our clients want to simplify their efforts. Our integrated temperature control supply chain solutions are picking up steam.

[Paul Knight, Managing Director at KeyBanc Capital Markets]

Jerry, on MDE, do you feel like in the biopharmaceutical market that I guess it was destocking post COVID. Do you think that's starting to be bottoming at this juncture?

[Jerrell Shelton, President & CEO at Cryoport]

Well, my thinking is that most of that excess capacity that was built up during COVID has been burned off and that the market is stabilizing. We've had three good quarters at MBE with a solid 8% growth this past quarter. And so I think it's returning to normalcy.

[Paul Knight, Managing Director at KeyBanc Capital Markets]

And then lastly, Robert, I guess we should expect some continuing EBITDA margin expansion Because I'm assuming you have a lot of your infrastructure built in except for Entegra cells. So top line should drive natural EBITDA progression. Is that kind of the logic?

[Robert Stefanovich, CFO & Treasurer at Cryoport]

I think you're right. I mean, will depend on the top line growth in terms of the EBITDA achievement in Q3 and Q4. We do have a couple of initiatives, Entegrisel being one of them. And with that also the build out of our facilities in Paris and some further build out of capabilities in Belgium. So there will be some additional headcount and expenses that we'd expect to ramp in later in the second half.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

But in general, yes, we're certainly driving towards profitable revenue and positive EBITDA.

[Paul Knight, Managing Director at KeyBanc Capital Markets]

Thank you.

[Operator]

Your next question comes from David Larson with BTIG. Please go ahead.

[Jenny Shen, Equity Research Associate at BTIG]

Hi, this is Jenny on for Dave. Thanks for taking the question. I apologize if you already spoke about this in the beginning of the call.

[Jenny Shen, Equity Research Associate at BTIG]

I'm juggling a couple of calls here. But can you just talk about your updated view on tariffs, your expectation for cost, whether you're passing along full costs or partial costs to customers, and what their appetite to accept those higher costs has been? Thanks.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

We've seen really no real impact on tariffs across the business. Any tariffs that we do have an impact on our business, we would absolutely pass through. And we have a precedent for that through historical COVID, which our clients are well aware of. So if there is any impact from a tariff standpoint, it would be passive, but we haven't seen anything material to date.

[Jenny Shen, Equity Research Associate at BTIG]

Great. Thank you.

[Operator]

Your next question comes from Nambi with Guggenheim Securities. Please go ahead.

[Analyst]

Hey, guys. This is Thomas on for Subbu. Thanks for taking our questions. I just want to touch on the guide again. Can you just talk about where the offset is to that headwind from lower Sarepta revenue and the reiterated guide? Is that just stronger performance across the portfolio?

[Robert Stefanovich, CFO & Treasurer at Cryoport]

I think, yes, in general, it's just a strong portfolio. You can see we had increases obviously in commercial revenue, we had increases in clinical trial revenue and in clinical trial count. So we've really seen increases across the board in our services lines as well as in the product lines.

[Analyst]

Okay. And then how much of the second half guide for revenue depends on pharma, clinical and commercial milestones that may be out of your control? Or is that largely de risked at this point?

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

Just to remind you, any new approvals that would happen here recently take a while to ramp. So that isn't really a part of it or a factor in our guide.

[Analyst]

Okay, and then if I could just sneak one more in on China here. Any updates you can share on how you're progressing there and any milestones you can point us to as we look for growth in that region for you guys? Thank you.

[Jerrell Shelton, President & CEO at Cryoport]

We're not expecting our market to expand in China or any recovery in 2025 and that's reflected in our guidance. We continue to monitor our customers there and the various domestic government stimulus programs, but nothing really has changed that much.

[Operator]

Our next question comes from Mac Etok with Stephens Inc. Please go ahead.

[Mac Etoch, Research Analyst at Stephens Inc]

Good afternoon. Now that the DHL transaction is closed, can you comment on how your customers are responding to Cryoport becoming a little bit more carrier agnostic? And just what has the feedback been thus far?

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Overall, it's been extremely positive. Folks are excited to see what the lift benefit from DHL will be as it relates to obviously logistics solutions and flexibility. It also obviously provides them the ability to continue to work with their carriers of choice and to weave in DHL competencies on a complementary basis. So overall, I think very, very positive.

[Jerrell Shelton, President & CEO at Cryoport]

Matt, this is just beginning. We just began the launch and DHL is a huge company approaching $100,000,000,000 and so the in revenue. And so it takes a little while to get these things into place. So this is not it's not like it's not instant. Does take a little while to get them in place. But Mark is correct about the direction.

[Mac Etoch, Research Analyst at Stephens Inc]

I appreciate that. And just following up on Entegris. Obviously, that's a little margin dilutive at the moment as you ramp. But I was kind of curious if you could give some qualitative aspects of what you expect the long term margin profile for that business

[Jerrell Shelton, President & CEO at Cryoport]

I'll line to turn it over to Mark, but in just a second. But IntegraCell is just ramping up. And it's a revolutionary service. I mean, the way we've put it together, the cryopreservation service. And we're doing some tech transfers right now in both Houston and in Belgium.

[Jerrell Shelton, President & CEO at Cryoport]

And so we expect some revenue in the fourth quarter, late third quarter, maybe fourth quarter of this year then more significant revenue, of course, in 2026. So it's coming along on schedule and development. We're very enthusiastic about it. It does have a very good financial profile for the future, and I'll let Mark talk about that.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Yes. As Jerry had mentioned, we've historically discussed gross margins in the 60% range at maturity for our service business, and we expect the Entegrisel business at maturity to be in line with that expectation.

[Mac Etoch, Research Analyst at Stephens Inc]

Thank you for taking my questions.

[Operator]

Your next question comes from Puneet Souda with Leerink Partners. Please go ahead.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Hi, guys. Thanks for the questions here. So first one, just wanted to confirm, that was $2,000,000 had been for annual for Sarepta. Were you baking in anything for 2026 there? And are you seeing any signs of broader caution or delays among the, you know, AAV gene therapy programs or clients?

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

You talked about, you know, five of them, you know, that you're supporting, they receive negative opinion by FDA? Just wanted to make sure if those two issues are tied together.

[Jerrell Shelton, President & CEO at Cryoport]

I'll turn the technical side, Gene side over to Mark in just a moment. But Puneet, we haven't baked anything into 2026. We haven't commented on 2026, and we will but we will later on in the year after our budgeting and so forth takes place. So we'll reserve that one. But in terms of the other part to your question, Mark, do you want to answer that part?

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Yes. I view this really as just you had a change in administration. You had a change at the FDA, which obviously they had to get in and get their feet wet, so to speak. I think that some of the data that you've seen is them just really trying to get an understanding of the space a bit and taking a little bit more caution around the data side of some of these filings. So you have that as obviously a little bit of caution, but you also see very positive responses from the FDA as it relates to things like REMS.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

So I think that, on a whole, we don't see any material impact to what we expected historically around the market opportunity associated with cell and gene commercialization. I'm not sure if Tom you want to add anything to that or not.

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

Puneet to maybe one. The $2,000,000 headwind from Sarepta is for the second half of the year only, not for the full year. Right.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Got it. Okay. Thanks for that. And then on MVE, could you clarify which end of market where you saw the most growth? Was it the animal side?

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Is it the pharma? Maybe just walk us through, you know, which which business line actually drove MBE growth for you? Take Or was the distributor channel?

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

Well, it was a solid second quarter, it was really overall balanced demand. The animal health market was particularly strong on record amount of dewar sold on the animal health side, but it was also solid for cryogenic system sales in the APAC outside of China and in EMEA.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

So majority of the growth was in APAC, just wanted to clarify because we're constantly hearing about capital equipment challenges, so wanted to square that and make sure I understand correctly where the MBE growth is coming from.

[Thomas Heinzen, VP - Corporate Development & IR at Cryoport]

It's APAC outside of China, EMEA, North America was okay, it wasn't a record or anything like that. And then on the doer side, was balanced across animal health companies across the globe.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Got it. Okay. And then maybe just last one for me. You highlighted DHL, but just wondering, you seeing any change in the competitive landscape overall? You have a number of other logistics companies that have been looking at these markets.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Just wanted to get a sense of if you're seeing any change in the competitive dynamics or the market share for clinical trials.

[Jerrell Shelton, President & CEO at Cryoport]

Nothing significant. Everything we see is positive and we do have a distribution strategy. The first part of that was DHL. We're talking about the global companies in addition to what we already have. And actually, we can support most of those companies that you were talking about or referring to.

[Jerrell Shelton, President & CEO at Cryoport]

So nothing significant there to talk about other than it's positive.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

And as you can see from the data, we're continuing to increase the number of clinical trials we support. We're continuing to fortify our leadership position by the expanded solutions. You can see the BioStorage bioservices has grown significantly in Q2 by 28%. So really everything points to us continuing to build out our leadership position and really being the dominant player for cell and gene supply chain solutions.

[Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners]

Okay. Helpful guys. Thank you.

[Operator]

And your next question comes from David Larson with BTIG. Please go ahead.

[David Larsen, Managing Director at BTIG]

Hey, I hop on the call a little bit late. I'm traveling. Can you just talk about how MBE results came in relative to your own expectations? It looks like it was up 8% year over year. More color there would be very helpful.

[David Larsen, Managing Director at BTIG]

It looks like it's kind of turned around and it's now growing again.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

Yeah, I think, look, MBE performed well with 8% growth year over year. Have seen certainly improved demand for MV's products. And as we said in our press release as well, MVE is also bringing out new products into the market. So there's also innovation going on that we believe will drive demand and further demand as well. On the margin side, they're showing strong robust margins.

[Robert Stefanovich, CFO & Treasurer at Cryoport]

They've grown margins over prior year about 2.6 percentage points to 44.9%. So it's a strong good business. It's profitable a business. And as you know, again, it's by far the leader globally for cryogenic systems. So that includes the doors, the freezers and related accessories on a global basis.

[David Larsen, Managing Director at BTIG]

That's great. And then can you just talk about the broader market like the CRO space was under pressure earlier in the year? There's a lot of uncertainty around like the IRA, different like three different executive orders, tariffs. And then it looks like maybe CRO sort of came back with demand now progressing. Just what are you seeing in terms of overall sentiment from your customers, clinical trial activity, demand, for the doers?

[David Larsen, Managing Director at BTIG]

Just more color there would be very helpful. Thank you.

[Mark Sawicki, Chief Scientific Officer at Cryoport]

Yes. So obviously, you can see by our clinical trial count and the increase that the market continues to be very resilient and positive for us as it relates to cell and gene clinical engagement. We have extensive engagement with the CRO community as well as the CDMO community. The CDMO community has come back with very strong results, which we think demonstrates the strength of the space since they are obviously the leader in the actual production of a lot of these clinical materials that ultimately we move from one place to another. Overall, I think that the sentiment in the cell and gene environment despite obviously some of the shorter term funding challenges that you see, in earlier phase programs as well as the FDA have not impacted our portfolio and, obviously have not impacted the CDMO community. So we're very positive overall.

[David Larsen, Managing Director at BTIG]

Thanks very much. I'll start a good quarter. Congrats. Thank you.

[Operator]

There are no further questions at this time. I'm pleased to turn the call back over to Gerald Shelton.

[Jerrell Shelton, President & CEO at Cryoport]

You ended there pretty quickly. Thank you very much for your questions, all of you, and thanks for the discussion. In closing, we delivered a strong second quarter performance across all areas of our life sciences business. The life sciences services business, which is a key to our future growth, grew 21% year over year, led by a 28% increase in BioStorage Bioservices revenue and a 33% gain in commercial cell and gene therapy support. We also saw an increase in demand in our life sciences products, which generated a solid 8% revenue growth for the quarter.

[Jerrell Shelton, President & CEO at Cryoport]

We want to thank you for joining us today. It was a great quarter, and we appreciate your continued support, interest in our company, and we look forward to speaking with you again when we report on our third quarter financial results. We wish you all a good evening.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you so much for your participation. You may now disconnect.

Participants

Executives

• Jerrell Shelton, President & CEO
• Mark Sawicki, Chief Scientific Officer
• Robert Stefanovich, CFO & Treasurer

Analysts

• Todd Fromer, Principal, Managing Partner & IR at KCSA Strategic Communications
• Kyle Crews, Equity Research Associate at UBS Group
• Thomas Heinzen, VP - Corporate Development & IR at Cryoport
• David Saxon, Senior Analyst at Needham & Company
• Matt Stanton, VP - Equity Research at Jefferies
• Paul Knight, Managing Director at KeyBanc Capital Markets
• Jenny Shen, Equity Research Associate at BTIG
• Analyst
• Mac Etoch, Research Analyst at Stephens Inc
• Puneet Souda, Senior MD - Life Science Tools & Diagnostics at Leerink Partners
• David Larsen, Managing Director at BTIG