Avid Bioservices, Inc.

For the first quarter of fiscal 2025, revenue was $40.2 million, up 6% from $37.7 million a year ago. Gross profit was $5.7 million, with gross margin of 14%, compared with $4.1 million and 11% in the prior-year quarter. SG&A was $8.2 million, up 30% from $6.3 million, and net loss was $5.5 million, or $0.09 per basic and diluted share, versus a net loss of $2.1 million, or $0.03 per share, last year. Adjusted EBITDA was $3 million. Cash and cash equivalents were $33.4 million at July 31, 2024, versus $38.1 million at April 30, 2024. Forward guidance was qualitative rather than numeric: management expects revenues and capacity utilization to rise as it fills remaining capacity, with stronger margins over time and continued EBITDA growth, though quarters may be lumpy.

Nick Green characterized the quarter as a solid start to fiscal 2025 and said momentum from the prior quarter carried through in strong revenues and new business signings. He emphasized that investment in infrastructure, facilities, capacity, and expanded capabilities is attracting larger customers and a wider mix of opportunities. He framed the main strategic focus as filling remaining capacity and using backlog execution to drive higher utilization, better margins, and growth.

Dan Hart said revenue of $40.2 million benefited mainly from higher process development revenue, while gross profit improved to $5.7 million and gross margin reached 14% from 11% a year ago. He noted the gross profit increase was helped by higher revenue and lower material costs, partially offset by compensation, facility, and depreciation costs. SG&A rose to $8.2 million due to compensation, benefits, audit, legal, and consulting fees, contributing to the $5.5 million net loss, but adjusted EBITDA was still positive at $3 million. Cash and cash equivalents fell to $33.4 million from $38.1 million, and he said he would like to see EBITDA continue to grow, while acknowledging quarterly lumpiness.

Analysts asked whether the $66 million of new wins would change backlog conversion, and management said the mix is slightly more weighted to early-phase work than prior quarters, so conversion could be slightly more accelerating but not dramatically different. Questions on the two PPQ programs were answered with one described as a commercially approved product being outsourced from internal manufacture and the other as coming from another CDMO in Phase 3. Analysts also pressed on large-pharma demand and BIOSECURE; management said demand from large pharma has not changed materially, the company is seeing increased interest tied to BIOSECURE, and later-stage programs appear to be where concern is greatest. On cell and gene therapy, management said activity is still behind mammalian biologics and has not caught up yet.