The following is a summary of the Avid Bioservices, Inc. (CDMO) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Avid Bioservices reported a revenue increase to $40.2 million in Q1 2025, a 6% increase from the previous year.

• Gross profit for Q1 2025 was $5.7 million with a 14% margin, compared to $4.1 million with an 11% margin in Q1 2024.

• SG&A expenses rose to $8.2 million, a 30% increase due to higher compensation and consulting fees.

• The company reported a net loss of $5.5 million, or $0.09 per share, widening from a loss of $2.1 million, or $0.03 per share, in the year-ago quarter.

Business Progress:

• Signed $66 million in new project agreements resulting in a record backlog of $219 million.

• Majority of new contracts are with new customers including a significant addition of a large pharma customer.

• Executed PPQ programs, with one being a Phase 3 project progressing towards commercialization and another already a commercially approved product.

• Infrastructure investments have enhanced capabilities, attracting a more diverse customer base and broadening the project pipeline.

Opportunities:

• High backlog sets the foundation for future revenue growth and capacity utilization.

• The addition of a large pharma customer enhances company reputation and potential for further large-scale collaborations.

• Investments in infrastructure have positioned the company to better serve both large pharma and smaller biotech firms.

Risks:

• Economic fluctuations could impact financial performance, indicated by increased SG&A expenses and a widening net loss.

• The dependency on major clients like Halozyme, although decreasing, still poses a financial concentration risk.

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