On December 15, 2025 Champions Oncology, Inc. (Nasdaq: CSBR), a leading translational oncology research organization, reported its financial results for its second quarter of fiscal 2026, ended October 31, 2025.
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Second Quarter and Recent Highlights:
•Total revenue increased 11% to $15 million
•Oncology services profit of $7.8 million; oncology services margin of 52%
•Net income of $237,000
•Adjusted EBITDA of $843,000
First Half 2026 Highlights:
•Total revenue increased 5% to $29 million
•Oncology services profit of $13.8 million; oncology services margin of 47%
•Adjusted EBITDA of $962,000
Robert Brainin, CEO of Champions, commented, "Our recent results reinforced our confidence in the Company’s ongoing return to growth, as we continued to make progress. While our business can vary period to period, we manage and evaluate performance primarily on an annual basis and remain focused on delivering sustainable year-over-year revenue growth. We continue to be cautiously optimistic that the pharma and biotech funding environment is beginning to strengthen, which should support improved bookings as we move into calendar 2026."
"In parallel with our core services business, we continued to invest in our data platform—expanding its capabilities to provide greater value to our pharma partners—and strengthened our business development organization to support adoption of these offerings. As our data business scales, we expect it to contribute meaningfully to long-term growth, even as it introduces additional variability in shorter reporting periods. Together, these growth engines position Champions to create meaningful long-term value for our shareholders."
David Miller, CFO of Champions, added, "From a financial standpoint, the period reflected continued progress in our operating model. Oncology services margin improved as higher revenue was generated on a largely stable cost base, highlighting the leverage in our business as volumes increase. Operating expenses rose as planned, reflecting targeted investments in areas that support future growth, particularly within our data platform and related infrastructure."
"Based on our year-to-date performance and current visibility, we remain on track to deliver year-over-year revenue growth and to achieve positive adjusted EBITDA for the full fiscal year. We believe the combination of disciplined cost control and targeted strategic investment positions the Company for continued improvement as market conditions strengthen."
Second Fiscal Quarter Financial Results
Total oncology revenue for the second quarter of fiscal 2026 was $15.0 million compared to $13.5 million for the same period last year, an increase of 11.5%. An improvement in bookings quality contributed to a higher revenue conversion percentage, resulting in revenue growth for the three months ended October 31, 2025. Total costs and operating expenses for the second quarter of fiscal 2026 were $14.9 million compared to $12.8 million for the second quarter of fiscal 2025, an increase of $2.1 million or 16.4%.
For the second quarter of fiscal 2026, Champions reported net income of $237,000, including $249,000 in stock-based compensation and $357,000 in depreciation and amortization expenses. This compares to net income of $728,000 in the second quarter of fiscal 2025, which included $9,000 in stock-based compensation and $399,000 in depreciation and amortization expenses. Adjusted EBITDA, which is defined as net income excluding stock-based compensation and depreciation and amortization expenses, was $843,000 for the second quarter of fiscal 2026 compared to adjusted EBITDA of $1.1 million in the second quarter of fiscal 2025.
Cost of oncology revenue was $7.3 million, for the three months ended October 31, 2025, a decline of $166,000, or 2.2%, compared to $7.4 million in the same quarter of fiscal 2025. The decrease was primarily driven by lower outsourced lab service costs. Oncology services margin for the quarter was 52% compared to 45% for the three months ended October 31, 2024. The improvement in margin resulted from higher revenue combined with a lower cost base due to operational efficiencies implemented during the year. Oncology services margin and profit are defined below in our Non-GAAP financial information discussion.
Research and development expense for the three-months ended October 31, 2025 was $2.6 million, an increase of $927,000 or 54.9%, compared to $1.7 million for the three-months ended October 31, 2024. The increase reflected greater investment in sequencing and related activities to advance the Company’s data licensing platform. Sales and marketing expense for the quarter was $2.0 million, an increase of $247,000, or 14.1%, compared to $1.8 million in the prior year period, driven primarily by higher compensation expense to support the growth of the data business. General and administrative expense for the three-months ended October 31, 2025 was $3.0 million, an increase of $1.1 million, or 57.4%, compared to $1.9 million for the three-months ended October 31, 2024. The increase was primarily due to higher compensation expense, including stock-based compensation, and increased IT-related costs.
Net cash used in operating activities was approximately $1.9 million for the three months ended October 31, 2025, primarily driven by an increase in accounts receivable and a decline in deferred revenue. Net cash provided by financing and investing activities totaled approximately $115,000, reflecting proceeds from option exercises offset by purchases of lab and computer equipment and repayment of financing leases.
The Company ended the quarter with cash on hand of approximately $8.5 million and no debt.
Year-to-date Financial Results
Total revenue for the first half of fiscal 2026 was $29.0 million, compared to $27.6 million for the same period last year, an increase of 5.4% Total costs and operating expenses for the first half of fiscal 2026 were $29.4 million, compared to $25.5 million for the first half of fiscal 2025, an increase of $3.9 million, or 15.2%.
For the first half of fiscal 2026, Champions reported a net loss of $230,000, including $457,000 in stock-based compensation, $715,000 in depreciation and amortization expenses, and a loss on the disposal of equipment of $20,000. This compares to net income of $2.1 million in the first half of fiscal 2025, which included $267,000 in stock-based compensation and $848,000 in depreciation and amortization expenses. Excluding stock-based compensation, depreciation and amortization, and an equipment disposal loss, adjusted EBITDA was $962,000 for the first half of fiscal 2026, compared to $3.2 million in the first half of fiscal 2025.
Cost of oncology services was $15.3 million for the six months ended October 31, 2025, an increase of $757,000, or 5.2%, compared to $14.5 million for the same period in 2024. The increase resulted primarily from higher mice costs and outsourced lab services, including radiolabeling work. Importantly, as this radiolabeling work transitions into our own labs over the coming quarters, the Company anticipates a reduction in cost of sales and an improvement in oncology services margin. Oncology services margin for both the current and prior-year periods was 47%.
Research and development expense for the six months ended October 31, 2025 was $4.7 million, an increase of $1.6 million, or 49.5%, compared to $3.1 million for the same period in 2024. The increase was primarily driven by greater investment in sequencing and related costs to support the development of our data platform. Sales and marketing expense for the first half of fiscal 2026 was $3.9 million, an increase of $423,000, or 12.3%, compared to the prior-year period. General and administrative expense was $5.5 million, an increase of $1.1 million, or 25.5%, compared to $4.4 million for the six months ended October 31, 2024. The increase was primarily due to higher compensation expense and increased IT-related costs.
Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EST (1:30 p.m. PST) to discuss its second quarter financial results. To participate in the call, please call 888-506-0062 (Domestic) or 973-528-0011 (International) and enter the access code 691139, or provide the verbal reference "Champions Oncology".
(Press release, Champions Oncology, DEC 15, 2025, View Source [SID1234661419])