BioLife Solutions, Inc. Aktie

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions Q1 2026 Shareholder and Analyst Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions.

Thank you, operator. Good afternoon, everyone, and thank you for joining the BioLife Solutions 2026 First Quarter Earnings Conference Call. On the call with me today is Roderick de Greef, CEO and Chairman of the Board. We will cover business highlights and financial performance for the quarter and reiterate our 2026 financial guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the first quarter of 2026, which is available at biolifesolutions.com.

As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC filings. These statements speak only as of the date given, and we undertake no obligation to update them. We will also speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon.

Now I'd like to turn the call over to Roderick de Greef, Chairman and CEO of BioLife.

Thanks, Troy. Good afternoon, everyone, and thank you for joining us for BioLife's First Quarter 2026 Conference Call. We're off to a solid start to 2026 with first quarter revenue growth of 25% and adjusted EBITDA up approximately 15% versus the prior year. Performance in the quarter was driven by continued strength across our broader product portfolio, led by our biopreservation media or BPM franchise.

We entered 2026 with a simplified business and heightened focus on high-margin recurring revenue, and our results this quarter demonstrate the operating leverage in our model as a result. At the same time, we're seeing continued momentum across the CGT landscape, driven by expansion into larger indications, encouraging data readouts, strategic M&A and an improving funding environment, all of which we believe will support long-term growth across our end markets and underpins sustained value creation for BioLife shareholders.

Turning to the quarter's results. Total revenue reached $27.5 million, increasing 25% year-over-year and adjusted EBITDA of $6.2 million or 22% of revenue, up roughly 15% from the prior year. BPM remained the primary driver of revenue growth with our other cell processing tools also contributing to overall growth. BPM represents over 85% of total revenue and continues to benefit from broad adoption across both commercial therapies and clinical pipelines where we maintain a dominant market share. Our top 20 BPM customers represented approximately 80% of BPM revenue and demand forecast from these accounts provide good visibility into our business.

Channel mix remained consistent with over 60% of BPM revenue generated through direct sales with the balance through third-party distributors. Roughly half of BPM revenue was generated from customers with approved commercial therapies, and this remains a key driver of growth and durability in our model. We highlight these metrics because they reflect the ongoing shift in our business toward later-stage programs and commercial products, which are more stable, less sensitive to funding dynamics and growing faster than the broader CGT market.

Several of the therapies we support are already at or tracking toward blockbuster status with annual revenues exceeding $1 billion. As these therapies scale and expand into new geographies and additional potentially larger indications, we believe BioLife is well positioned to benefit from higher patient volumes and the recurring nature of these revenue streams.

Gross margin and adjusted EBITDA as a percent of revenue declined year-over-year due to the previously discussed bag yield dynamics. This remains a key operational priority, and we are making steady progress in close collaboration with our key customers to address it and are confident that this is temporary in nature. Stepping back, our market position continues to strengthen. At the end of the quarter, our BPM products were embedded in 17 approved therapies with visibility into an additional 9 unique approvals, expanded indications and geographic expansions over the next 12 months.

Across the broader pipeline, we estimate our solutions are utilized in more than 250 commercially sponsored CGT clinical trials in the U.S., exceeding a 70% market share with an even higher share in later-stage Phase III programs. Independent third-party analysis of U.S. commercially sponsored trials where our biopreservation media is not used, no other commercial alternatives were identified, suggesting that these trials are relying on internal homebrew formulations.

Given our leading share among late-stage programs, we expect this pipeline will convert into future commercial revenue as therapies advance through the approval process, reinforcing our position as a critical spectrum component of the cell therapy workflow. Building on this foundation, our team is focused on expanding BioLife's role within the CGT workflow beyond biopreservation media. Our CellSeal Vials and hPL product lines are already utilized in 4 approved therapies and over 35 clinical programs, and that number continues to grow. This expanding footprint is supporting our cross-selling efforts with existing BPM-only customers evaluating additional components of our portfolio.

Given the size of these organizations and the rigor of their validation processes, adoption cycles tend to be longer, reflecting a higher bar for change while reinforcing the stickiness of these relationships. That said, we're seeing encouraging early traction and each additional BioLife product that's integrated into a therapy has the potential to increase our revenue per dose by 2 to 3x relative to BPM alone. While still early, this represents a meaningful opportunity to enhance both growth and the overall financial profile of the business.

From a capital allocation standpoint, we remain focused on the highest return opportunities to support long-term growth, both organically and through disciplined strategic initiatives. Alongside our cross-selling efforts, we are regularly evaluating adjacent areas that build on our core scientific and commercial strengths. This includes selective acquisitions, minority investments and strategic partnerships that broaden our platform and increase our participation across the CGT ecosystem. This is enabled by our balance sheet, which gives us the flexibility to pursue attractive opportunities with discipline while maintaining a high bar for financial profile and strategic fit.

Turning to our 2026 outlook. We are affirming the guidance we introduced on our last call. We expect revenue of $112.5 million to $115 million for the year, representing growth of 17% to 20%. As in prior years, our guidance reflects the visibility we have today based on demand forecast from our key customers. We also expect continued operating and adjusted EBITDA margin expansion and anticipate generating full year GAAP net income for the first time in many years.

Before handing it over, I'll briefly highlight a few favorable developments we're seeing across the cell therapy landscape. Field is diversifying beyond traditional oncology applications with increasing activity in large autoimmune indications. We're also seeing encouraging data emerging in allogeneic cell therapies that have the potential to unlock multibillion-dollar market opportunities as well as renewed interest in established autologous approaches such as CAR-T and TILs, expanding the market from its base in liquid tumors into solid tumor indications.

At the same time, we're seeing meaningful strategic activity, including the recent nearly $8 billion acquisition of Arcellx by Gilead as well as continued investment in next-generation manufacturing capacity and automation to support scale. As these therapies evolve and care settings shift, whether into outpatient and community settings or toward off-the-shelf approaches, this is expected to support sustained demand for robust, high-quality and trusted cell processing tools, biopreservation media and packaging solutions, areas where BioLife is well positioned.

Taken together, these dynamics reinforce our confidence in the long-term trajectory of the field and the attractiveness of the CGT end market. BioLife has exposure across these areas and is uniquely positioned to benefit as these trends translate into durable demand.

With that, I'll hand the call over to Troy to provide an overview of our first quarter financial results. Troy?

Thank you, Rod. We reported Q1 revenue of $27.5 million, representing an increase of 25% year-over-year. The year-over-year increase was primarily related to increased sales of our biopreservation media products, driven by strong demand from customers with commercially approved therapies as well as strong revenue growth from the balance of our product portfolio. GAAP gross margin for Q1 2026 was 64% compared with 67% in Q1 2025.

Adjusted gross margin for the first quarter was 64% compared with 68% in the prior year. The decrease in adjusted gross margin percentage compared with the prior year can primarily be attributed to a product mix shift towards bags, which carry lower gross margins than bottles as well as a previously discussed impact from manufacturing yields. We view the yield impact as transitory and a key operational priority throughout 2026. And as it is resolved, we expect a corresponding expansion in gross margin.

GAAP operating expenses for Q1 2026 were $17.5 million versus $15.3 million in Q1 2025. The increase compared to the prior year can be attributed to a $1.2 million increase in R&D, primarily related to our PanTHERA acquisition in April 2025 and the opening of our Center of Excellence. In addition, we had a $0.9 million expense increase in stock-based comp acceleration related to severance, partially offset by a reduction of $0.8 million in acquisition costs.

Adjusted operating expenses for Q1 2026 totaled $16.8 million compared with $13.8 million in the prior year. GAAP operating income for Q1 2026 was $27,000 versus an operating loss of $0.5 million in the prior year. The improvement was primarily due to increased revenue compared to the prior year and lower acquisition costs, partially offset by higher stock comp related to severance. Our adjusted operating income for the first quarter of 2026 was $1 million compared with $1.2 million in Q1 2025. Our GAAP net income was $1.2 million or $0.02 per share in Q1 compared to $0.3 million or $0.01 per share in the prior year. The increase in net income was primarily due to increased revenues compared to the prior year.

Adjusted EBITDA for the first quarter of 2026 was $6.2 million or 22% of revenue compared with $5.4 million or 24% of revenue in the prior year. The primary driver of the change as a percentage of revenue in the current quarter was due to the impact of bag yields on our gross margin percentage as discussed earlier.

Turning to our balance sheet. Our cash and marketable securities balance reported as of March 31, 2026, was $111.5 million compared with $120.2 million as of December 31, 2025. Taking into consideration our adjusted EBITDA of $6.2 million in Q1, cash usage was primarily driven by tax obligations for share withholdings vested in Q1 of $5.6 million, debt principal payments of $2.5 million and unfavorable working capital of $6.9 million, which includes an increase in AR of $5.1 million, primarily related to timing. The entirety of our $2.5 million SVB debt balance is considered short term. Our final payment on the SVB debt balance is due in June 2026. We will pay a $1.2 million loan maturity balloon payment due at the time of maturity.

Turning to our 2026 financial guidance. We are reiterating our 2026 guidance disclosed during our fourth quarter earnings call. Total revenue is expected to be $112.5 million to $115 million, reflecting overall growth of 17% to 20%. The increase is primarily due to expected demand from our BPM customers with commercially approved therapies as well as increased demand for our other tools. We expect GAAP and adjusted gross margin for the full year to be in the mid-60s. We expect gross margins to benefit from favorable pricing, partially offset by product mix and the previously discussed impact from bag yields. We expect to achieve full year positive GAAP net income and expansion of adjusted EBITDA margin in 2026 compared to 2025. Finally, in terms of our share count, as of April 30, we had 48.9 million shares issued and outstanding and 50.3 million shares on a fully diluted basis.

Now I'll turn the call back to the operator to open up for questions.

[Operator Instructions] And our first question comes from Matt Stanton from Jefferies.

Maybe on the topic of the bags, could you just clarify, are you saying that the bags have lower margins than bottles, all else equal and that there's also the scrap issue tied to the bag, so kind of two issues on the bag in terms of mix? And then I would love to just get an update on the scrap side of the bag. I think before you talked about kind of a 90-day notice period. Maybe just help us in terms of getting that back to normal as we think about kind of the 22% adjusted EBITDA margins in 1Q and the walk up the rest of the year to kind of get to that year-over-year expansion that you reiterated again today.

Yes, Matt, let me take the second part of your question, and I'll have Troy deal with the first part. So with respect to where we are with our customers in order to solve this problem, we have been working with them over the last 60 days to provide them with several different alternatives to the existing bags, which are causing the problems. So we are at a point now where that customer notification will be going out shortly. There's a 90-day period for them to select effectively which option they'd like to utilize. And then we have to burn through the remaining bag inventory that we have.

So we're on track for the same sort of timing as we had laid out in the last phone call we had. And we would expect to be able to see some flow-through of enhanced margin either Q4 or Q1 of '27, depending on how quickly we burn through the existing bag inventory. I'll let Troy answer the rest.

Yes. And Matt, on your question on bags versus bottles on gross margin. So as a percentage of revenue, bags do have a lower gross margin than bottles by quite a bit at this point in time because of that yield issue we've been talking about.

Okay. And then so once the yield issue is rectified, are the margins closer to the same as previous is that right?

Closer, correct.

Okay. Okay. And then maybe, Rod, you talked about a little bit just outside of biopreservation media, you talked a little bit about cross-selling there. I would love just some more color on the new product front. Obviously, you have the Cryo case. I think you've talked about maybe some other things coming out of the pipeline. You have PanTHERA here, would love kind of an update on that. Just anything as we think about the back half of '26 and '27 on the new product front and other things coming out besides biopreservation media.

Sure. You bet. With respect to the PanTHERA product, we're still on track for a Q4 launch of that. We've identified what the value proposition will be in addition to identifying the final molecule that we'll be going with. So that looks good. With respect to cross-selling the other products, that is a longer-term effort. It continues to move forward with respect to increased number of validations, et cetera.

And I think that at the end of the day, when I look at the revenue growth, albeit from a smaller base, those other tools are growing at a faster rate actually than the biopreservation media is. So we're pleased with the momentum. Obviously, we'd like things to go faster, but there's a certain amount of inertia with respect to the validation process within these large companies.

The next question comes from Brendan Smith from TD Cowen.

Congrats on the quarter. Maybe just a quick one from us on a bit more sector level. I guess as you kind of look at state of biotech funding and kind of the broader strength you're seeing, are you potentially expecting any inflection orders over the coming months? I guess, just given that we're now kind of approaching almost 6 months of pretty solid funding recovery there. I guess, really, how big of a driver is that for BioLife realistically? And is this something that could jump up in Q3 or Q4? Or just kind of your view on the funnel looking like a more gradual ramp? Just kind of trying to understand cadence for guidance.

Yes. Thanks, Brendan. I think that as we've talked in the past, the biotech funding does not really impact us. To the extent that it does, it impacts us at very early-stage customers. There's a few exceptions to that. But in general, it affects earlier-stage customers that buy a very small amount of product through distributors from us, right? So the overall impact is not that meaningful. The bulk of the revenue, certainly the revenue growth is coming from well-capitalized firms. And when I look at the Phase III customers that we have that should be gaining approval over the next sort of 12 to 24 months, those are, by and large, also well capitalized.

On top of that, though, to the extent there is an impact, I read the other day where overall biotech financings for '25 were about $11.1 billion. So it seems to me that, that issue has stabilized and now should not be a headwind at any level for us going forward.

The next question comes from Paul Knight from KeyBanc.

Rod, we were at the BioLife booth at INTERPHEX, the CryoCase won one of the Best In Show awards. How is that going commercially?

Yes. We were pleased to receive the award for sure, Paul. I think it's good recognition that it truly was sort of a unique product that we put out. So again, we have well over 3 dozen validations going on, and I think that there's definite interest. But again, whenever you're dealing with something that changes in the manufacturing process, particularly of a final drug product, but even in late stage, it's a decision by committee, right? A lot of people are involved, and it takes a lot of time. But we're seeing some bright spots and are looking forward to being able to see some traction certainly towards the second half of the year, hopefully, with the type of announcement of a customer that people would recognize.

And then the other question, Rod, you mentioned earlier, autologous has kind of been the core of the market. But where are we with allogeneic cell therapy based on what customers are telling you?

Yes. I think we're still a couple of years out, but Allogene has published some decent data. I think they did a raise. So from a financial perspective, they're in a much more solid position. And I think there, although the overall BPM volumes per patient might be a little bit lower, the opportunity to address much larger patient populations is, in our estimation, going to far outweigh the reduced amount of volume per patient. But again, I think it's a good 2-plus years away from really having a revenue impact on BioLife.

And then lastly, you mentioned GAAP net income. Is that like targeting 4Q, Rod, or Troy?

No, it's for the full year per quarter, Paul.

The next question comes from Mac Etoch from Stephens.

Maybe following up on Paul's question. I think the share of homebrew has been pretty stable over the last couple of years, particularly in late-stage trials. As you think about cell and gene therapy expanding into these larger indications and the FDA focusing on more standardized platforms, do you see an opportunity to kind of capture more of that share moving forward?

Yes, I think so. As we're taking a cut of this data, Matt, on every 6-month basis. We go back and review the results of all the clinical trial work that has been done and refresh it. And the numbers are actually going up in our favor. So I think that at the end of the day, it's going to be very few folks who use a homebrew with a commercial product. As we've mentioned, we're in 900-plus trials worldwide, but the ones that really matter are the 250-plus that we're in that are commercially sponsored that are looking to achieve a commercial therapy. And I think that it's going to be increasingly difficult to justify whether it's from a cost perspective, a manufacturing process perspective, a logistics perspective, the FDA to use something other than the gold standard.

The next question comes from Matt Hewitt from Craig-Hallum.

This is Tollef Kohrman on for Matt Hewitt. Is there anything specific you want to call out on that increase in R&D expense?

Yes. I think it is directly related to bringing on the Center of Excellence, which provides us with the ability to do some serious scientific work. We have 4 or 5 scientists working at the center, all PhDs. We've never had that before in terms of a team of scientists that can actually do the R part in addition to the D part of R&D. So we're pretty pleased with that. So there's a cost associated with that as well as the cost of increasing the accelerating projects that we have internally, including the RCC, which will ultimately be the answer to the bag issue that we have. So that's a rigid container designed to carry our product from our factory to our customers in a rigid container that can be used in a closed system. So that's a product that we're definitely making an investment in as well as the consumable line associated with the CT-5. So that's where the money is going. It's really internal product development.

The next question comes from Thomas Flaten from Lake Street Capital Markets.

Rod, you mentioned in your prepared comments that commercial BPM customers were about half the revenue. And I think on the last call, you said you could get that maybe up to 55%. Any update on that outlook? Or do you think 55% is still realistic? Or do you think you can push it beyond that?

I think in the near term, that's about the right number. The rate of growth of that group of customers versus, say, distribution or noncommercial is so significantly different that it's going to be a higher number in the outer years. But in this year, I think a target of 55% is pretty much where we're going to settle out.

And our next question comes from Yi Chen from H.C. Wainwright.

This is Katie on for Yi. Thinking about some of the deals you announced on prior calls with Pluristyx and Qkine with those two coming together and that announcement on May 1, does that integration kind of give you any meaningful wins for biopreservation media demand? Are you kind of expecting any pull-through from that deal? How are you kind of thinking about that?

are you speaking about the Qkine deal?

Yes.

Yes. I think where the pull-through with our products comes into play is combining our CellSeal product line as a primary container for Qkine cytokine line. That's where we're going to see some incremental revenue from our products. The other way we'll generate revenue is obviously through the sale of their cytokines to our customer base.

Yes. I guess my question is, are you expecting any synergy now that Pluristyx and Qkine have an agreement together?

You mean the Pluristyx and Qkine agreement?

Yes, right.

No, no. I think -- yes, that's specific to Qkine providing some products that have -- that are relevant to their Organoid kit. So that really is outside of anything to do with BioLife per se.

Okay. So you don't think they'll pull through any customer base from that?

Not that will directly impact our revenue in any way, no.

This concludes our question-and-answer session. I would like to turn the conference back over to Rod de Greef for any closing remarks.

Thank you, Jason. In closing, 2026 is off to a strong start with solid top line growth. We remain focused on operational execution, including supporting our core BPM customers, expanding adoption across our broader portfolio and managing operations efficiently across our organization. We believe our position as a leading supplier of bioproduction products, together with exposure across the attractive and growing CGT end market leaves us well positioned for durable growth and long-term value creation. Thank you for your time today, and I look forward to seeing some of you at upcoming investor conferences.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions Q4 2025 Shareholder and Analyst Conference Call. [Operator Instructions] I would now like to turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining the BioLife Solutions 2025 Fourth Quarter Earnings Conference Call. On this call, we will cover business highlights, financial performance for the fourth quarter and full year 2025 and provide 2026 financial guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the fourth quarter and full year of 2025 and provided 2026 financial guidance, which is available at biolifesolutions.com.

As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC filings. These statements speak only as of the date given, and we undertake no obligation to update them. Unless otherwise noted, all financial measures discussed reflect non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon.

Now I'd like to turn the call over to Rod de Greef, Chairman and CEO of BioLife.

Thanks, Troy. Good afternoon, and thank you for joining us for BioLife's Fourth Quarter and Full Year 2025 Conference Call. 2025 was another strong year for BioLife, delivering double-digit revenue growth, operating margin expansion and improved profitability. Throughout the year, we executed consistently against our key strategic priorities, advanced our efforts to reposition the portfolio and strengthened the foundation to scale the business for years ahead.

We exit the year simpler, more focused and structurally stronger. With the divestiture of our evo product line behind us, we enter 2026 with a strong balance sheet and a fully optimized portfolio that plays to our strengths and positions BioLife to drive sustainable, profitable growth and shareholder value.

Compared to 2024, our '25 results from continuing operations demonstrate our increasingly attractive financial profile, which is driven by the culmination of our multiyear strategic transformation, a streamlined portfolio centered on market-leading consumables and sustained growth from our commercial CGT customers, which reinforces our positioning to benefit from the continued growth and maturity of our end market.

On the top line, total revenue grew 29% to $96 million, landing at the high end of our guidance, which was raised twice in the second half of the year. While gross margin experienced a decline year-over-year, primarily reflecting product mix and lower bag yields in the second half, operating leverage more than offset this impact and contributed to an increase in adjusted EBITDA to $25 million or 26% of revenue, up from $13 million or 18% in 2024.

In the fourth quarter, total revenue reached $24.8 million, increasing 20% year-over-year, driven primarily by continued strength in our biopreservation media or BPM franchise, with broad-based growth across our entire cell processing tools portfolio.

Turning to Q4 revenue composition. Our BPM product line accounted for approximately 85% of total revenue with our top 20 BPM customers continuing to account for roughly 80% of BPM revenue. This concentration provides enhanced visibility into demand across this core part of our business. These metrics remain consistent with prior quarters and reinforces the stability of our recurring revenue base.

Staying with our BPM products, direct customers continue to represent the majority of our mix versus distribution and commercial BPM customers accounted for nearly 50% of revenue, up from the low 40s range in '24. Both of these metrics reflect the ongoing shift toward later stage and approved therapies that support both near-term and long-term growth.

Stepping back from the quarter, our position within the broader CGT landscape remains strong. Our BPM products are embedded in 16 approved therapies and utilized in more than 250 relevant commercially sponsored CGT trials in the U.S., representing over 70% share. This includes more than 30 Phase III trials in which our share is approaching 80%, underscoring BioLife's position as the partner of choice for later-stage clinical programs where success rates are higher and the path to commercial revenue is more clearly defined.

Longer term, a key driver of CGT market growth remains the pace of FDA approvals, including unique therapy approvals, expanded indications, geographic expansion and movement into earlier lines of treatment. While 2025 saw fewer approvals relative to '24, we anticipate up to 5 unique therapy approvals over the next 12 months, along with 1 new indication and at least one geographic expansion.

We believe that the unique approval funnel is beginning to regain some momentum. This evolving regulatory backdrop supports our ability to capture additional value, especially within the late-stage programs we are already embedded.

Building on our BPM market leadership, we are working to expand our role within these clinical and commercial programs beyond biopreservation media. Our sales and marketing team is actively driving adoption of our broader cell processing tools across our marquee BPM customer base. As we've discussed previously, this cross-sell opportunity has the potential to increase our revenue per patient dose by 2 to 3x relative to our BPM products alone as customers incorporate additional components of our offering into their workflows.

We have numerous product evaluations underway, including several with our largest commercial customers. While adoption cycles are lengthy, engagement remains strong, and we expect to demonstrate some traction in 2026. Complementing our cross-sell strategy, we are also evaluating portfolio adjacencies that build on our scientific and commercial capabilities.

In 2025, we assessed opportunities aligned with our product profile requirements that could broaden our product offering and bring additional value to our customers. One attractive strategic adjacency we identified is cytokines, which represent a natural complement to our emerging hPL product line.

Earlier this month, we entered into a strategic distribution and product development agreement with U.K.-based QKine Limited. The agreement provides us with exclusive distribution rights for certain cytokine products and nonexclusive rights for the others within the CGT market.

In addition, our product development teams will work together to package and store certain cytokine products in our CellSeal vial line. Our acquisition of PanTHERA and the investment in Pluristyx last year, together with this new partnership, reflects our strategy to expand the platform through targeted M&A, minority investments and strategic collaboration. These actions broaden our offering and increase our participation in the evolving cell therapy ecosystem.

Turning to our outlook for '26. We issued guidance this afternoon, which included revenue between $112 million and $115 million, representing growth of 17% to 20%. As in prior years, our initial guidance reflects the visibility we have today based on the demand forecast from our key BPM customers.

In addition, we see continued operating and adjusted EBITDA margin expansion and expect the company to generate full year GAAP net income for the first time in many years.

Before handing it over, I'd like to comment on some recent developments in the cell therapy space, including encouraging clinical data in larger indications, continued advances in automation and manufacturing scalability and renewed strategic investment by large pharma through multibillion-dollar acquisitions and next-generation facility build-outs, all of which reinforce our confidence in the long-term trajectory of the field and the attractiveness of the CGT market.

BioLife is well positioned as a market leader to benefit as these dynamics translate into durable demand over the long term. With that, I'll hand the call over to Troy, who will provide an overview of our full Q4 and 2025 results and more details of our 2026 guidance. Troy?

Thank you, Rod. Today, we will be reviewing current and prior period financials from continuing operations for Q4 and full year 2025 and providing 2026 financial guidance. Unless otherwise noted, all financial measures discussed reflect adjusted non-GAAP measures.

Before we start with the financials, I am pleased to report we implemented our ERP manufacturing modules in the beginning of February with no disruption to operations. This module allows for greater automated processes and controls for our manufacturing, quality and accounting functions. This, in turn, provides a systematic foundation and automated processes to leverage into our planned growth.

As shared in our press release today, we reported total Q4 revenue of $24.8 million, representing an increase of 20% over the prior year and full year revenue of $96.2 million, representing an increase of 29% over the prior year. The year-over-year increase in both periods was primarily related to increased demand for biopreservation media from our customers with commercially approved therapies.

For the full year 2025, we had growth across all product lines, except our hPL media business, which was flat year-over-year due to certain import restrictions in China, which has since been abated. Adjusted gross margin for Q4 2025 was $15.8 million or 64% compared with $14 million or 67% in the prior year.

Full year adjusted gross margin was $63.2 million or 66% compared with $51.4 million or 69% in the prior year. The decrease in adjusted gross margin as a percentage of revenue in both periods were due to continuing product mix shift towards bags, which carry lower gross margins than bottles, and we had lower-than-anticipated bag yields in the second half of the year. Improving bag yields is a clear operational priority as we enter 2026.

Adjusted operating expenses for Q4 2025 totaled $14.7 million compared with $13.8 million in the prior year and for the full year was $59.3 million compared to $52.9 million in the prior year. Adjusted operating income for the fourth quarter of 2025 was $0.9 million compared with adjusted operating loss of $0.2 million in Q4 2024.

Full year adjusted operating income was $2.9 million compared to adjusted operating loss of $2.6 million in the prior year. Adjusted net income was $1.9 million in Q4 compared to adjusted net loss of $0.1 million in Q4 of the prior year. Adjusted net income for the full year was $6.3 million compared to adjusted net loss of $2.9 million in the prior year.

The increase in adjusted operating income and adjusted net income was primarily driven by an increase in revenues year-over-year in addition to a decrease in our sales tax accrual of $1.3 million. This was partially offset by increases in R&D expenses from increased headcount and investment in key projects.

Adjusted EBITDA for the fourth quarter of 2025 was $6.9 million or 28% of revenue compared with $3.7 million or 18% of revenue in Q4 of the prior year. Adjusted EBITDA for the full year was $25 million or 26% of revenue compared with $13.3 million or 18% of revenue in the prior year.

Our adjusted EBITDA increased primarily due to higher revenue. In addition, we had a $1.3 million gain on the sales tax true-up recorded in Q4, which had approximately a 500 basis point impact on our adjusted EBITDA margin in Q4 and a 100 basis point impact for the full year.

Turning to our balance sheet. Our cash and marketable securities balance at December 31, 2025, was $120.2 million compared with $98.4 million at September 30, 2025, and $105.4 million at December 31, 2024. Taking into consideration our adjusted EBITDA of $6.9 million, our increase in cash during Q4 2025 was primarily related to the $23.5 million in cash proceeds from the divestiture of SAVSU, partially offset by CapEx spend of $4.4 million, working capital usage of $2.2 million and debt payments of $2.5 million. Our remaining FCB debt balance at December 31, 2025, was $5 million, all of which is short term. We expect to pay off the entirety of the loan by June 2026 in addition to a $1.2 million loan maturity balloon payment due at the time of maturity.

Turning to 2026 financial guidance. Total revenue is expected to be $112.5 million to $115 million, reflecting overall growth of 17% to 20%. The increase is primarily due to expected demand from our BPM customers with commercially approved therapies as well as increased demand for our other tools.

We expect GAAP and adjusted gross margin for the full year to be in the mid-60s. We expect gross margins generally to be in line with 2025 due to favorable higher average selling prices, partially offset by product mix, primarily due to higher growth rates from our other cell processing tools.

As Rod stated, we expect to achieve full year positive GAAP net income and further expansion of adjusted EBITDA margins compared to 2025. The expected improvement in net income and adjusted EBITDA margins from 2025 is primarily driven by expected increased revenue, partially offset by expected increases in R&D and sales and marketing expenses to support our longer-term growth plans.

Finally, in terms of our share count, as of February 19, 2026, we had 48.3 million shares issued and outstanding and 50.2 million shares on a fully diluted basis. Now I'll turn the call back to the operator to open up for questions.

[Operator Instructions] The first question comes from Matt Stanton with Jefferies.

Maybe just to kick off for the guide, any more color you can provide in terms of assumptions between commercial and clinical? Rod, I think you said commercial went from low 40s to the mix to about 50. Can we see a similar magnitude of uptick in '26 on the commercial side?

And then just on the clinical side, are you starting to see some of the positive biotech funding data show up in activity levels or orders from customers? Just a little more flavor on what you're starting to see on the clinical side would be helpful as well.

Sure. So we had a strong increase in our commercial customer revenue as a portion of total revenue. As we mentioned, it's about 20 points, a little less -- actually, sorry, a little less than 10 points. But I think it's going to be not quite that much, and I would expect our commercial customers to be somewhere between 50% and 55% in '26.

With respect to the second half of your question, we're not really seeing any significant uptick. And I think the reason for that is these customers are small, Matt. And so to the extent that they're either constrained or not constrained, the amount of product they buy from us is pretty small in the early stages. So we're really not seeing any major effect of that.

Okay. And then just on the bag yield impact, is there any way to quantify what that was as a headwind in terms of margins in the back half of '25?

And then, Rod, I think you talked about it as a clear priority for '26. Can you just talk a little bit more about timing and logistics in terms of resolving the bag yield headwind you saw in the back half of the year?

Yes, you bet. I think it's about a 2- to 3-point headwind on the gross margin in the second half of the year. I believe that we have found a solution to the issue. It's a solution that requires a 90-day customer notification. So we've got that piece that's by definition built in from a timing perspective.

And then in addition to that, we have to sell through the higher cost inventory that we have in terms of finished product that's in bags sitting in our warehouse before we'll start to see the impact of the higher yield bags come through, which we expect would be right around Q4 of this year.

The next question comes from Anna Snopkowski with KeyBanc Capital Markets.

This is Anna on for Paul. Congrats on a great quarter. My first question is just around the CAR T market. It seems like we're getting better patient access with the REMS removal.

I was just wondering if you've seen this impact your top line at all or just customers' outlook at all? And then could you just remind us your exposure to CAR Ts at this point? And then I have one follow-up.

Yes. In terms of our commercial exposure, I would say it's at least over 80% with respect to CAR Ts at this point, if not a little bit higher. It's really hard, Anna, to try to parse out the impact of REMS. First, it just happened, right, within the last 6 months or so, and I think it's going to take a while for that to flow through to an increased number of patients being treated.

So while we think it's an excellent move in the right direction because I think patient access is probably the single largest constraint to the overall adoption. I've read where 20% of people who are eligible for CAR T are actually receiving CAR Ts, so I think patient access is a key factor in future growth. But it's hard to try to parse it out to the point of saying we've seen anything or not seen anything.

Okay. And then just quickly following up, on your outlook for 2026, how much would you say is rooted in commercial growth versus dependent on an improving macro conditions in clinical trials? Or would you say most of your outlook is towards the commercial side?

Yes. I think it's fair to say, Anna, that the primary driver for growth this year is going to be continued growth from the commercial customers that we have.

The next question comes from Brendan Smith with TD Cowen.

I actually wanted to follow up on your commentary regarding the cross-selling there just a little bit more. Can you maybe expound a bit on really what ultimate success kind of looks like within that initiative?

And sorry if I missed it, but can you just confirm if any contribution through that is included in some of your '26 guidance assumptions? Or should we think of that more as upside?

Well, we have a base assumption around how much of the growth of our other tools, non-biopreservation media tools, that growth, how much of that is fundamentally related to therapies we're specced into, for example, on the CellSeal vial side versus new business that we're assuming to have come in. So we're pretty clear about that split, although we won't get that granular on this call.

I think the ultimate measurement or metric, Brendan, at this time, at least for most of this year until we get a little bit more rigorous in our own data analysis is the growth rate related to the non-BPM tools versus BPM. And we do expect as a basket that the non-BPM tools will grow at a faster percentage rate than BPM in part because it's a smaller number, smaller base that we're starting from.

But as we put more focus on this and our systems get up to speed, we should be able to start speaking to the number of customers that are using one of our products, 2 of our products, 3 or more of our products, and that is definitely a goal internally to pull those metrics together and then figure out a way to report that externally.

The next question comes from Mac Etoch with Stephens.

Maybe one on the partnership agreement you signed earlier this year. It's a pretty interesting deal, maybe a little outside of your normal deal structure. But what can you share with us just in terms of maybe the margin profile?

I guess, first to start, maybe the adoption potential of that product with your CellSeal vials and all that? And secondly, what could the margins look like for that type of business?

Yes. So I'm not going to speak specifically to the margins, Mac, just from a competitive perspective. But we certainly got a margin profile that reflects the volume that we anticipate to move.

With respect to the combination of their cytokines in our CellSeal vials, that's probably a 6- to 9-month development project right there, so we wouldn't expect to see much in the way of that revenue in terms of pull-through on the CellSeal vial side of things until the end of this year, early next.

But this is a long-term strategic move for us, right? It's not about generating X amount of revenue in '26, although we will drive some revenue. But really, it's a longer-term market segment, product category that we want to be in and feel we can win there, and that's why we're there.

Appreciate that. And then maybe -- you touched on the bags being an issue in the second half of last year, as it relates to CryoCase, do you see that as a potential opportunity to maybe reduce scrap and improve margins long term as CryoCase is adopted?

Yes. So it's important to keep in mind that the CryoCase as it's configured today is designed for the final product going from the developer's factory to the patient. The rigid container, or we call it the RCC, is designed and being designed to take 100 mls of our product from our factory to our customer, which is where we have the bag problem, right?

So currently, we're shipping most of our commercial product in bags from our facility to the developer's facility. And then they drain that and they use it in their workflow. The idea would be to replace that bag on the front end, if you will, with the RCC. And we're probably 18 to 24 months away from doing that.

So the remediation that I talked about is really process oriented on our end. And I think that is going to alleviate the -- sort of the higher-than-average scrap that we've realized over the last 6 months.

The next question comes from Matt Hewitt with Craig-Hallum Capital Group.

Maybe first up, just so I heard you correctly, gross margins are still going to be weighed on a little bit here first half of the year in particular. So should we be thinking somewhat similar in Q1 versus Q4?

Yes, that's correct. And actually, throughout the remainder of the year, as Rod mentioned, we do have inventory on hand, and it is going to take time to implement our strategies and our customers to adopt the new product format, so if you look at the full year, I would still expect in line with our guidance is what we said.

Got it. And then obviously, the QKine partnership is unique. It's an opportunity to get into some new areas. Are you looking or exploring for more of those types of partnerships? Or are you still kicking the tires on potentially adding via acquisition?

Yes. I think it's all 3 of the things that I mentioned, which would be an outright targeted acquisition, minority investment strategy and/or a strategic collaboration like we've done with QKine.

And that's not to say that what we've done with QKine is the final end step with them, right? As this relationship evolves into the future, as we understand how to sell that product better, it could very well be that things develop down the road with that particular company.

The next question comes from Carl Byrnes with Northland Capital Markets.

Actually, most of my questions have been answered. I'm just wondering if you're seeing any potential acquisitions that would be in the biopreservation area where the valuations have kind of come back to what would be a more normalized attractive level to pull the trigger.

So Carl, other than the PanTHERA acquisition, we keep a pretty close eye on what we consider to be potentially competitive technology in biopreservation.

And while we are pretty rigorous in evaluating what's out there, nothing has come to our attention that would provide us with any sort of competitive advantage or value proposition that we don't already provide. That's why PanTHERA was unique, and that's why we made the move with it that we did.

Congratulations again.

The next question comes from Michael Okunewitch with Maxim Group.

I guess I would like to ask a little bit about the QKine collaboration in particular. How comprehensive is this? And are there other commonly used cytokines and growth factors for cell and gene therapy manufacturing that might be the subject of future agreements or M&A activity?

Yes. I think the short answer is yes. The deal as it stands now was specific from an exclusivity perspective to certain of their cytokines that we believe are geared toward the types that are used by our key customers as well as the pipelines that they have, so that's why it's a fairly narrow exclusivity and we do have access to a much broader number of products on a nonexclusive basis.

So again, I would reiterate that this is the first step. We've spent quite some time developing the relationship, primarily through our VP of Sales, who's also located in the U.K. and has a history with these folks. And so I'd say it's step one of a number of different ways the relationship could continue to move forward.

And then just to follow up on that. As you're saying, there is exclusivity on a limited number of cytokines, but is that exclusivity going both ways as in terms of who else can use CellSeal for those particular cytokines, potential distribution agreements that you may enter or any acquisition? I'm trying to see if the exclusivity is just for you or for them to you as well.

Well, right now, it's one way for us relative to their cytokines. We have a sort of loose intent between the 2 parties around CellSeal, so we have to pay for that still.

But I anticipate based on the discussions that we've had that it's in their interest and our interest to widely have their products sold through with the CellSeal packaging to wherever it needs to go or wherever they would like it to go because that benefits us and it benefits them, and it's unique to them. We don't anticipate at this point in time, entering into any agreements with other cytokine manufacturers to utilize the CellSeal vial.

This concludes the question-and-answer session. I would like to turn the conference back over to Roderick de Greef for any closing remarks. Please go ahead.

Thank you, operator. In closing, we expect 2026 to be another strong year of revenue growth, operating margin expansion and increased profitability. As the broader macro environment continues to evolve favorably, we remain focused on supporting our core BPM customer base and increasing adoption of our non-BPM products and driving operational excellence across the organization.

We are confident that our market leadership and business model position BioLife to benefit from the secular trends developing across our growing yet still early-stage end markets, enabling us to deliver sustainable revenue growth, expanding profitability and long-term shareholder value creation. Thank you for your time today, and I look forward to seeing some of you at upcoming investor conferences.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions Third Quarter 2025 Shareholder and Analyst Conference Call. [Operator Instructions] I will now turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining the BioLife Solutions 2025 Third Quarter Earnings Conference Call. On the call with me today is Roderick de Greef, CEO and Chairman of the Board. We will cover business highlights and financial performance for the quarter and provide an update for our increased 2025 revenue guidance as adjusted for the sale of our evo Cold Chain product line. Earlier today, we issued a press release announcing our financial results and operational highlights for the third quarter of 2025, which is available at biolifesolutions.com.

As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC filings. These statements speak only as of the date given, and we undertake no obligation to update them. We will also speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon.

Now I'd like to turn the call over to Rod de Greef, Chairman and CEO of BioLife.

Thanks, Troy. Good afternoon, and thank you for joining us for BioLife's Third Quarter 2025 Conference Call. We delivered another strong quarter, and we are raising our full year 2025 guidance as our team continues to execute and build on the momentum we've seen develop over recent quarters. On the top line, cell processing revenue increased 33% year-over-year, driving a 31% increase in total revenue for the quarter. This growth reflects sustained strength across our biopreservation media franchise and broader cell processing portfolio. Importantly, the mix of higher-margin recurring revenue continues to translate into improved profitability with adjusted EBITDA margin expanding 500 basis points year-over-year to 28%. This demonstrates that the operating leverage inherent in our business model is flowing through to the bottom line, driven by the benefits of our streamlined operations and focused product portfolio.

In early October, we announced the sale of our evo Cold Chain logistics product line for approximately $25 million in cash. This transaction further strengthens our balance sheet, bringing cash and marketable securities to approximately $125 million. Strategically, the sale allows us to focus entirely on what is now a fully optimized portfolio, which is aligned with our core competencies and operational strengths, advancing our transformation into a leading pure-play cell processing company. Over the last 2 years, our actions have reshaped BioLife into a more focused, high-margin enterprise, positioning us to deliver sustainable growth and expanding profitability for the balance of 2025 and beyond, both from continued organic growth and potentially inorganically through the disciplined allocation of capital. Looking at the third quarter more closely, cell processing revenue reached $25.4 million, a 33% year-over-year increase, driven by strong growth across our BPM franchise and our broader cell processing tools portfolio.

It's important to note that at the request of a commercial customer, we shipped $1.3 million of BPM product in the third quarter that was originally scheduled to ship in Q4. Adjusting for this timing-related pull forward, year-over-year cell processing revenue for Q3 would have come in at 26% and total revenue at 25%. Excluding the early shipment, BPM products represented more than 80% of total cell processing revenue, and our top 20 BPM customers continue to account for approximately 80% of BPM revenue, providing us with the benefit of increased visibility into this critical part of our business. These metrics are consistent with previous quarters and underscore the stability of our recurring revenue base.

Staying focused on our BPM revenue, our direct versus distributor mix shifted to approximately 70-30 compared to our historical 60-40 split. This transition reflects continued momentum from our commercial customers, which accounted for nearly 50% of BPM revenue, driving a higher proportion of direct sales relative to distribution. Looking ahead, we expect that our existing commercial customers, together with those advancing late-stage clinical programs, will remain key drivers of future growth into next year and beyond and that the commercial share of our BPM revenue will continue to increase over time. This increased mix of late-stage and commercial customers further highlights the resilience and consistency inherent in our model. This momentum within our BPM customer base is reinforced by the continued breadth and depth of our presence across the CGT landscape. At the end of the third quarter, our BPM products were embedded in 16 approved therapies and utilized in more than 250 relevant commercially sponsored CGT clinical trials in the U.S., representing over a 70% share.

Notably, this includes more than 30 Phase III trials where our share is nearly 80%, underscoring BioLife's position as the default partner for later-stage clinical programs where success rates are higher and the path to commercial revenue is more clearly defined. Building on this market leadership, we continue to focus on expanding our role within these customer programs beyond biopreservation media. The sales and marketing team remains highly focused on the significant longer-term cross-sell opportunity in front of us to drive adoption of our other cell processing tools across our marquee BPM customer base. As I've previously stated, this opportunity has the potential to increase our revenue per patient dose by 2x to 3x compared to our BPM products alone as customers adopt additional components of our offering. We look forward to sharing progress on this front on future calls.

As we look beyond the near-term, our focus remains on the broader market dynamics shaping demand for cell processing solutions, particularly the continued expansion of patient access to cell therapies as well as expectations of additional unique approvals, geographic expansions and new indications for existing approved therapies. Because our biopreservation media is embedded in nearly all approved cell therapies and nearly 80% of late-stage clinical trials, we have clearer visibility and predictability into future demand trends. More than half our BPM revenue comes from established commercial customers and late-stage programs, segments that are growing and less affected by early-stage volatility in the broader CGT landscape. In short, as patient access expands and new therapies are approved over time, BioLife will continue to grow with that dynamic, leveraging our market-leading position and trusted customer relationships to capture durable recurring revenue growth.

Finally, given the results through the first 9 months of the year and our visibility into Q4 at this point, we're raising our full year cell processing revenue guidance, which was $91 million to $93 million, to $93 million to $94 million, representing a 26% to 28% year-over-year growth rate. Total revenue guidance when adjusted for the sale of evo is expected to come in at $95 million to $96 million, representing a growth rate of 27% to 29% on a like-for-like basis.

With that, I'll hand the call over to Troy, who will provide an overview of our full Q3 results and changes to our total guidance. Troy?

Thank you, Rod. We reported Q3 revenue of $28.1 million, representing an increase of 31% year-over-year. The year-over-year increase was primarily related to a 33% increase in our cell processing platform, driven by strong demand from biopreservation media customers with commercially approved therapies. In addition, Q3 included a biopreservation media sales order of approximately $1.3 million that was anticipated to ship in Q4, but based on the customer's request was shipped in Q3. GAAP gross margin for Q3 2025 was 62% compared with 63% in Q3 2024. Adjusted gross margin for the third quarter was 64% compared with 67% in the prior year. The decrease in adjusted gross margin percentage compared with the prior year was primarily attributed to a $600,000 onetime inventory reserve we took in Q3 2025, which represented approximately 2% of our Q3 2025 revenue. Additionally, there was a less favorable product mix compared to the prior year.

GAAP operating expenses for Q3 2025 were $28.2 million versus $21.8 million in Q3 2024. The increase compared to the prior year can be attributed to increases in cost of sales related to our increased revenues and an increase in stock-based comp expense of $1.8 million over Q3 2024 related to performance-based awards. Adjusted operating expenses for Q3 2025 totaled $16.6 million compared with $14.1 million in the prior year. GAAP operating loss for Q3 2025 was $89,000 versus $418,000 in the prior year. The decrease in GAAP operating loss was primarily due to increased revenue compared to the prior year. Our adjusted operating income for the third quarter of 2025 was $1.3 million compared with an adjusted operating income of $167,000 in Q3 2024. Our GAAP net income was $621,000 or $0.01 per share in Q3 compared to GAAP net loss of $471,000 or $0.01 per share in the prior year. The increase in net income was primarily due to increased revenues compared to the prior year. Adjusted EBITDA for the third quarter of 2025 was $7.8 million or 28% of revenue compared with $5 million or 23% of revenue in the prior year. Adjusted EBITDA increased from the prior year, primarily due to a $3.9 million increase in gross margin, driven by increased sales of biopreservation media and includes a $600,000 onetime inventory reserve.

Turning to our balance sheet. Our cash and marketable securities balance reported as of September 30, 2025, was $98.4 million compared with $100.2 million as of June 30, 2025. Taking into consideration our adjusted EBITDA of $7.8 million in Q3, cash usage was primarily driven by capital expenditures of $3.7 million, debt principal payments of $2.5 million and the purchase of the Pluristyx convertible promissory note for $2 million. The September balance excludes the proceeds from the sale of our evo Cold Chain logistics product line, which occurred on October 6. The entirety of our $7.5 million SVB debt balance is considered short-term. Our final payment on the SVB debt balance is due June 2026. We continue to expect making quarterly repayments of $2.5 million and have a $1.2 million loan maturity balloon payment due at the time of maturity. Subsequent to quarter end, on October 6, we completed the sale of our evo Cold Chain logistics subsidiary for an aggregate sales price of $25.5 million, subject to certain adjustments. In our Q3 earnings release, we are presenting an estimate of key financial results, excluding evo by quarter for 2024 through Q3 2025.

Turning to our 2025 financial guidance. We are increasing our original guidance from our Q2 earnings call, and we are adjusting our full year guidance to reflect the divestiture of the evo Cold Chain logistics business, which occurred on October 6, and we anticipate will be classified as discontinued operations. Our previously stated revenue guidance from the Q2 earnings call was $100 million to $103 million, which included approximately $8 million of revenue attributed to evo. Adjusting for evo, our total revenue guidance would have been $92 million to $95 million. We are now raising our adjusted 2025 total revenue guidance to $95 million to $96 million, which includes our cell processing and ThawSTAR product lines, representing an increase of 27% to 29% when compared to prior year revenue on a like-for-like basis.

Our adjusted revenue guidance includes increasing our cell processing revenue guidance from $91 million to $93 million, to $93 million to $94 million or a 26% to 28% growth rate compared to prior year. Our guidance implies a sequential decrease in revenue in Q4 compared to Q3 due to the $1.3 million media order that was anticipated to take place in Q4, but based on the customer's request was shipped in Q3. We continue to expect adjusted gross margin for the full year to be in the mid-60s, a reduction of GAAP net loss and expansion in adjusted EBITDA margin in 2025 when compared to 2024 due to higher expected revenue, partially offset by increases in R&D expenses related to development projects.

Finally, in terms of our share count, as of October 30, we had 48.1 million shares issued and outstanding and 50.1 million shares on a fully diluted basis. Now I'll turn the call back to the operator to open up for questions.

[Operator Instructions] And our first question will come from the name of Paul Knight with KeyBanc.

Congrats on the quarter. What's pricing like? What was it in 3 or 9 months year-to-date? And what do you anticipate pricing to be in years ahead?

So, I'll take the last part and let Troy address the first one. So, we're expecting to increase prices in '26 between 4% and 6% depending on the SKU.

And if you're talking about price growth in year-to-date Q3, we did have price growth that was higher than our list price increases due to those customer contract negotiations we've been talking about.

And on your direct sales, I know you're trying to sell a variety of products now. What have you been doing with headcount, non-media sales? Could you give us color about do you continue to increase that direct sales level in the future quite a bit? Where are you with headcount to give us a gauge of kind of what your efforts are maybe headcount versus a year ago on direct sales?

Yes. So, I'd say that we've added perhaps one that's focused on the cross-selling opportunity that we have, bringing that to a total of about 6, right? But until we're confident, Paul, of the return on that investment, we're going to hold fire, although I do suspect we'll add some in 2026. I think what it comes down to is that it doesn't take a lot of people for us to focus on sort of the first -- the top 20 of our direct customers who are the key candidates to absorb or adopt some additional technology. So, the numbers are pretty small. I think the sales team is also going out and speaking with the sort of 30% of the biopreservation media clinical trials that we are not known to be spec-ed in. We may well be spec-ed in some of them, but it's not obvious to us to determine what we can do there. But if I look at the clinical pipeline of our core direct customers that have commercial therapies in the market today, let's call it, half a dozen of those, their clinical pipeline is very robust, and the focus is on getting those folks to adopt whether it's the CryoCase, the CellSeal or our HPL or CT5. Those are the 4 key products that we're trying to cross-sell into that base.

Our next question will come from the name of Matt Stanton. Just one second. Matt Stanton?

Rod, maybe one for you. Just in terms of what you saw in 3Q, obviously, it sounds like the commercial was chugging along nicely. Would love to just get a little bit more color. It sounds like trends were solid across the broader cell processing tools portfolio, albeit that's a smaller piece. And then just curious on the clinical side. We've seen a couple of months here of a little bit better biotech funding, but would love a little more color on what your discussions are like there as well.

Yes. To your point, I think across the board from a customer segment perspective, we had growth, but the rates of growth over these different segments are definitely pretty dramatic with the core commercial customers really driving the overall growth in terms of their own growth rate year-over-year. Again, we keep in good touch with our key distributors. And at least as of our last quarterly business review with stem cell, our largest distributor and who would be the most susceptible to the sort of funding issues that you're talking about, there's nothing that they can point to either good or bad that would explain sort of the progress that they're seeing this year. So, they're not raising any red flags, and they're also not saying, "Hey, there's nothing to worry about." So, it's still a bit of a wait-and-see mode. With the government shutdown, we have not seen anything specific. But if we were, it might be some relatively small amount of revenue that would hit in Q4. And we've built that in to the extent we believe that's going to happen -- we've already built that into the rest of the guidance that we have for the year.

And then maybe just taking a step back and thinking about the framing around '26. I know it's early days, but you have evo gone. I think the rest of the portfolio, you have pretty good visibility. And if we start to think about '26, you'll have a tougher comp relative to this year. It sounds like there's been nice pricing this year, but you also expect to take pricing next year. Just can you help kind of help us frame how you're thinking about '26?

Yes. I'll do it qualitatively, Matt. We believe we've got really strong momentum going into '26. We expect that a lot of the growth in '26 that we're going to realize will be driven by those commercial customers. But we do expect to see growth across all of our customer segments in the year. We're expecting to receive the full '26 forecast from these large customers in January. And that's a key part of our methodology relative to developing guidance. And so, we're going to have that by the end of January so that we'll be ready to provide a very specific guidance, which is based on some pretty good visibility on our FY '25 call in mid-February.

And our next question will come from Mac Etoc with Stephens.

I'll add my congrats as well. Maybe just a few for me. Now that the evo platform has gone and kind of removed from numbers, do you anticipate any lingering costs in Q4 and into FY '26? And then secondly, this is essentially the last piece of the strategic review puzzle that's now complete. So, what are you thinking in terms of capital allocation with the cash that you have on your balance sheet?

Troy, do you want to take the first one?

Yes. So as far as your question about lingering costs in Q4, if you look at the earnings release, and we provide an estimate of our financial results, excluding evo. So, you look at that Q3 number, that's a good baseline for Q4 as well. There's -- at this point, there's really no lingering OpEx in our corporate structure. It's really what's in that results that we've presented in the earnings release is how we see it today.

And on your capital allocation question, Mac, I think that we are definitely interested in exploring adjacencies relative to not only our existing product line, but things that dovetail with our core competencies. So, we're definitely going to be getting a little more aggressive in that exploration activity in '26 now that sort of the strategic transformation work is behind us. It also dovetails with developing our own 3-year product road map for the technology we have today. I will say, though, that given the fact that we're going to be pretty disciplined about what we look at, and a key filter criteria for us when we look at something inorganic would be that there is not a negative or at least materially negative impact on our financial profile. And while there are assets out there that would fit with us, that piece of the criteria is going to make some of these deals just not pass muster. And that's -- I'm pretty set on not going backwards from a financial profile standpoint. We've achieved a lot. I think that we have significant margin expansion in front of us, and I don't want to retard that in any way or attenuate that.

Our next question comes from Brendan Smith with TD Cowen.

Nice to see the steady demand across the segment and the new guidance, too. I kind of just piggybacking on some of the earlier questions here. Just trying to get a little bit better sense for the really next wave of growth for you all. I guess in conversations with customers, how are you kind of feeling like a potentially more stable funding environment for pharma and biotech might impact their risk appetite to either expand some of these use cases for CNGT or even maybe rotate out of these modalities altogether? Just kind of trying to understand some of the puts and takes for maybe the next 18, 24 months.

Yes. So, when you look at the contribution to total revenue that our commercial and our late-stage clinical customers provide, which is in excess of 50% of our BPM revenue, we believe that, that's going to continue to grow and accelerate. And so really, that's what we're relying on for the next 18 to 20 months -- 24 months, let's say, for growth drivers. We do believe everything else will grow. But in terms of the growth -- stronger growth rate, it's going to come from there. So, the good news is that most of our commercial customers also have a pretty deep clinical pipeline. I mean we're in 30 Phase III clinical trials, and we believe that a good portion of those over the next 24 months will get across the line, which will just be additive to the growth that's coming from our existing commercial therapies.

[Operator Instructions] Our next question comes from Thomas Flaten with Lake Street.

Rod, on some prior calls, there had been some discussion around you had a customer evaluating the CryoCase. Any update on how that project is going?

Yes, it's going. And I think we're getting closer to a point where we're getting them to make a commitment to us in exchange, as I've talked about before, for doing some development work. We're not going to do the development work on the come per se. But these are large organizations. They've got a lot of things going on. The good news is that, again, deep clinical pipeline, we're not going to be in their commercial therapy, which is going great guns. But they definitely have a pain point on bags. They've expressed that to us a number of times. So, it's really our product development team working with their process development folks about exactly what changes they want made. I think we're pretty close to that part. And now it's really coming down to the more commercial discussion of, okay, what level of commitment can you make to us for us to go ahead and expand the resources to make this happen. And we could, of course, do it just on the come, but I think it's important to solidify their commitment to adopting the technology into their clinical pipeline before we start spending money on it.

And then just to follow up on a prior question regarding the strategic review process being complete. So Thaw is with us, right? Thaw is not going anywhere. That was never on the table, just to confirm?

It was never on the table. We feel that Thaw is almost a reverse razor-razor blade type of product. We recently -- well recently, I'd say in the last 1.5 years, we were able to get the Thaw unit to work with CellSeal vials because the CellSeal vials were of a different size. The Thaw vial device was set up to Thaw. We're now in the process of doing that for our CryoCase so that we have an automated Thaw device for CryoCase. And it's just extremely complementary relative to those 2 products. So that's -- it's got good margins. We put very little sales and marketing effort into it at this point, and yet it delivers consistent growth at a really attractive rate. So, it's definitely a keeper.

There's no further questions, this will conclude the question-and-answer session. I would like to turn the conference back over to Roderick de Greef, CEO and Chairman of the Board, for any closing remarks.

Thank you, Wyatt. In closing, it's been 2 years since I returned to the company in an operating role. As I look back, I'm very pleased with the progress the BioLife team has made in executing a fundamental strategic transformation. In the last 24 months, we have solidified and built upon our market leadership position in biopreservation media, driving strong top line growth and significant margin expansion. We have optimized our product portfolio so that we can focus our efforts on our higher growth and higher margin recurring revenue products. We have also strengthened our balance sheet and have the resources to explore inorganic product portfolio expansion into relevant adjacencies in a measured and disciplined manner. All of this, in combination with what is still a relatively nascent but very exciting market, leaves us confident in our ability to continue to deliver sustainable revenue growth, margin expansion and shareholder value creation in 2026 and beyond. Thank you for your time today, and I look forward to seeing some of you at upcoming investor conferences.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.