Avid Bioservices (CDMO) Q2 2025 earnings summary

Executive summary

• Revenues for Q2 FY2025 were $33.5 million, up 32% year-over-year, and $73.7 million for the six months, driven by higher manufacturing and process development revenues.

• Backlog rose to $220 million at quarter-end, up 11% year-over-year, with significant revenue recognition expected over the next five quarters.

• Net loss for Q2 FY2025 was $17.4 million ($0.27/share), and $22.9 million ($0.36/share) for the six months, reflecting increased SG&A and interest expenses.

• On November 6, 2024, a definitive merger agreement was signed for acquisition by affiliates of GHO Capital Partners LLP and Ampersand Capital Partners, with shareholders to receive $12.50 per share in cash, a 13.8% premium to pre-announcement price.

• The all-cash transaction is valued at $1.1 billion and is expected to close in Q1 2025.

Financial highlights

• Q2 FY2025 revenues increased to $33.5 million from $25.4 million year-over-year; manufacturing revenues rose by $7.1 million and process development revenues by $0.9 million.

• Gross loss for Q2 FY2025 was $2.0 million (negative 6% margin), improved from a $4.7 million loss (negative 18% margin) in the prior year.

• SG&A expenses rose to $10.6 million, up 61% year-over-year, mainly due to higher compensation, benefits, and legal fees.

• Cash and cash equivalents at October 31, 2024, were $33.4 million, down from $38.1 million at April 30, 2024.

• Company’s revolving line of credit expired during the quarter.

Outlook and guidance

• Management expects existing cash and anticipated operating cash flows to fund operations for at least the next 12 months.

• Financial guidance is suspended due to the pending acquisition.

• Significant portion of backlog expected to convert to revenue over the next five fiscal quarters.

• Short-term capital expenditures for fiscal 2025 are projected at $5–$7 million.

• During the merger pendency, the company is restricted from raising capital or making significant operational changes outside the ordinary course.