Champions Oncology's Q2 2026: Contradictions Emerge on Market Outlook, Data Strategy, and Corellia AI Partnership Status

Date of Call: December 15, 2025

Financials Results

• Revenue: $15.0M, up 11% YOY vs $13.5M prior year
• Gross Margin: 52%, compared to 45% in the prior year

Guidance:

• On track to deliver year-over-year revenue growth for fiscal 2026.
• Expect full-year positive adjusted EBITDA (management reiterates on-track status).
• Continue investing in the data platform and commercial team; near-term OpEx increases expected.
• Core services gross margins expected in the ~50–52% range with quarterly variability during radiolabeling transition.
• Plan to secure external VC funding for Corellia and then redirect investment to accelerate the data business.

Business Commentary:

• Revenue Growth and Operational Efficiency:
• Champions Oncology reported $15 million in total revenue for Q2, representing an 11% year-over-year increase.

• This growth was driven by stronger conversion of booked work due to reduced cancellations and improved operational efficiencies.

• Margin Improvement and Radiolabeling Capabilities:

• The company achieved a gross margin of 52%, compared to 45% last year.

• This improvement is attributed to operational efficiencies and the strategic importance of radiolabeling capabilities, which are in high demand for oncology drug development.

• Investment in Data Platform and Strategic Partnerships:

• Champions Oncology is investing in its data platform, enhancing functionality and expanding its utility for pharma partners.

• This strategic investment is driven by the growing interest in Champions' data platform as a critical long-term value driver and a means to strengthen strategic biopharma relationships.

• Adjusted EBITDA and Financial Discipline:

• The company maintained positive adjusted EBITDA for the quarter and remains on track to achieve this for the full fiscal year 2026.
• This is a result of disciplined execution, a stable operating environment, and a focus on fiscally responsible growth without shareholder dilution.

Sentiment Analysis:

Overall Tone: Positive

• Management: "we believe we are on track to deliver on all of these" (three core goals). CFO: revenue $15.0M, up 11% YOY; "on track to achieve full year positive adjusted EBITDA." Gross margin improved to 52% from 45% prior year; management emphasized improving market engagement and strategic investments.

Q&A:

• Question from Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division): Have you seen an uptick in inbound RFP call volume and how quickly can that translate into recurring double-digit revenue growth?
  Response: Market demand is improving with stronger opportunity generation; cancellations have fallen and, with commercial investments, management is optimistic they can convert increased RFPs into growth.

• Question from Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division): Are the sales and marketing investments new hires exclusively targeting the data opportunity or also supporting PDX and other services?
  Response: Some hires support both, but the company added a dedicated data leader (Dr. Tammer Farid) and is building the data-focused commercial capability.

• Question from Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division): Given the sequential and YOY gross margin improvement, where could gross margins go for the remainder of the year and what might cause variability?
  Response: Core services margins are expected around the 50–52% range (or slightly higher) but quarter-to-quarter variability may occur due to outsourced radiolabeling costs during the transition to in-house work; data revenue could lift overall margins over time.

• Question from Richard Beferin (Private Investor): How far along are Corellia's drug candidates toward an IND and what valuation range are you targeting for Corellia?
  Response: No specific program details or valuation ranges disclosed; management says Corellia is showing encouraging data and VC interest and will provide updates when materially ready.

Contradiction Point 1

Market Outlook and Opportunities

It involves differing perspectives on the market outlook and opportunities, which can impact business strategy and investor confidence.

Have you seen an uptick in inbound call volume, and how quickly can it translate into recurring double-digit revenue growth? - Matthew Hewitt(Craig-Hallum Capital Group LLC)

2026Q2: We're feeling confident about the opportunity generation given the improving market conditions. Endpoints News' survey reported a majority of biotech execs predicting increased outsourcing, which we're positioned to benefit from. - Robert Brainin(CEO)

Have you seen an increase in inbound RFP volume, and how quickly can you convert this into recurring double-digit revenue growth? - Matthew Hewitt(Craig-Hallum)

20251216-2026 Q2: We're seeing an improvement in the market with less than 2% of biotech execs expecting to decrease outsourcing next year. - Robert Brainin(CEO)

Contradiction Point 2

Data Platform and Business Strategy

It involves the strategic direction and investment in the data platform, which affects the company's growth potential and product focus.

Are the sales and marketing investments targeting the data platform or other services? - Matthew Hewitt(Craig-Hallum Capital Group LLC)

2026Q2: We've made a significant hire, Dr. Tammer Farid, to lead the data business as GM. He brings experience from Illumina and Boston Consulting Group, which will be valuable for executing current opportunities and growing the business strategically. - Robert Brainin(CEO)

Gross margins: Will they continue to grow or decline later this year due to hiring or other factors? - Matthew Hewitt(Craig-Hallum)

20251216-2026 Q2: Our core service margins are expected to be around 50%-52% in the coming quarters, with potential fluctuations due to outsourced costs such as radiolabeling services. Increased data focus and revenue should further lift margins, though future quarters may see some variability. - David Miller(CFO)

Contradiction Point 3

Investment Landscape and Customer Sentiment

It involves differing perceptions of the investment landscape and customer sentiment, which are crucial for understanding the company's growth trajectory and financial outlook.

Have you seen an increase in inbound call volume, and how quickly can you convert it into recurring double-digit revenue growth? - Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division)

2026Q2: The investment landscape is still tough, but improving. Biotech budgets are under less pressure. - Robert Brainin(CEO)

Can you provide an update on the investment landscape and customer activity? - Tollef Kohrman (Craig-Hallum Capital Group LLC, Research Division)

2026Q1: The investment landscape is still tough but improving. - Robert Brainin(CEO)

Contradiction Point 4

Data Model Business Strategy and Opportunity Size

It involves a shift in the strategic approach and perceived opportunity size for the data model business, which could have significant implications for the company's growth and market positioning.

What stage are your Corellia drug candidates in the IND application process? What valuation range do investors expect for the company? - Unknown Attendee (Private Investor)

2026Q2: It's too early to predict the exact size of the opportunity. There's potential interest, and the data is crucial for AI and ML. The success will be determined as deals are executed. - Robert Brainin(CEO)

How large is this business opportunity compared to the traditional business? - George Marema (Pareto Ventures)

2026Q1: It's too early to predict the exact size of the opportunity. There's potential interest, and the data is crucial for AI and ML. The success will be determined as deals are executed. - Robert Brainin(CEO)

Contradiction Point 5

Corellia AI Partnership and Drug Development Status

It pertains to the progress and status of partnership with Corellia AI, which could impact investors' expectations of the company's drug development pipeline and potential future revenue streams.

How far along are Corellia's drug candidates ahead of an IND filing? What valuation range are investors targeting? - Unknown Attendee (Private Investor)

2026Q2: We share data on Corellia to watch this space. We're excited about the data and traction with VC partners. More information will be shared when relevant. - Robert Brainin(CEO & Director)

What is the status of the partnership with Corellia AI? - Matthew Gregory Hewitt (Craig-Hallum Capital Group LLC, Research Division)

2025Q4: The company has several promising programs within the Corellia portfolio. They are raising funds for drug development and are optimistic about the potential of their methodologies and target drugs. - Ronnie Morris(CEO & Director)