OmniAb's Q3 2025: Contradictions Emerge on xPloration Revenue Timing, Partner Access, and OmniUltra Partnership Potential

Date of Call: November 4, 2025

Financials Results

• Revenue: $2.2M, compared to $4.2M in Q3 2024 (decline primarily due to fewer milestones and lower service revenue)
• EPS: $0.14 loss per diluted share, compared to $0.16 loss per diluted share in Q3 2024 (net loss $16.5M vs $16.4M)

Guidance:

• 2025 revenue expected to be $18M to $22M.
• 2025 operating expense expected to be $82M to $86M.
• Year-end cash expected to be $52M to $56M.
• Expect 2025 cash used to be lower than 2024 (excluding financings).
• Tax rate guidance unchanged at ~0% due to a valuation allowance.

Business Commentary:

• Revenue and Financial Performance:
• OmniAb reported revenue of $2.2 million for Q3 2025, down from $4.2 million in the same period last year.
• The decrease was primarily due to reduced milestones achieved and lower service revenue, with a decline in service revenue attributed to the completion of certain ion channel programs.

• Despite the decrease, revenue was partially offset by xPloration-related consumable sales and a modest increase in royalty revenue.

• Operational Efficiency and Cost Reduction:

• The company's cost and operating expense for Q3 2025 decreased to $20.4 million from $23.9 million in the prior year.
• This was driven by decreases in both R&D and G&A expenses, with a nonrecurring charge of approximately $800,000 related to a headcount reduction.
• The reduction in expenses was due to lower headcount and stock-based compensation, as well as a decrease in external expenses from completed ion channel programs.

• Partner and Program Growth:
• OmniAb ended Q3 with 104 active partners, reaching a record high level, and the number of active programs increased to 399.
• This growth was primarily due to strong program addition momentum, with a net addition of 36 programs year-to-date, including 18 new programs in Q3.

• The increase in partners and programs is attributed to the adoption and validation of OmniAb's proprietary technology platforms and their proven value in therapeutic discovery.

• New Product Launch and Strategic Initiatives:

• OmniAb announced the upcoming launch of OmniUltra, the first transgenic chicken producing ultra-long CDRH3s, with a launch event scheduled for December.
• The introduction of OmniUltra is anticipated to open new markets and business opportunities, expanding into peptide discovery and therapeutics, and potentially adding a new revenue stream.
• This new platform is expected to enhance service revenue and complement the existing xPloration instrument launch, which is performing well in improving discovery workflows for partners.

Sentiment Analysis:

Overall Tone: Neutral

• Management highlighted strong program-add momentum and new technology launches ("program adds as of the end of Q3 equaled the program adds we had in all of 2024") while also reporting revenue decline ($2.2M vs $4.2M prior year) and updating guidance after some milestones pushed to 2026; they closed a $30M private placement to bolster the balance sheet.

Q&A:

• Question from Michael Almisry (Leerink Partners LLC): What motivated the timing of the $30M private placement and what cash runway does it provide; will it get you to consistent cash-flow breakeven?
  Response: Placement was to bolster the balance sheet given improving market conditions; management says the company is now well capitalized, provided only 2025 cash guidance and no long-term runway commitment.

• Question from Michael Almisry (Leerink Partners LLC): Can you provide color on xPloration customer conversations, which partners show interest, and any thoughts on bookings/order timelines?
  Response: High interest from top-tier partners with many demos; timing aligns with partners' 2026 capital budgets and feedback is positive on efficiency and ease of use.

• Question from Sara (H.C. Wainwright): Regarding OmniUltra launch readiness—have you completed beta/pilot projects or have partners lined up to adopt at launch next month?
  Response: Substantial internal validation across many targets; launching at AET with podium presentations and positioned for December launch, but no public partner pilot rollouts disclosed.

• Question from Alexander Xenakis (Truist Securities): Any update on revenue potential for xPloration and over what time period might that materialize?
  Response: It's early; xPloration is expected to be accretive short- and long-term with multiple revenue streams (instrument sales, consumables, service/maintenance) but no precise financial guidance yet.

• Question from Alexander Xenakis (Truist Securities): Will you demonstrate xPloration at other trade shows or mainly through direct partner conversations?
  Response: They will show xPloration at trade shows (including AET) and run virtual/in-person demos directly with partners.

• Question from Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division): Are the milestone delays into 2026 an isolated issue or part of a broader trend of partners pushing R&D spend out?
  Response: Management characterizes the delays as routine development timing shifts for a few programs while overall program-add momentum remains strong.

• Question from Matthew Hewitt (Craig-Hallum Capital Group LLC, Research Division): What are partners indicating about 2026 R&D budgets and will xPloration purchases be Q1 decisions or later?
  Response: Program starts indicate healthy momentum; most budget discussions center on xPloration capex and timing depends on partner gating—many purchases likely in 2026 tied to partner budget cycles.

• Question from Brendan Smith (TD Cowen): How do you envision OmniUltra economics versus existing offerings and could it replace current partnerships?
  Response: OmniUltra is viewed as additive—opens peptide markets and new partners, likely to drive near-term service revenue with deal terms following existing upfront/service/milestone/royalty frameworks; precise terms will vary.

• Question from Brendan Smith (TD Cowen): Any color on the expected royalty ramp and which programs might drive royalties sooner?
  Response: SAL003 (anti‑PCSK9) in China just moved to registration with a 3% global royalty and potential 2026 market entry; larger royalty ramps (e.g., acasunlimab, IMVT‑1402) are modeled per analyst forecasts with launches expected around 2028.

• Question from Josh (Stifel): How does OmniUltra differ from OmniTaur, which also referenced ultra‑long CDRH3s?
  Response: OmniTaur leverages cows and existing workflows; OmniUltra uses a chicken host to combine evolutionary distance benefits with engineered features, broadening applicability (including peptide discovery).

• Question from Josh (Stifel): Any breakdown of current xPloration revenue between consumables, software and hardware and will you provide metrics in the future?
  Response: Current xPloration revenue was small and mostly consumables; management plans to provide more usage and breakdown metrics as deployment scales.

Contradiction Point 1

xPloration Revenue Generation and Timing

It involves differing expectations and clarity regarding the revenue generation from xPloration, which is a key technology for the company's growth.

Can you provide an update on xPloration's revenue and for which time period? - Alexander Xenakis (Truist)

2025Q3: xPloration is expected to be accretive to earnings and cash flow in both the short and long term. - Matthew Foehr(CEO)

Does the Q2 financial guidance factor in any contributions from xPloration? - Micheal Theodore Almisry Sonntag (Leerink)

2025Q2: The current guidance does not change, but xPloration is expected to be additive. - Kurt Gustafson(CFO), Matthew Foehr(CEO)

Contradiction Point 2

xPloration Partner Access and Instrument Sales

It pertains to the accessibility of xPloration technology for partners and the expected sales of instruments, which are vital for the adoption and revenue generation of this new platform.

Are there other trade shows where you're demonstrating the technology and forming partnerships? - Alexander Xenakis (Truist)

2025Q3: We are present at trade shows where our partners will be. In addition to launching OmniUltra at AET, we'll have a substantial xPloration presence there. - Matthew Foehr(CEO)

When will existing partners be able to join the xPloration Partner Access Program? - Unidentified Analyst (Craig-Hallum Capital Group)

2025Q2: xPloration is already part of our internal workflows and can be accessed through us, but some partners may choose to buy an instrument. - Matthew Foehr(CEO)

Contradiction Point 3

xPloration Revenue and Timing

It involves expectations around the timing and revenue generation of xPloration, which could impact investor expectations and strategic planning.

Can you provide an update on xPloration's revenue and the associated time period? - Alexander Xenakis (Truist)

2025Q3: xPloration is expected to be accretive to earnings and cash flow in both the short and long term. - Matthew Foehr(CEO)

What is xPloration's revenue outlook? What are the 2026 financial contributions? - Matthew Hewitt (Craig-Hallum)

2024Q4: We expect xPloration to be accretive to our financials, primarily in the back half of 2026. - Matthew Foehr(CEO)

Contradiction Point 4

OmniUltra Partnership Opportunities

It pertains to the potential partnerships and economic opportunities surrounding OmniUltra, which could impact the company's growth and market positioning.

Can you explain the economics of OmniUltra partnerships and differences across use cases? - Brendan Smith (TD Cowen)

2025Q3: OmniUltra opens new opportunities in peptides, adding a new set of potential partners. It's additive to our business. - Matthew Foehr(CEO)

How much revenue do you expect from OmniUltra in 2026? - Unknown Analyst (H.C. Wainwright)

2024Q4: We're optimistic that OmniUltra will open new partnerships for us, particularly in the rapidly growing field of peptides, including opportunities in both therapeutic and vaccine development. - Matthew Foehr(CEO)