Greetings. Welcome to the Champions Oncology Second Quarter Fiscal Year 2025 Earnings Call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Ronnie Morris, Chief Executive Officer. You may begin.

Good afternoon. I am Ronnie Morris, CEO of Champions Oncology. Joining me today is David Miller, our Chief Financial Officer. Thank you for joining us for our quarterly earnings call. Before I begin, I will remind you that we will be making forward-looking statements during today's call and that actual results could differ materially from what is described in those statements. Additional information on factors that could cause results to differ is available on our Forms 10-Q and Form 10-K. A reconciliation of non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the earnings release. Q2 was another strong quarter for Champions Oncology. The positive momentum that began in the fourth quarter of 2024 continued through the first half of this year with another quarter of positive financial results. Our core services business saw a sustained growth driven by our industry-leading PDX bank, our precisely characterized multi-omic data, operational improvement and strong customer relationships. Over the past year, we have focused on strengthening our teams and refining processes, resulting in enhanced quality, greater efficiency and scalability. The expanding R&D budgets in the sector have further boosted our confidence, leading to increased bookings and reduce cancellations, reinforcing our strong long-term growth outlook. A key differentiator for us is our industry-leading PDX bank, which provides pharmaceutical and biotech companies with invaluable insights for drug development. By continuously expanding our collection of unique tumor models and enhancing their characterization, we have built a rich multi-omic data set with significant potential for both drug discovery and development. This data set has always been a valuable resource for our pharma partners with access to model-specific data embedded in the pricing of our studies. With the rise of AI and its ability to unlock deeper insights from biological…

Thanks, Ronnie. Our full results on Form 10-Q will be filed with the SEC by Monday, December 16. As we've been highlighting, the financial rebound that began in the final quarter of 2024, has continued through our second quarter with revenue of $13.5 million, a 17% increase over the same period last year. We reported income on both a GAAP and non-GAAP basis, marking sequential quarters of strong financial results in fiscal 2025. On a GAAP basis, our income from operations for the second quarter was $700,000, compared to a loss of $1.9 million in the prior year. Included in the $700,000 of income were non-cash expenses of stock comp and depreciation totaling approximately $400,000, excluding these non-cash items, our adjusted EBITDA was $1.1 million for the quarter compared to an adjusted loss of $1.4 million in the year ago period. Turning the focus to our cash-based results. Total cost of sales was $7.4 million compared to $6.6 million in our second quarter of last year, an increase of 11%. The increase was primarily due to mouse costs, as the number of studies grow and even more specifically, mouse costs for humanized studies. Our gross margin for the quarter improved to 45% compared to 43% for the same period last year. Our research service margins will fluctuate over the next few quarters with some expected volatility in revenue and cost of sales, but over the long-term with the stabilization in our cost and expected long-term growth in revenue, we anticipate delivering research revenue margins in excess of 50%. For the quarter, R&D expense was approximately $1.7 million compared to $2.5 million in the year ago period, a decline of $800,000. We have a renewed emphasis on our bottom-line results, and we've strategically reduced our R&D expense. While we continue to…

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] The first question comes from Matt Hewitt with Craig-Hallum. Please proceed.

Hello. This is [indiscernible] on for Matt Hewitt. First off, congratulations on a strong quarter. Could you please provide any color on the market dynamics? Other CROs are saying that there is some lumpiness in the funding environment. What are you seeing?

Yes. Thank you for that question. Yes, so we definitely -- it's still not back to, I would say, where it was a couple of years ago, but it is gotten better over the last year. So I guess the short answer is, we are cautiously optimistic that the funding is coming back, certainly from the big pharma, there is funding from the biotech sector. There is definitely more investment in the biotech sector. It is not where it was a couple of years ago. But we are starting to see it opening up and we are starting to see signs that it is improving.

Thank you. And then are there any new tests or services you could be rolling out to drive further growth?

Yes. So as I think we mentioned on the call, something we have been focused on for a very long time is value in the data that we have created from the beginning of the company, we always knew that the data we were creating was very unique from a biological perspective. And where I think for many years, people were focused on longitudinal data, so they would be interested in 100,000 patients who have RNA expression or some type of expression of a gene. We were always focused on adding rows and rows and rows to the same tumor, the same patient, the different treatments, different Omics, whether it's transcriptomics or genomics or proteomics and on and on, just to try to understand the tumor and what was making the tumor turn on and off and we did that for many, many, many tumors. So we went very deep where everyone else went long. And I think that now with the advent of AI and kind of we're at the right time now where everyone is interested in those type of data sets and those are the type of data sets that are going to provide a lot of value going forward. So from that perspective, we feel like that's an area where we are going to -- where there is going to be growth, and we are going to focus on that area. In terms of our other core business, those continue to be strong businesses. There is a lot of interest in both in Vivo and Ex-Vivo studies and a biomarker studies, and that's the bread and butter of what we do.

Thank you.

[Operator Instructions] We have no further questions in queue. I'd like to turn the floor back to management for any closing remarks.

Okay. Thank you very much for joining us for our quarterly earnings call. We're excited about the progress we're making both on the core business and the data strategy, as well as the drug development subsidiary. So we feel very confident about the growth of the company and we are excited to give the next update in 90 days. So thank you, and have a good evening.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.