Shares of Avid Bioservices (CDMO 3.85%), a provider of contract development and manufacturing services for biopharma companies, had risen 10% as of 12:20 p.m. EST on Tuesday. The double-digit move is a response to the release of results from the third quarter of fiscal 2019.
Here are the headline numbers from the period:
- Revenue more than doubled to $13.78 million. This was slightly ahead of what Wall Street had expected.
- Backlog at quarter's end was $43 million.
- Gross margin was 15% for the quarter, which is a significant improvement from the negative 61% reported in the year-ago period.
- Non-GAAP (generally accepted accounting principles) net loss was $1.1 million, or $0.05 per share. That was much lower than the $0.23 loss in the year-ago period and compared favorably to the $0.07 loss that Wall Street expected.
- Cash balance at quarter end was $27.8 million.
Management also tweaked its revenue guidance for the year, stating that it now expects to end within the "lower half" of its range of $51 million to $55 million. For context, Wall Street was expecting $52.8 million in revenue for the year.
Traders appear to be squarely focused on the better-than-expected quarterly results and are shaking off the weak guidance.
Check out the latest earnings call transcript for Avid Bioservices.
Avid's CEO Roger Lias nicely summarized the progress that has been made over the last year:
During the past 12 months we have significantly diversified our client base, thus reducing risk and building a pipeline of future manufacturing opportunities. We have built commercial and operational infrastructure to support growth, right-sized the organization, significantly cut costs, and increased capacity utilization resulting in improved margins. As a result, we are firmly on-track toward profitability and positive EBITDA.
Overall, revenue is rising, the backlog is growing, margins are heading in the right direction, and the net loss is shrinking. That's a lot of positive developments for investors to be excited about.
On the flip side, the company is still losing money, so this is still a risky business. However, there is a lot going right for this company right now, so I look forward to tracking this company's progress from the sidelines.