0001628280-26-017345
SEC filingChampions Oncology reported Q3 2026 oncology revenue of $16.6M, a 2.8% decrease from $17.0M in Q3 2025. The company recorded a net loss of $279K, a significant decline from net income of $4.5M in the prior year quarter. This performance deterioration was driven by increased operating expenses, particularly cost of oncology revenue which rose 33.5% to $8.8M, and higher R&D, sales & marketing, and G&A expenses. Operating cash flow was negative $2.5M for the nine months ended January 31, 2026, compared to positive $518K in the prior year period. The company ended the quarter with $7.1M in cash, down from $9.8M at April 30, 2025, and reported negative working capital of $492K. Management believes current cash and expected operating cash flows are adequate to fund operations for at least the next twelve months.
Champions Oncology reported disappointing Q3 2026 results with oncology revenue of $16.6M, representing a 2.8% decline from $17.0M in Q3 2025. The company swung to a net loss of $279K from net income of $4.5M in the prior year quarter. This deterioration was primarily driven by significantly higher operating expenses, with total costs and operating expenses increasing 34.3% to $16.8M from $12.5M in Q3 2025. The company reported negative operating cash flow of $2.5M for the nine months ended January 31, 2026, compared to positive $518K in the prior year period. Basic EPS was -$0.02 compared to $0.33 in Q3 2025.
Oncology revenue decreased to $16.6M in Q3 2026 from $17.0M in the prior year quarter. The revenue composition shows pharmacology services revenue of $16.2M (97.7% of total), TOS data license revenue of $0 (0% of total, down from $4.5M in Q3 2025), and other TOS revenue of $375K (2.3% of total). The significant decline in TOS data license revenue from $4.5M to $0 was a major contributor to the overall revenue decrease. The company operates in a single reportable segment pertaining to oncology services, with all revenue generated from contracts with customers.
Gross margin deteriorated significantly to 46.7% in Q3 2026 from 61.2% in Q3 2025, primarily due to a 33.5% increase in cost of oncology revenue to $8.8M. Operating margin was negative 1.7%, down from positive 26.4% in the prior year quarter. The margin compression resulted from multiple factors: cost of oncology revenue increased $2.2M, research and development expenses increased 32.1% to $2.3M, sales and marketing expenses increased 47.6% to $2.7M, and general and administrative expenses increased 24.1% to $3.0M. Stock-based compensation expense increased to $423K from $256K in Q3 2025.
Operating cash flow was negative $2.5M for the nine months ended January 31, 2026, driven by the net loss of $508K and significant changes in working capital, particularly a $5.4M decrease in deferred revenue. Cash decreased by $2.7M during the period to $7.1M at January 31, 2026. The balance sheet shows total assets of $28.4M, with current assets of $20.2M and current liabilities of $20.7M, resulting in negative working capital of $492K. Total liabilities were $24.1M, with stockholders' equity of $4.4M. Accounts receivable increased to $12.1M from $11.2M at April 30, 2025.
Management believes that current cash on hand of $7.1M, together with expected cash flows from operations, are adequate to fund operations through at least the next twelve months from the filing date of March 12, 2026. The company noted that should additional capital be required, there can be no assurance that management would be successful in raising such capital on acceptable terms. The company continues to invest in its TumorGraft Technology Platform and has four operating subsidiaries, though none generated revenue during the periods presented. The company is subject to foreign exchange rate fluctuations from its international operations and continues to incur royalty expenses ranging from 2% to 20% of contract prices for certain tumor models.