Avid Bioservices Inc (NASDAQ:CDMO) stock fell 2.82% (As on September 7, 11:37:21 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 23. As of July 31, 2022, revenue backlog was $157 million, representing a net increase of 43% compared to $110 million at the end of first quarter fiscal 2022. The company expects to recognize the majority of this backlog over the next twelve months. Gross margin for the first quarter of fiscal 2023 was 25%, compared to a gross margin of 37% for the first quarter of fiscal 2022, which benefited from the receipt of unutilized capacity fees of $3.3 million. Excluding the prior year’s margin benefit from unutilized capacity fees, and the current quarter’s increase in costs associated with the establishment of our cell and gene therapy business and ahead of the mammalian capacity expansions, including the company’s increasing headcount and incremental depreciation from recently released facility expansions, the first quarter gross margin was on par with the prior year period. Net income was $1.6 million for the first quarter of fiscal 2023, which for the first time starting in fiscal 2023 includes a provision for income taxes as reported within the company’s income statement, as compared to a net income of $6.3 million for the first quarter of fiscal 2022. Avid reported $115.1 million in cash and cash equivalents as of July 31, 2022, compared to $126.2 million on April 30, 2022.

CDMO in the first quarter of FY 23 has reported the adjusted earnings per share of 4 cents, beating the analysts’ estimates for the adjusted earnings per share of 3 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 19 percent to $36.69 million in the first quarter of FY 23, beating the analysts’ estimates for revenue by 7.92%. The increase in revenues for the quarter can be primarily attributed to an increase in manufacturing revenues as compared to the prior year period.

The company has reiterated full year revenue guidance for fiscal 2023 of $140 million to $145 million, a 17-21% increase over fiscal 2022.

The company’s commercial team signed multiple new orders during the first quarter, totaling approximately net $41 million.  A significant portion of these orders are with new customers, contributing to the ongoing expansion and diversification of the company’s client base. These orders span all areas of the business, from process development to commercial manufacturing.