ImmunoPrecise Antibodies (IPA) Q4 2025: BioStrand Margin Hits 90%, Accelerating Platform Shift
BioStrand’s margin surge and record revenue signal a decisive platform pivot for ImmunoPrecise Antibodies, as the company divests legacy European operations and deepens its AI-driven drug discovery focus. With operational discipline improving EBITDA and a robust pipeline in Canada, IPA is positioned to capitalize on industry demand for in silico solutions and scalable platform economics.
Summary
- BioStrand Margin Expansion: Platform segment now delivers near-90% margin, reshaping company economics.
- Operational Discipline: Cost controls and segment mix drove a dramatic EBITDA loss reduction.
- Platform Rebrand Ahead: Near-term divestiture and AI focus set up a business model transformation.
Performance Analysis
ImmunoPrecise Antibodies (IPA) closed fiscal 2025 with record quarterly revenue for Q4, reflecting the company’s strategic shift away from legacy wet lab services toward high-margin, AI-enabled discovery. BioStrand, IPA’s AI-powered platform segment, grew over 180% year-over-year, now approaching 90% gross margin, and is increasingly central to the company’s financial profile. This segment’s contribution is materially lifting consolidated gross margin, which reached 64% in Q4 (up from 48% a year ago), and 55% for the full year.
Operationally, Canadian operations delivered standout results, with sales orders up 83% quarter-over-quarter and new client orders rising 93% year-over-year, underscoring the site’s role as the company’s new growth engine. Disciplined cost management was evident, with operating expenses (excluding amortization and one-offs) down 7% YoY. Adjusted EBITDA loss narrowed sharply to $316,000 (from $1.7 million), reflecting both margin expansion and expense control. The company ended the year with $10.8 million in cash, up from $3.5 million, providing a solid runway for platform investment.
- Segment Mix Shift: BioStrand’s rapid growth is structurally raising gross margin and reducing dependency on lower-margin services.
- Canadian Hub Momentum: The Canadian site now absorbs both legacy and new work, supporting scalable growth post-European divestiture.
- Expense Leverage: Reduced R&D and G&A, alongside improved sales efficiency, are driving meaningful EBITDA improvement.
With the Dutch divestiture near completion and Lens AI platform adoption accelerating, IPA’s financial and operational profile is realigning toward scalable, high-value platform economics.
Executive Commentary
"Fiscal year 2025 was a standout year for ImmunoPrecise Antibodies capped with record-setting fourth quarters. With $7 million in revenue, our fourth quarter delivered the highest quarterly revenue in our company's history. We also achieved a growth margin of 64% in the fourth quarter, up from 48% in the fourth quarter of fiscal year 24. This improvement reflects the impact of our continued focus on operational efficiency and disciplined execution... As BioStrand continues this high growth path, we expect it to remain a strong contributor to the top-line performance and to support continued margin expansion going forward."
Dr. Jennifer Bass, President and CEO
"BioStrand is currently delivering triple-digit revenue growth with margin near 90%, underscoring the strong performance and long-term value of this asset... The significant increase in our gross margins over the past year was due in part to increasing sales from our BioStrand division, which has margins approaching 90%, much higher than our core wet lab business. We expect our gross margins to trend higher over time as BioStrand continues its growth trajectory and represents a larger portion of our revenues."
Joe Scheffler, Interim CFO
Strategic Positioning
1. Platform-Centric Business Model
IPA is executing a decisive shift from service-oriented wet lab work to a platform-driven, AI-enabled discovery model. The Lens AI platform, powered by proprietary HIFT technology, transforms biological data into computable models, enabling precision drug candidate selection and derisking early R&D. This transition aligns IPA with broader industry moves toward in silico drug discovery, where computational models reduce time and cost versus traditional lab approaches.
2. BioStrand as Margin and Growth Engine
BioStrand’s 180% revenue growth and near-90% margin have made it the primary driver of both top-line and margin expansion. As this segment scales, it enables operating leverage and supports a shift to higher-value, recurring platform revenues, reducing reliance on low-margin, project-based services.
3. Geographic and Operational Realignment
Divesting the Dutch subsidiary and consolidating around Canadian operations marks a structural realignment. The Canadian site has absorbed transferred work and is scaling rapidly, with integrated Lens AI applications now embedded in all therapeutic programs. This sets the stage for a more focused, capital-efficient operating footprint.
4. Commercial Traction and Strategic Partnerships
IPA’s recent partnerships—including a multi-million dollar oncology deal and collaborations with RiboPro and Vulture—demonstrate growing commercial momentum for its AI platform. The cadence of new client wins and expanded U.S. presence in Cambridge further validate the company’s go-to-market strategy.
5. Regulatory and Industry Tailwinds
Regulatory shifts, such as the FDA’s move to phase out animal testing, are increasing demand for IPA’s in silico capabilities. The company is seeing a significant uptick in client inquiries for data-rich, AI-powered IND support, positioning it to capture share as industry adoption accelerates.
Key Considerations
IPA’s Q4 and FY25 results reflect a business at an inflection point, with the platform model beginning to dominate both financial and operational outcomes. The next phase will test the scalability and commercial adoption of Lens AI, as well as the company’s ability to sustain margin and growth momentum post-divestiture.
Key Considerations:
- BioStrand Scaling: Sustained triple-digit growth and near-90% margin will be critical to future profitability and valuation.
- AI Platform Adoption: Only 5% of revenues currently come from AI, but inbound demand is rising; converting this pipeline into revenue will be a key proof point.
- Divestiture Proceeds: Sale of the Dutch subsidiary is expected to generate cash and sharpen focus, but execution risk remains until closure is finalized.
- Canadian Hub Capacity: The ability of the Canadian operation to absorb all transferred and new work is a gating factor for seamless service continuity and growth.
- Commercialization Milestones: Recognition of multi-million dollar oncology deal revenue will begin in Q2, providing visibility into deal conversion and execution cadence.
Risks
Execution risk around the Dutch divestiture, as well as the pace of AI platform revenue conversion, remain front of mind. Industry adoption of in silico solutions, while accelerating, is still nascent and subject to regulatory and client inertia. Canadian operational scalability must keep pace with demand to avoid bottlenecks. Finally, margin gains are sensitive to segment mix, and any slowdown in BioStrand could pressure consolidated results.
Forward Outlook
For Q1 FY26, IPA expects:
- Significant revenue recognition from the $8 million oncology partnership, primarily in Q2 as programs advance.
- Continued high growth in BioStrand and Canadian operations, with margin expansion as segment mix shifts.
For full-year 2026, management signaled:
- Ongoing margin improvement as BioStrand scales and the business model tilts further toward AI-driven platform revenues.
Management highlighted several factors that will shape the year:
- Completion of the Dutch divestiture and rebranding to reinforce the platform strategy.
- Further commercial validation and partner expansion for Lens AI and BioStrand capabilities.
Takeaways
IPA’s business model transformation is gaining traction, with BioStrand’s economics now central to the company’s valuation and growth narrative. Operational discipline and strategic divestiture have set the stage for a focused platform play, but the next 12 months will be critical in demonstrating sustained AI adoption and commercial scaling.
- BioStrand Margin and Growth: The platform’s near-90% margin and rapid growth are reshaping the company’s financial structure, replacing legacy service dependency.
- Operational Realignment: Canadian operations are scaling effectively, but execution on divestiture and integration will determine the pace of transformation.
- AI Revenue Conversion: Watch for acceleration in AI-driven revenue and the cadence of new commercial wins as key indicators of sustainable differentiation.
Conclusion
ImmunoPrecise Antibodies is emerging from FY25 as a platform-first, AI-powered drug discovery company, with BioStrand driving both financial and strategic momentum. The coming quarters will test the depth of AI adoption and the ability to convert commercial pipeline into durable, high-margin growth.
Industry Read-Through
IPA’s results highlight a broader industry pivot toward AI-enabled, in silico drug discovery, as regulatory and cost pressures accelerate the need for rapid, data-driven R&D. Margin expansion and platform economics are becoming critical differentiators, favoring companies with scalable, proprietary technology. Competitors in contract research and biologics services will face increasing pressure to either invest in computational capabilities or risk margin compression and client attrition as pharma demand shifts to integrated AI solutions. Early adoption of AI-powered platforms is now a key marker of future winners in the drug discovery and CRO landscape.