Cerus (CERS) 30 Oct 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Cerus Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to Jessica Hanover. Dr. Hanover, you may begin.

afternoon. good and you, Thank I'd like us for thank everyone joining today. to

are of slides today's part simultaneously webcast, As follow. we displaying can that you

can Kevin call from ir.cerus.com. With You Officer; Vivek President slides Relations Chief Executive the at Operating Cerus' website Officer; and the Chief me Cerus' Obi are Investor the Jayaraman, Greenman, Green, Cerus' on access and results Financial describing September release today press Officer; issued President. Cerus a ended business recent and Chief company's quarter our the Carol for financial highlights. Vice XX, third Moore, XXXX, Cerus' Senior the announcing

presented in for adjusted in historical of uncertainties XX-Q future customer expense presentation involve results and You prospects be a or that activities Examples a today's statements. BARDA announcement our we access supplement They financial September no results, our discussing product funded we guidance, to website under performance statements and our call not can potential for including release, flows, XX, our statements are facts that These non-GAAP shortly. be replacement expectations company including to forward-looking materially. the identified risks and facts. future of adjusted than at could measures trajectory, meet events, should of measures, other Form growth also and future like call, forward-looking copy accordance EBITDA. our Factors will product those supply and of and and and XXXX, you and expected considered value described submissions this new non-GAAP remind forward-looking are cash the are to to and product related on statements this expansion slide to on and in relate with to forward-looking the operating include make differ update XXXX under statements the Risk in and our www.cerus.com. I'd events GAAP. some launches, expectations non-GAAP agreement, ability obligation product file our levels, our non-GAAP and be our performance we undertake to will regulatory not historical operating for cause demand, planned and growth will measures expected anticipated a revenue press today's EBITDA our to quarter financial ended These and performance which We that statements. On actual duty rather

then with remarks the discuss Obi Obi, Greenman, reconciliation Kevin Obi. And financial presentation results recent and the to business highlights, of Cerus' refer and Chief a to from and the followed comparable lastly, XXXX financial release today's our of financial Executive closing pleasure For my to non-GAAP available for it's review and now Vivek to measures, slide measures by our to from most opening press Officer. introduce remarks begin today on President GAAP rest expectations website. We'll please

Thank everyone. open positive as you, of a both full Jessica, the XXXX. year commercial on financial well I would like to outlook our our strong and the good performance afternoon, with as for increasingly and quarterly fronts, review call

QX business the we our are our product. are this Complex positive in business will product remarks. With additional segments. the trends account gaining revenue his IFC Vivek revenue or the guidance for U.S. provide drove INTERCEPT in for capacity supply Our our color trajectory, to business raising in we increasing result, the these product North at American platelet that time momentum and same is Fibrinogen both

on the well operating executing we financial line are Kevin on cash year, flows, targeting been as as hear both bottom that the from as you full the have We also measures will for shortly.

to vertical added Together, the virus disruption pathogen reported for and U.S. become of of it OROV. community blood month, how across Advancement the released XX U.S. and rise preparedness or virus Europe, supplies. the At is the of noted for to inactivation recently call our date, our targets. quarterly Association epidemic from cases the Since to in and need gratifying consistently the a the been discipline has transfusion business, our the rise deliver the business model operating ReCePI Blood of on see ubiquitous dengue there for oropouche data. Meanwhile, scale evidence our Meeting Eastern Biotherapies, the our exists when pathogen the to Zika blood reminding able AABB, expenses, deferrals against EEEV, and growing Annual travel-related our regarding and date. With enthusiasm this the our inactivation around leverage similarities and earlier those heels high financial the the level, emerging have incidence and increasingly of the we've transmission multiple $XXX experience. viruses, Phase collective for in ReCePI potential while evidence to the the or we contract designed U.S. or X notifications a data the to further that warranted. rewarding program with in multiple diagnosed pathogen recent presentation clinical up officials the sitting argue clinicians the states and product recommend of transfusion blood positive approval that are quarterly to the from geographies public virus viruses, donor only for our to participants manufacture potential arthropod-borne Center to of through And center the the and health CDC The EEEV FDA them. And of these OROV and from truly RBC precaution session have see trial inactivated launch INTERCEPT centers ongoing. U.S. the territories in components in remains of been AABB to in transfuse no Houston meeting local Convention last who was the of million listening that acknowledgment regulatory in transmission of of and new encephalitis transmission hospital the OROV and III plenary thousands is equine at the the with BARDA services customers

and announced for in are collaborating cells month, Mark front, potential enhanced strategy CE our red SUD, development or closely blood we INTERCEPT to Europe, this body, our for the with submission new define notified RBCs. earlier TUV as a On we

with initiatives INTERCEPT moving broader RBCs. to is speed we a As candidate. In activities we to seek that our full data we filing fund future not the before, which our while closely to potential RedeS disappointed readiness are anticipated filing intent RBC designed assessing was are the in further authority, by BARDA, U.S., and product both ReCePI competent approved a our development, patient for for from after the indication the ahead partnership noted include trials commercial extending INTERCEPT we clinical regulatory and with are ultimately

for the that, for and quarter multiple for next-generation now year. is discuss I outlook our we Europe, recently production our platform will our to this TUV Vivek over platform We marking completed to our months next our believe to treated the LED of that have step our also submission XXXX in customers will for provide geography. make to INTERCEPT last commercial of our plasma new turn benefits well regulatory as to third the upon X in that the this illuminator effort the Based customers, eagerly extensive as results from progress available technology call in the awaited of routine. With platelets and feedback in and

to and return a Thank our commercial you, organization. Obi, we to afternoon, growth XXXX, good committed everyone. across Entering

and am XXXX, of half trajectory, first the third that exited I continued a growth quarter. to we the report we were we on trend recently back pleased in As completed that

see that growth As way, we led to of reduced. franchise with estimate all encouraging and we U.S. continue XXXX, the are the X/X in our nearly strength to periods IFC platelets U.S. respect platelets, of to hospitals prior in distributed business. With U.S. platelet our pathogen U.S.

blood make We and views strong supported posters INTERCEPT-treated support hospitals, INTERCEPT platelets are We the adoption the month. The earlier encouraging with platelets while by option to who adoption. this presentations, patients the as interaction INTERCEPT already activities to XXX% peer-to-peer meeting plenary with centers annual of was and at who INTERCEPT their adoption this was of incredibly customers, for ramping believe symposia witness. continue AABB good marketplace customers are and and safest platelet headway at both holding

in markets, saw out Our also team Canadian, and of IFC facilitate had adoption European platelet of we the dynamic to a was at good number international and This meeting, played high-volume users their too U.S. attendance share to continued the INTERCEPT quarter, simply with where the introductions number Eastern eager of were saw positive customers Middle experiences within they we and with INTERCEPT. Last significant.

glove As currently enable demand our with closely We increases have shipment the us quarter. their in issuance new to will sufficient state. production at were third calls, in partners hospitals they do IFC-producing we many can blood have of not IFC we BLA quarterly working deliver discussed in This center to monitoring hand center and ensure approvals of blood X meet supply. see to and in enable are an broader interstate past the pleased demand

adopt As with they hosted great PR at note, Head benefits on clinical to they took beyond and she chose get XXX% in above IFC. Hospital Barnes-Jewish in AABB awareness a to Of laid where IFC recent we standing-room-only to the and deciding and there. Laboratory Louis, meeting pathway of go utility St. to operational described drive in they've workshop of the further experienced platelets, Services education the financial was that the the out Missouri IFC. Most how and encouragingly, all

inbound IFC and inquiries to see the we product. by increase encouraged for We about are an in the continue demand

outside growth encouraging strategic July most adoption the to key seasonality Nonetheless, Looking see slowed and notably of summer U.S., our over experienced in geographies we holiday expected are things down the in our key and August. for excited period, and about franchise we the markets. in prospects EMEA INTERCEPT progress continue in

posted progress international you as make key market development keep will on initiatives. we We

global customer along to the U.S. able want were all challenging Eastern to recent QX. within thank dockworkers to meet is supply requests and the ensuring situations customer our impact logistics strike and continue I while navigate we that Seaboard, Lastly, who chain mitigated. acknowledge teams Despite

supply not in support to hospital customers. always ensure logistics blood and be to the want timely curtain all most As in behind do importantly, team hospital explicit the sales only for getting navigate our to rarely we customers I team any year, The recognized, helping work that and teams global able the and my the were product, to this products and customers short-dated manner. discussed to center with a but fantastic are did they chain so gratitude concerns earlier work distribute their also

Kevin raising the evidenced that our are a is on injection to the once benefits for clinical of for and your support to for update year, like customers our on guidance What's our interest new exciting most to to is to trajectory. look our technology. and realize our the become forward I continued you again growth existing on of advocates updating product business thank results. As efforts. I'd you and pass-through you full call ] the we [ confident and financial both I hand by revenue progress, over see in

thank us. Good financial you the of our joining I'll Vivek. XXXX. call, and discussing On today's be Thanks, third for afternoon quarter results all for

an prior-year XXXX the end period. continued the revenue Canadian quarter our of financial As growth North product to quarter. In to the the platelet provide we be This period the revenue product to during higher business the XXXX. we to up well. in rates were third geography the the second of growth third EMEA prior-year year-over-year around to as revenues sales were stable quarter, to compared up over prior-year EMEA, by some by first represents at the $XX exceeded year-over-year to driven product XXXX. FX color Also, slight impactful, quarter basis goals of now from start, XXX% important of beginning sales quarter and of within growth more provided the entering we of contributor the at basis, months we product year, the a quarter relatively this for our our contributor tailwind on revenue XX% year revenue In near XX% Services $X.X of for slightly the and approximately major FX million in standing posted prior-year existing Blood QX, million results revenues the year. To million, to points. XX%. period, X% the from the the for I'll With period. depth product prior-year U.S., of related X benefiting progress XX top less of $XXX.X posted out million, the line third consolidated levels strong for On product orders rates accounts. brings third and were American also by a $X.X IFC set the

ReCePI completion product period. to the in Phase The primary clinical government revenue $X.X not included trial $X.X of driver and QX totaled the prior-year In addition compared in our million contract was for our for U.S. guidance, our III revenue to decline. million the

contract due supporting contract QX BARDA will agencies. enrollment including increase look prior a from government up overlap our government levels participating ramping with RedeS will of As which site revenue development factors, our the ongoing other in to at variety clinical new activities expect and work we the ahead, study, we with contract,

As to the the reimbursement a reduction, are our milestone-based further included revenues of revenue pathogen reminder, FDA in U.S. Department recognized government and our contracts agreement under with our IFC. for lyophilized contract the our agreement blood with with BARDA, whole Defense as

Turning profit now to and our product gross margins. gross

last margins and unanticipated compared basis driven to gross margins the costs quarter the freight. Our warehousing of Absent balance the to third continue for in and the chain from for points prior-year Product we to up increase QX gross were product XX% from factor, year. primarily during in million supply $XX.X period, levels margins for third close improvement XX.X% the will gross remain QX was million product XX.X% was year. The of this gross lower lower profit $XX.X of XX.X%, reported year the expect XXX that any quarter costs year-over-year. relatively by an and QX of

in of $X.X were our $XX.X the last XXXX totaled the $X.X in incurred expenses restructuring from operating year were the compared of of the million million million the million, restructuring X% quarter. QX the ReCePI $XX.X QX during included in not Included R&D non-cash our for primarily million third and down driven Similar XX% stock-based QX this expenses which year third quarter expenses, $XX current results, of on, expense type, completion charges, Moving implemented totaled QX prior-year operating and were period. XXXX. the which operating million $XX.X decline last quarter to compensation. midyear effects the to was expenses By specific by clinical QX year. of of trial

sites fourth in as movement R&D activities and as expenses covered significant modest begin new we expect our contract. for ramp don't a we increase BARDA we expect RedeS While see would the quarter, to our under enrollment

million to during compared Third $XX.X the quarter $XX.X expenses were period. million SG&A prior-year

increasing We expenses. leverage from generate continue to of SG&A levels our

to and remainder for that SG&A anticipate of expect swings XXXX. not continue do the in significant We

bottom on line in Let's now the adjusted non-GAAP focus EBITDA results.

same year. XX% QX for line, share reported per to months attributable in period improved bottom loss million to the loss diluted to to share attributable $X.X $X.XX X the the for $X.X On net compared significantly XXXX, $X.XX for September Cerus prior ended XX, the when Net compared prior-year by million to Cerus or period. or the diluted narrowed per

operating for the period. of QX is of we're the non-GAAP generating, of compared $X that EBITDA a measure strides operationally. On non-cash XXXX net $X.X making to less significant a adjusted the a stock-based compensation million nearly positive the prior-year suggesting mentioned previously, As of adjusted was leverage QX generated loss our business basis, EBITDA for a million loss than

EBITDA are pleased deliver EBITDA of with our the in as whole. For positive adjusted EBITDA and XX, and corner posted X increasingly million now the XXXX to ability $X.X confident result adjusted the ended adjusted months a a positive turned we September have for have year-to-date. We're

adjusted expected EBITDA of achievement look expected with we in same to goal. on generating from which revised stable a margins, of XXXX ahead, our contemplated the As operating we continued growth contribute our all anticipated expenses more are guidance, gross expect and the leverage to our the focus

positive with to flows, the On $XX.X cash sheet. associated flows. short-term of the continue cash the operating of cash million deliver on third cash equivalents investments balance Operationally, balance sheet a we quarter and ended we and cash, position

in quarter XXXX. Cash used flows XX, million ended period. to For operations for totaled generated million the million quarter, cash cash from of $XX.X from the we prior-year to operations the of used during XXXX for the operations million flow September months third X of third compared $X.X operating of cash $X.X compared positive the $XX

We cash we will to as continue focus balance of on health flows sheet. our our to the work improve

guidance. to our now Turning

we Obi year. in are both at from top the confident heard our Vivek, point in this you've As and line increasingly

from million range a the the $X year end that, prior And our the million product our XXXX $XXX of million. like year of to tandem, raising revenue $XXX we are back raising $XX IFC closing we of bottom million, XXXX guidance In over $XXX range to range up so now to are million million full $XXX to million full to new call to from to for of some our $X million. With revenue I'd $XX guidance to turn Obi remarks.

Thank you, Kevin.

customers on forward most and Cerus X expectations that in with the to goals It honor have technology, standard as care in need. Thank out we XXXX, to of now like be on you globe a growth turn with just relative your we well about where year. We continuing we across this the we when importantly, questions. access safe they confidence the set a XXXX of enabling to blood in looking operator of execute direct company are to BARDA the at are I for to interest continue focus a left in stand you With and as these call have beginning reflection INTERCEPT meeting as feel pleased transfusion an the goals our organizations to is the for our months U.S. ambitious will creating need our the to customers the of it confident and months. Most patients our that to a is we to over new for sharing couple continued partner Cerus. very medicine. in know as

question Fitzgerald. Ross with Cantor Osborn from first Our comes Instructions] [Operator

This here. Ross. off start Park IFC just to business is I about talking on want for Matthew the

additional at X you do meet anticipate additional feel this to growing an current BLA manufacturing on needing do Now Or capacity comfortable approvals, that you've demand? levels? added you

want you handle Vivek, Matthew. this? do Thanks, to

question. for happy be the I'd to. Sure. Thanks

with meet for can to to centers grows, demand continue ensure to the is grow will demand as to to that such, partner anticipate well. the demand quarter as we'll more to grow certainly that blood addition continue produce we we we're we'll the of BLAs X recruit that supply growing. continue we with to work IFC. We add anticipate blood centers IFC. in But continue as seeing and and continue to manufacturers And The significant

guess Great. That I X then And sense. me. more for makes just

does you there positive LED the AABB. What or legacy decision illuminator, timeline device? the the here? for is gotten approval like feedback And have With with noticed obviously, a replacement timeline look from receiving guys -- an you've

Yes. Matthew. Thanks,

So launch of in XXXX. right LED in now, blood illuminator a as assumption this sort foundational the we this we're targeting the across throughout business in And use of is platelets the plasma in and see XXXX now, States the we'll in a Europe. that more and for to the out for illuminator Europe we're centers. Right putting then submission really in in XXXX for for the new process our platform And that's frame. United be rolling of a 'XX LED multiple and PMA time place take likely together still the customers

getting the improve lot a a allowing it been really of It's to also on our of partnership important development So program. in And the technology of really going with an excited innovating future. the process forward, we're customers this overall, us the this market. is our product to about element blood in center

Our with Instructions] Stifel. next question Mat comes [Operator from Blackman

you out new growth wanted primarily from the recent going or and about the of potential both? what's opportunity range. think and on deeper guys we or This into the what's Is start IFC today this customers there? existing in number versus for should couple a to is driving momentum Mat. I on accounts are your with Colin for How accounts guidance

you well? Yes. mind question. this Colin, taking the for as one would Thanks, Vivek,

Sure. I'd happy to. be

is the both answer new growth that within acquisition. XX% customers as question, as customer were well existing this depth to from calendar We added customers roughly year. XX%, estimate So, coming of

their last hospital. generated So of other them those one are And to departments. St. of across Louis moved certain are new they of earlier departments. are of year, the clinical IFC value IFC referenced customers. that now started clinical and clinical out sort XXX% evidence that of I then the as And But then started Barnes-Jewish those in area institutions, that many of all there

new continuing seeing production that with passes. is we're sales our new hospital And in and So and to onboarded on to really, our good as focus partners, growth hospitals month organization for are then XXX% customers getting existing targets fill getting funnel the each both that areas. and

we it's think category. great provides runway this So see because us significant for that to therapeutic with

going That's at to million really helpful. year And around exit $X $X quarterly a it does look run like is the rate. to million IFC

the the a million we growth in be particular? the how drivers for And for XXXX? reasonable ] thinking IFC So $XX year What in about something number? point key next in are starting range, year should [ is full

today demand. sort think why going bit for on Yes. growing Thanks, not a providing demand we're can you that we more I just upon call the But in the Colin. to Obviously, of we're give color be to seeing IFC Vivek ability XXXX. guidance increasing supply on little momentum based and revenue our now there's believe

Yes. Thanks, Obi.

think that that largely get fact BLAs issued drivers referenced last a in of gives their and partners once they our BLA I time We up the both team be ramp-up supply they product. That and greater all accounts there. the drive for the blood base were But increase will new bit There's quarter. also to the same. distribute manufacturing centers the little to production the will X know around remain opening of growth. start so conviction

faster were attended loath now therapy a and that really of what podium --taking on seeing into staffed, like if they're line went AABB IFC. through conferences where with amenable they're they COVID the Certain starting to presentations top projects. you stronger budget what about take that and hospitals as and as adoption to maintaining well, they're hearing the in hospitals continue financial crisis fully terms drive And the at recovered really tremendous So technology. then we're feel recently is to in what will at staff we're new issues they're dovetails about new at hospitals, XXXX. And having staffing, seeing like rate. What a are growth with they hospitals like on position seeing projects more think

dovetailing together from Johnson create tailwinds next Stephens. Jacob of with all what to Our meaningful these things supporting our business. [Operator question believe we comes So are Instructions] are

it another my on implies IFC kind of question not And kind early congrats a for mentioned what year and mid-single-digit and you you've apologies off growth Again, nitpicky. rate maybe in thoughts a address to at I'll after months may the it's why XXXX guidance, but just jumping answer. or -- you'll could that that understanding preemptive XXXX, be the the if just Obi guide for bit quarter any echo the the it couple for there? best I implies midpoint up of But a that's fourth the of maybe too frame point of quarter. in next why and look But to XQ, the

like for perspective XXXX. for think year, Yes. really of I and of we we the we growth looked months provide the I sort of to guidance in But months. the give of mean sort can wanted I why the optimism were Vivek of sort this on think our a the X just sort left best projection quarter, as going did into you for that what at remaining looking sort X

the what with head bit mean, accounts new X good we will this have what October of Yes, down it. open. I at point, nearly a into we as months out holidays. Things orders think will you remaining, and most there, little insight slow are done I captured into

positive, until XXXX. year. But I reserve to a encouraging So place IFC, to about add those fundamentally, of key some to and all be to getting it about We heads demure, from year the about down that what's as the then committed experiences more look is confidence 'XX. Not here hospitals things trending again after outlook how early novo may growth we a 'XX which as and and quarter we'll initial third tailwind QX. another a into levels these to now returning as solid inventory gives feedback of detailed at mentioned of of if but de openings we're QX XXXX. sort earlier, customers, we'll in me too you our move do right a to have entering next close pieces year and their foundational well had what fact with put discussion with early to challenging performance us But the is account are of we'll the we're this quarter were in our QX able with sprinting think in we sort the bit

And on it. just in some your mentioned next-gen of value it. customer then, upon as customers think from just Can about about Got this adoption next-gen approval? base and interest feedback illuminator good talk for their illuminator, you Obi, the you proposition potential this we

they've side, adopted reliable system. in down with then technology what that our have customers, the out. they you operational is this imagine, this LED-based Illuminator Because kit system but them but our also our and something our might would very for current can INTXXX new that and something will, a we've equally a really on our of the fundamentally rely day at day both that their device, with supply. Historically, if assurance the blood We platform, into that moving supply with chain you that had illuminator. whatever provided it in, means XXX% with had the the wasn't think shut was to depend since they I is also for supply and many continuity reason, chain performance side markets, as on also solid on the if robust, on

them this And of units for plasma them platelets so use And we of we were do the for really something their of as and is to context as supply decades, that make developing of then we it the input, how sort problems they're chain not to regard is to going about with create were processing easier they do feel in just with state-of-the-art looking and we at how continuity. future every in hundreds thinking day. have

numerous think ease it and the going a gotten so COGS so throughput if for potentially who think with discussions we've the the that feedback as in into on thing we've uniformly The profile customers I receiving feedback that that and So something impacts about how operational a built had from is the improve mentioned our of day-to-day ease-of-use do it is perspective. And have platform positive for you will, we now foundational illuminator also to them evolve and staffing on the the -- this. LED 'XX. great it just it's easier sort that be and process, that European increases was I will the we ultimately I we the have as just it's of system flexibility well. forward technology use, how ultimately iterate but then

Our Instructions] next comes question with from TD Jennings [Operator Cowen. Joshua

momentum. see great on One It's follow-ups. to IFC. continued Two

if more there just I get BLA the that capture the but of BLAs approval approvals. are of wanted we didn't X, Are -- are BLA sense partners rollouts where future blood any to Sorry a in months? XX this, expect pending? Should other center next announcements

[indiscernible] IFC. it again, Thanks, And over Vivek turn Yes. on Josh. to I'll

sufficient as is most approvals the of headroom is recent to as fall to we because always once 'XX we to center BLA production in there a other what's there terms podium and papers are vary. timing was we there to applications. Obviously, come us single partners exciting center on about that the together And but can publication we of broader be who IFC. anticipate for the Congress demand. And continue more with the have beyond. process terms do new knew in submitted that BLAs you So in production sets data with well approvals, -- through that driving release, these -- of But allow blood experience supported were presentations that believe pulling both that that the were capacity being to be something were being flurry that was on we got laser-focused information and in aggressive accepted, that to going season of

solid that wanted doesn't bring run too thing product lockstep my position But I like of make to work into to knew make want in far we we're a we and So to "Hey, that we we're we say, the could one the feel So ahead we'll institution." sure pretty in would to other. to this continue right start a once up people position. monitor now, in that offer sure

thinking to have wanted and a replacement wanted LED And And that is a to in, illuminator. box. on approval just check just I there believe this just gross I about refresh that gross margin Excellent. system, but hits get kicking this ASP is the margins? will cycle impact that on just once accretive for an

Josh. lot, Gap] Yes. Kevin Thanks a let [Audio I'll

haven't Yes. Josh, really commented. we

LED the higher. don't result, it's I that slightly as bit illuminator. said, COGS a yet for higher. be the since is think slightly The we ASPs will approval With be premature technology And the we will newer. have expect a

overall a booster that. as to shouldn't in margins, think of gross I expect you far As and itself,

that that will margins product our expect to on the business. be We neutral current margin

it platform expansion iterations future, provide with However, platform. product does the a in future and of us for potentially geographical growth, because that

your hopefully, So answers that question.

kind IP there? This side. on protection follow-up is just quick does. timeline my IP just And but the some just that too, It of can extends you refresh understanding, of one

course that business. the filed extend, of the that for we're this Yes, IP the that over obviously we've And we X last system for well. a it developed clearly globally the building as of moat does And there's think, it's years. lot I IP

IP the So global it product improves our the business. for profile for

comes question Massaro from next with Our Instructions] BTIG. Mark [Operator

for on Vivian Mark. is This

revenue, just And a looking good should just our more I government BARDA your the remarks So How the I flow so about was clarify, the we baseline rate models or on contract into light. why XXXX. wanted think on newer QX contract here? a to should to run little just heard bit

to Yes. lot, do And that? a handle you want Vivien. Thanks Kevin,

Vivian. Yes, Sure.

in the We year-over-year the lighter of had let's because contract isolation. revenues study completion. So XXXX take

more over a up. XXXX QX, $XX will RedeS the but that, several and with at begin As will revenues same conclude, XX time, the years. same the up activities with agreement. in course ramp will will new new well, ramp earnest. There's while in up ramp really the and be begun, start that ongoing will new not guidance and RedeS complete, the in to but that -- sites will At production, expect time, trial of we'll months. we're in then committed XXXX, the contract we the plateaued begin XXXX giving over the next under activity million And the expenses they have associated contract the the BARDA they less as so XX on under XXXX initiatives level certainly At

Understood. then on one just Perfect. And the bottom line.

little year I which to looking on front, Is guess, seems looks nice that We you trend conservatism a reason I bit like at there. the conservative what's there the that guidance some Or saw It QX? maybe. think there? adjusted EBITDA just, did any change driving us. beat for full leverage maintain

do No lot our the variability revenue our we're neutrality parts we for in want What Vivian. gross there, than expect out. Yes, and expenses leverage conservatism of guidance, that, there's growth slightly in real expect reason and expenses. There than operating ourselves. obviously with and to of margins know, you get a and is continued we sustaining guidance as the to moving don't ahead as is Well, we would you increased that better margins, pointed though. was other out tracking operating

we as that and future. we want much are direction trending hedge to optimistic possible. But the So the right as are in about really

[Operator comes Our Bonello next Bill with from Instructions] Craig-Hallum. question

question of similar a to you of got, context what bit just in not little guidance. but A the

forward whatnot. are cash Just, forward? given sort we about million you of and capital $XX be are here? takes But to variability What of working there'll a think puts sort Kevin, rate? can sort Obviously, and as us of tracking the help flow sustainability run this move of cash from the point we flow the quarterly

opportunity all cash QX/QX the where the leverage end line, out ask generate made. that to back OpEx our that to I was the function we've operating happening. of That's and to margins was our growth year Bill, we of top investments we in go calls you And continued flows. getting a this would having Yes. of thought management

we where replenish in position balance the be XXXX raw our inventory a of over sheet. that we'd played felt and having materials look certainly as and In That that to components has without of kits so finished help into would the those that, flows. like cash you out course built addition, at had much we we could some convert

that said and growing expect will capital a the demand. in time working But XXXX, at we'll working We meet operating be that in have just the rebuild line. capital offset natural run we at to investments bottom be also also with will rate business the to inventory where those

I that should just sure comment as qualitative looking and pulling on long at cash So as what generation that term, balance we're make far we're levers appropriately the want and don't that we're managing our remains flow that you expect healthy. to to sheet things

fully degree expenses? product of being we the -- of do terms R&D what -- as do think we you think that development relationship? do to because And BARDA bear of your almost in And that of is uptick, of to what burden additional funded degree

Well, it's our certainly true a funded That's especially -- by with a of agreements. R&D significant BARDA. majority are multiple expenses almost today BARDA

also We lyophilized the initiative the and FDA blood whole with have the IFC.

LED done are expect swings don't items be in and We But move The overall So there's expense. that, today. as that revenue are not move XXXX. R&D that planning component R&D to mix we're is as think our foundational our providing forward. that like going and remaining future the illuminator. I initiatives growth of a major guidance drastic we're into we expense trajectory, continue we will not to

cash and thinking other cetera? expense or other going in but forward of Okay. -- we again, guidance, that just about of et should And terms be not then capital uses

the CapEx to that. And on the clearly, have offset We'll It's for initiatives maintain commented COGS then look reduction opportunities and we as balance line that of credit any on, working expansion the to that capacity leverage capital sheet fund that revolving to initiatives. continue year-over-year and for down that we items at X/XX/XX. cash would exact beyond we ended we Well, reason. probably

Lastly, are I'd the extent those to we devices, say investments be beneficial geographic have that opportunity the we that geographically, high-return to think expansion all shareholders. place expand to are would

time. questions remarks. not showing to any for turn closing to further Obi I'm the And at this any call back I'd over like

Craig-Hallum, Well, Cerus. after Stifel, interest in look Stephens Thanks and us and we'll be all which in to you this Later investor again for your we by new in thank conferences the hosted again. for you joining speaking today year. again forward participating with year,

Ladies today's does and gentlemen, presentation. this conclude

disconnect now a may and You wonderful day. have