Standard BioTools (LAB) 30 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the Standard BioTools Inc.

Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to David Holmes of Investor Relations. Please go ahead.

good and operator, you, afternoon, everyone. Thank Standard to BioTools Third Call. Conference Earnings XXXX Quarter Welcome today Egholm, and is Executive call the Leading Michael Alex Officer. Chief Financial Officer; President Kim, Operating Chief Officer Interim and Chief and

At the BioTools financial XXXX. for results XX, today, quarter September released ended its the of close market Standard

and review initiatives. outlook, XXXX market and strategic we During and an performance, this will call, update operational provide results our of our financial trends

not future risks events call During occurred, the statements that our make required outlook us, will and available to circumstances operations SomaLogic, on the differ statements, be for materially including opportunities to by combined yet are uncertainties call, market the to update have may actual projections forward-looking or forward-looking statements substantial law. plans business except The are disclaim and with related for and this circumstances. these including as and outlook we that to about subject our for financial statements results that and events These we our synergies on based trends potential expectations from our combined to and business; XXXX any cause obligation may results; currently and company. information and current

our During potential between evaluating appendix non-GAAP presentation these provided earnings We press tables core on GAAP also and company. non-GAAP future today's consider performance release the We non-GAAP you reconciliation carefully believe baseline GAAP in results slides. operating the call, accompanying and is our assessing on are present performance. the continuing of basis. the The their in we in and a information today's as a We these equivalents, measures and measures measures evaluation non-GAAP to encourage own our are will some basis. to financial useful non-GAAP for of financial use a

management information the including presentation, that webcast updated to referring will within note supplemental financial today. Please be a slide

the of host replay question-and-answer presentation, will section Investors a along will remarks, prepared on session. with slide a webcast, website. the available of we Following Today's be

the Egholm, to Michael now would and like of to turn BioTools. I CEO call Michael? Standard over President

and David, joining you appreciate you, good everyone. us Thank afternoon, We today.

our we its covering want the to the its financial inception, is third performance to acting to will who call, Alex fundamental results, and growth. welcome Kim discuss CFO, instrumental Before Standard our has with Alex its to quarter I since BioTools quarterly be founding and for been XXXX.

at Operating role honed Chief As Co-Founder, Officer; acumen understanding the business deep of from a a to Danaher. a decade our operational brings CFO and seasoned Alex

Chief In inorganic heads and joining numbers. Officer, addition, Mackay, will call let's that, of will is now forma speaking discuss I which available our to results, Sean our pro With be Business answer who our growth to and be questions. the organic efforts,

up this quarter, $XX quarter $XXX third revenue the and is In sequentially last revenue, million year-to-date, From from we in in million last down XX% down quarter, but delivered versus XXXX. year-over-year, X% one to which budgets X% industry and like with conservative. Operating focus requires one, dynamic a deep on discipline tied improvement. this in operational for behaviors continuous purchasing customer CapEx remains and the backdrop challenged, environment equipment

Against these efficiency. We met team revenue targets accelerated and our metrics, the adjusted delivered. operational

on X cost year and into full SomaLogic now $XX operationalized a quarters synergies. an is the million team Our having integration ahead expected reduction, already

we in have XX% improvement XX% year-to-date in and year-over-year are already savings non-GAAP expenses seen fully EBITDA in a operating reduction to realized expected the While the be XXXX, in adjusted quarter. a

inherent delivery performance just and deeply or forecasting, has SBS, Standard on BioTools become Examples improved SBS in quality. includes new Business System, the focus embedded the power system, businesses. an of operating Our of improved

Standard delivery now X legacy years BioTools. of services and versus XX% delivery -- we on-time ago an example, products for For have XX% industry-leading for

highest-selling to our fourfold on instrument and our force new our downtime, top We be and improvement our in be This we base you focused less exciting on our same their also period. the going generating efficient the focused with have reduced expect line more sales even allows to research leads. complaints than both for of installed continuous customers benefit see culture will in be We bottom can believe still and forward. more per

$XXX With of we guidance cash revenue communicated million these our $XXX September profitable short-term investment operating as and million. and of results to of scaled environment, a previously million our of building XX, the year reiterating strategic we science life vision and to with current advance range well the XXXX full awareness in are $XXX full With are capitalized in company.

a At Standard scale. innovation consolidation science to bottleneck leveraging and overcome life BioTools, sector's inability top-tier company, building to we're the

goal drives reliability, customers performance and consumables, to portfolio and industry become on preferred partner Our a and shareholders innovators. that to share to We're providing instruments which and focused is the for a services, of platform alike. stakeholders profitability

objectives, full industry. a EBITDA profitability access vision. the targeting we capital, are we for capital-constrained and and importance execute the adjusted XXXX, With and position We further to the which year culture, recognize to team streamlined a infrastructure, operators company are breakeven seasoned achieving and fragmented our positioned will high-performance partner to this of consolidate of

from first innings, far is our on done are we but from if it in are just early our and However, not journey, optimized, we far way. and the

challenged world-class us. a in We of which team environments, one opportunities and the most strategy new have clear opens a for operating

results. Turning to

Our revenue at Instrument Services Consumables XX%, and was between third XX% the at XX%. Field Lab mix in at Services split XX%, at Instruments quarter

Our driven revenue was is, quarter-over-quarter growth our services. service by SomaScan offerings, which sequential today, chiefly

And X in to results quarter's double overall bounce this from mix. customer SomaScan outside currently, large we our To hard back a a then expand We timing saw top are revenue year-over-year. service end, last our the few grew account. pushing quarter from customers, favorable from digit

we our customers' sites use added our us our these sites. to major into of was Boulder located quarter, is expand a one authorized biopharma lab should the product. One our our which expand of deeper beyond strategy in the help and U.S.-based component footprint core of SomaScan In customer,

Another imaging or future and mass offering products: diversifier as all a partnered. our developed, and This is acquired which our service of leverages SomaScan, Service cytometry to CyTOF revenue Omics offering, our platforms facing with budget assay expands clinical data and will broader adoption the This capital the currently increase provides constraints stream research support. revenue services customers biopharma lab avoiding our while premium market.

working industry Turning which to where can. year-over-year and our to XX%, with business, by from we coming the have cleared, is impact down customers cytometry adjust Instruments our to budgets not instrument. headwinds purchasing mass unlock we're biggest our behaviors, higher-priced and hard with new their The

identifying Hence, and of profitable business the new upside additional unit value potential. is our will case and niche the study with are growth leverages fluidics and OEM Our can which it's opportunities, be a accretive bottom Genomics which SBS relationships working and infrastructure on consumables down instruments, to business, line. margin-positive, lean, including year-over-year, SBS we the a of culture OEM, culture. while contribution create

most products clouds, Consumables Consumable remains both our top year-over-year quarter. of in the continued organically revenue it's strategic product is our business. and in stream And attractive growing for a and profile. was the top pyramid margin the industry and at bright us the industry and product inorganically. our in This with focus a are most up spot attractive dark in an XX%

in with is platform, clarity, becoming, which the exciting of and thing with for what distributed we A vector sequencing new that do increasing is Illumina we major believe big next proteomics SomaScan growth the can on is example company. an Consumables solution

a tremendous scale ability unique powerful with competitively with recent is to And and platform confirm precision. SomaScan differentiated studies potential. upside the assay's

further unlock we proteomics solution, can this supplying our distributed With alternative leading the to be potential solution.

release the assay commercial Our with first on installed in more the partnership X,XXX remains XXXX, than track instruments. democratizing half NovaSeq base of full on of Illumina's SomaScan

is to has team, us more more time that customers, and we and originally it commercial envisaged. spent potential the clear headroom technology the Having technology now than much with the SOMAmer

technology. of SOMAmer for And to We offering, reagent we minimal making available as the are SOMAmers of today, new exploring XX,XXX the announced ways individual product purchase. launch single leverage viable a each the

and This in right in highly launch quality qualification all-important our unmet with prepare a an protein of the need market. for product end the care identification inside the and the product This and future. solution We'll meets Voice proceed process. ensure utmost and differentiated for an to full large Customer is protein of reagent

academia well of customers, applications attractive and delivering business we is As quarters beyond, not believe are our and exposure in individual we important pharma. the our as to we to time. several execute just focusing to on those vision evolve in What's the strong can that particularly equipped end date, next markets to solutions look We're have BioTools. over Standard to for we

into to will to other continue our we bolster capital strategically attractive we As portfolio, expand markets. allocate

reducing and thesis. is with unique of gross committed operating We to market have we're how current driving record growth, The accelerate and an a to track offering our initiatives, actively expanding consolidation margins our experienced team improvement costs. assessing many opportunities, leadership environment continuous

complete, focused call is I'll market not over Our Alex. and With remain end turn and the business, shareholder that, diversification, the to to now delivering offerings higher-margin a story long-term consumable evolving Alex? driving on we value. scaling

you all CFO. Thank our joining an on call Michael, be I'm to honored acting for as representing BioTools you, and thank call this today. Standard

since a As the function. operator bringing the the my finance into with business been jump and and I've experience inception, as company leader I've happy role as the to Michael knowledge and CFO, said, to been

remind detail you and period results provide the of the I on BioTools an only. of results that Standard our the will quarter same as-reported this close take the of to January in year, legacy additional us context. combined Standard third SomaLogic XXXX on merger since XXXX financial include and through BioTools want while more basis, of business X I results financial include operations our year-to-date the and in the

at much both comparative of to more think the meaningful we for purposes, look Therefore, results businesses combined. it's

will do be as so the reconciliation here. both I including results non-GAAP combined for our information, that financial XXXX. QX press deck today's to GAAP operations appendix measures commentary release BioTools investor our my to the SomaLogic I XXXX and pro Standard for refer of a results, of for on focus and to will more to Please speak forma discussing And and

on X. Starting Slide with revenue

and came year-to-date, and Sequentially, revenue million, to revenue X% quarter. compared in third the down X% our increased year-over-year, quarter versus the year-over-year, XXXX. XX% second million, was million up Consumables further. million revenue Breaking $XX year-to-date was quarter, down third XX% quarter up in year-over-year. down $XX third at Our $XXX XX% $XX revenue

Consumables SomaScan Access particularly expansion Our Illumina the our benefited authorized in and sites growth from Early Program. continued

to past, sites in critical discussed the our leadership. we this ability believe to new Lab Services market solutions for SomaScan is more to distributed worldwide we've having highly complementary is compete business. and existing supply establish As see We

sector spending capital with in compared continues million year-to-date, was as cycle, third secure grow seeing in as $XX life and well under just driven is the was by we're the are China. extended XX% $X our Instruments external quarter, This our in This funding. revenue weakness down our just to XXXX. under constraints as million year-over-year and But XX% funnel particularly customers down elongating as orders encouraged to sales spatial IMC the biology sciences platform. delaying we largely

$XX over million and Lab Services third revenue XXXX. was to down compared million the X% year-to-date, year-over-year, up $XX XX% in quarter,

quarter favorable The SomaScan a to new alongside benefited the timing platform. to from customers projects, third commit from few continuing customer large

while SomaScan by has base. are customers Lab reliant we revenue. of by majority impacted large And encouraged for on year-to-date a customers, Services customer projects been performance the our the from top these our broadening has fewer of Historically, few heavily been business our the

business and Beyond diversify our to year-to-date, our revenue delivered Lab us Services positioning base. we double-digit largest our expand continue as customers, well growth

impacted revenue year-over-year, million installation compared to flat services continued the million in Services offset contracts. on and $XX instrument Services lower third XXXX. X% was down by sales, over Field revenue year-to-date, $X was Field by maintenance just fewer quarter,

down segments, our revenue Proteomics lines, and XX% our year-to-date. our and for was product includes down which SomaScan, was the XX% our quarter X% By application IMC of CyTOF business, and

revenue year-to-date. our Genomics XX% While line, and the X% represented quarter down product down Biomark business, was for our was by and of X%

Slide XX. our on on performance Moving to operating

compared XX% year-over-year, gross a pro on in third XX% XX% year-to-date quarter the to basis and non-GAAP XX% versus combined in XXXX. Our forma was margin

lower positively in shift lower driven yield, a as to Our by and Consumables higher by scrap well impacted mix, was quality costs. by underlying relative Instruments, warranty quarter as third revenue improved

and to ability of year. are our to by the positive margin the There through as we gross our well to waste expansion encouraged continue improve But costs impact and of SBS lingering margin long continue we gross that rest onetime the drive run. this quality are activities reduce margin gross to headwinds over navigate as

on Moving to Slide our XX. operating expenses

versus quarter XXXX, forma reduction. pro basis expenses XX% the million is $XX a and in a in $XXX million year-to-date year-over-year Our $XXX was million million on which is non-GAAP $XX versus XX% last operating third a which year, reduction,

delivered reduction. quarter X, a from we Sequentially, XX%

quarter well that ongoing from third the our onetime of current in synergies improvement spoken of as year with cost result Our we've full accrual, a benefit bonus of our is annual realization a merger reduction in before, as expectations. line

and There restructuring with and X. of we'll will onetimers, in million and timing still the XXXX $XX few of million. full in at marketing year-end that quarter of come into half operating head across we $XXX integration be expenses non-GAAP expenses $XXX synergies target a our operating costs investments pro But XXXX run annualized approximately identified a versus million rate forma annualized first

a which $XX reduction. in loss On the compared adjusted million which Slide to year-over-year loss a third in reduction, $XX and a $XXX is XX, year, a quarter a our year-to-date XXXX, EBITDA million versus is XX% million loss million $XX last XX% loss was

This brings We to quarter cash short-term equivalents, with on restricted Slide $XXX XX. cash investments. and cash, third the in million ended me cash about

about total million costs. burn the third This Our XX% cash the representing second includes integration for reduction. $X a and in million million transaction, was quarter, versus restructuring quarter $XX $XX in

versus adjusted Excluding burn burn a cash $XX representing the about reduction, was million, adjusted million. $XX cash items, these second impact our of quarter XX% of the

in are the result coming ongoing of as synergies. burn reductions efforts We cost of a merger to our cash see our realization beginning material restructuring and through

growth to strategic to are of our We flow our support and cash positioned breakeven. with balance well business our plan the sheet

Lab fourth can the we move guidance year $XXX said, to million. to $XXX revenue To reiterating Michael quarterly lumpy we Instruments our as a from remind are as and/or million look quarter you, X Services full be quarter, our As can of projects to results few another.

mentioned, end working I've the some as through year. headwinds still as cost And we're we

to revenue, we long Michael. the committed and strategic are are to delivering revenue Back more you, over initiatives Consumables long-term However, profitable to we driving run, reoccurring growth.

at for all Thanks, as Alex. hand navigate Healthcare seeing California Wyatt Verdes, we you forward thank We call UBS London Healthcare at Jefferies look these Global for November November the markets. in Palos Wyatt? XX. Conference to I support you end . tough the your and on XX back of And continued to the on We Q&A. Conference Rancho many now

with [Operator TD Instructions] Cowen. And the Dan from first question Brennan comes

services you percent what there just start, This Is if wanted was quantify you on revenue timing for is XQ I in Kyle a Dan. way based? to maybe can quantify could of assay that?

as said had like few see pointed we have talked see services in see encouraging those, we our that, Services, Alex -- outside as good we as on SomaScan sign. -- Assay a customers, outside relied What or an the before And to hear about which we large historically And out, growth so. we you. SomaScan double-digit before, X

timing We favorable unfavorable and QX. had in in QX

headwind as shared year, before. large a hefty the have on have $XX For the from those million, we to of customers, order we $XX million X

broadening the see the Service to businesses. encouraging of a really it's So SomaScan as

are and and dependent just it the on all then samples the it to then getting is projects remind getting PO run. large highly everyone, these -- And getting

take timing if another. So headed. quarter-to-quarter back, or business like one step push the But a can where numbers way this we is you

it. Got then on guide. maybe just the And

Q-over-Q. You anything? Are that, year-end the flat down to think, in Any bit year. reiterated any spending saw XQ? million of earning budget from QX you your I for you for dynamics what a that flush million little $XXX The to guide, implies expecting or maybe different are $XXX midpoint year-end

came. really it nice We don't, it be would but if

today. here Anything recovery So on budgets add bit to not market a uptick we we're or of available in build that, new but a little becoming QX, Alex? to Instruments relying an do in on

a our comfortable shared here. to hit think We'll we've good summary. it's the I to actively funnel, at our and work we feel is continue with where funnel that you guidance

But As funnel comfortable we quarter provided. with or we've large the that a be or as X service quarter impacted have an can mentioned guide from and feel shift before, another. any instrument we've may project a we that

Matt the Stanton comes And next question from Jefferies. with

there for there about pick we to When if see broader easy bit demand maybe guys any start side. just weak instrument comps? industry. starting not just improvement? little to in Maybe talk -- you more trends see on you Can Clearly, green or could shoots a remain the improve, up funnel the to you're

And there? really tied you Is could called to dollars a out improve starting things bit going and over China. there stimulus Can to over just on in you unpack see China more we what's flow? potentially it when

versus of XX% Yes. No, if largely in we bit, XX%. down you it's year, little our I line Matt, instruments out And where sort And a you. good peers. year-to-date, think were last to hear up like with just are zoom

are We work still in niches. selling that high-cost instruments

a So we're tough in environment here.

alluded which through Alex And a quarter, as talking don't our be tailwind an but As we for until China -- expect sign. bright little looking better, encouraging in for see specifically looking coming to to back. are XXXX. China, certainly been China building, are QX, flow we're our to, it for a spot funnels the hopeful last we it team has up growth and Historically, it in will a forward about us,

dollars money to is leads shoots, flowing see maybe there, being And then but seeing generated are on beginning more green into biotech to are And we we us not VC again. translated yet. into it

cautious optimism, I characterize So would it as.

the And That's helpful. one of cost maybe a side, good really there. Okay. on lot then Great. progress

multi-omics, talked Service, SOMAmers, of update the strategy launch in script back May. areas you out of a single Omics kind in items your certain the the You within on some of called growth as

in, investing you're of about bit some just So can areas launches? you talk little a more the those

the launch and a then talked kind of launch limited on about SOMAmer I you launch, later. broader a And think single

that customers months What talk or out terms of about you be point XX successful now? in out rolling a So you to consider you'll if can XX just look product tend you any finer from to targeting? launch

question. No, Yes. great

now. out want So million I for my doing $XX And all team here. taking we're to the heavy thank lifting

So burn. significantly well we're cash really reduced setup with really,

growth protecting -- we backdrop. marketing are protecting We investments a our are and our sales investments, growth and in like as

And individual launched It's for viable we end, to the individual because not call minimal on that have product viable revenue. SOMAmers shipped so before product. a we reagents what we minimal

for. that site of them and you whole for infrastructure where -- not So there's it there, there's have the e-based a do set and SOMAmer. an will support on up, be individual protein use the then that eventually will limited a applications click can we that's number be then get And

to end, we'll again, to because then limited runway we there's And it's all have yet investing our still we heavily it our that we long And do in launch in R&D for believe, we existing all And have that that broader a are customers. infrastructure. rolled out ahead. a when fixed technologies,

backdrop the Okay. pretty it. And mean, million year, maybe start a understanding quarter, you're half Great. remains of think 'XX, call about out kind $XX to at fluid I then as back there. this we of

$XXX Any commentary you willing we to start to Instruments provide think you're annualize kind have at If we're directional will comps. as of that, 'XX, million. about easy obviously,

some start put about willing million to our Illumina in point think have base for we models we and $XXX app, a any but to ramping. growth finer Should as that year? next You dial on of kind you're

one, Alex let handle I'll that yes.

not time. yet. guidance on this We're XXXX at Not Yes. providing

in with our out very closing on the updated on and back XXXX to future is much view focus Our later. come strong. year you this QX We'll

It order, our Yes. where get on then or of $XXX like, way big can million. $XXX business so to a million one you top challenging sway a that And the we other. say, of -- I'll reiterate just our a environment. can remains guidance

relationship much, we heard we're 'XX, broader we you've term, as As access which customer our by much are repeatedly, a very in for base. think, with encouraged long we'd get the Illumina, -- to

XX,XXX It's We can the with believe far, proteins. we have that there. precision, the so best out scale, solution, currently solution only

doing workflows really new adoption this years, of than XX for and take term, I've you been want. -- longer rollouts good. long always always So and

expecting on Matt. next healthy Illumina So the the years. or if index year I helpful, wouldn't out launch over that's impact for We're growth, on certainly

next KeyBanc. Paul Instructions] question [Operator Our with Knight comes from

delayed projects This for that is in Or work It pushed Lucas behind is some sounds out you that get QX? quarter. all of on those say last recognized KeyBanc. are revenue projects got here will from you Knight at that now? Would Paul you actually that still there of like recognized some

and a characterize Lucas, not customers. the year. said I timing had of unfavorable our as said, script, year, this is recognition, would it last way we top per from we favorable I in X as se, matter timing the It's

million, $XX million $XX committed had a we headwind favorable they're -- because have just technology, or year-over-year, spending We very XXXX. a it's the not not to on

backdrop. the that's So

we the rigorous would of I application What point to, organization. across now talked have SBS is in also the as about script, we

can so the visibility And samples get and we have projects and large these run. them better much the when PO win to get get can we we when we when

timing. But guess, helpful. outside turning Understood in seeing the China. Obviously, in the of equation. weakness you to saw over China? you markets of instrument were That's I what on the side

We're new The backdrop in installed focus doing a there, there. Americas. the a we and particular, long Europe, a in rebuilding of for we'll time, tough funnels leader and And just like, the Korea, in Asia, macroeconomics. sort of on Japan rest been it's well

concludes Thank today's now for concluded. That you our The question-and-answer has presentation. attending session. conference

disconnect. now may You