NanoString (NSTG) 7 Nov 222022 Q3 Earnings call transcript

Good afternoon. Thank you for attending today’s NanoString Third Quarter 2022 Operating Results Conference Call. My name is [Megan] [ph], and I’ll be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, Doug Farrell, with NanoString. Doug, please go ahead.

good and operator you afternoon everyone. Thank

for on President and me CFO. today, financial the of Tom call our Gray, Earlier results our released Brad is we third CEO; our quarter XXXX. today Bailey, Joining the as as well

call, factors, statements focus that we as current strategic operating objectives, penetrating of cash macroeconomic our expectations about regarding the including are addressable growth, business and development make projections, orders, flows, and and impact operating future prospects for status and our future the expanding and may future recently markets, trends this forward-looking, statements planned During well financial and related of and anticipated success product factors. launches, results, as

and SEC in uncertainties, including these forward Looking those filings. risks our statements are to described subject

materially no XXXX Our the in financial Tom and those from update to results those. results projected, may our obligation discussing Later we differ and will be call, guidance. undertake

adjusted measures, as We our a prepared unless non-GAAP all detail Throughout in are press have calculation financial GAAP release. in be the supplement financial of otherwise will GAAP described call, which selected measures. measures the noted. The

well of Healthcare London. Conference forward in of having everyone to presentation the Healthcare also participating well the next using York, a be measures, of the page information building in many look home that limitations, have exhibits data. non-GAAP you as You find we week in with posted as collective release. financial for I’d like this tab non-GAAP adjusted GAAP under that relations We as each to financial Conference analysts and remind rather as rationale afternoons speak include in or to investor investors and can description, measure of measures press reconciliations Jefferies aid then. to or a Stifel chance To their in the our New models, we’ll

to like the call would turn to over I Brad. Now,

a for dynamic biology you insights. joining field, yielding us. thank scientific is Spatial powerful and afternoon Good

While of last a or more, will decade a few mix in the technologies key expansion discoveries next determine made. will which years will be

other position believe mover While emerging lead. partners ecosystem advantage, and Chip us are there biology our providers, and to that synergistic best-in-class Blue early spatial platforms technology, we

is spatial For instruments our placed the number worldwide. of priority labs this to leading research top maximize reason, biology our in

During the third XX great approximately on an generating spatial increase a for ago. progress quarter, of quarter biology instruments, we compared XX%, top this made approximately the orders same year with priority,

sold cosmic at and Molecular more have backlog We XXX valued approximately $XX Spatial million. than Imagers now a revenue accumulated

backlog for this have QX We XXXX. us increase to expect set for up and in robust growth

the quarter. in fewer compared the on for And XX orders the instrument. for expected captured During XX GeoMx QX, we our featured published world's CosMx using had resulted our provide scientific XX is transform that through in by similar in to customer we not has leadership. trending than one, even AI-based the platforms been was on we single-cell biology informatics The greater degree The description cover digital customers expected. standardization. journals. leading spatial interest customer of pathology journal imaging spatial is workflow towards scientific which whose also our of QX, mission partnership a ecosystem single-cell we the we leading of A GeoMx orders image imaging generated Images intense but two strengthened profiler to and at and GeoMx another was focus analysis the with orders to in through spatial advanced Visiopharm, to resolution previously

QX, XX pace. we CosMx the orders for guided orders We molecular quarter. generated CosMx spatial leading imager XX product a during our substantially category imager single-cell in Fortunately, capturing is demand at the a the and XX are had approximately exceeding CosMx we to significant

exceeded our overall we recognized we while spatial result, orders. instrument a As guidance GeoMx previously for expected, less than revenues

spatial shortfall consumable sales, the in revenue consumable which was contributor a our which While were system and life for the relative to QX were instrument patterns, pull-through was cycles, orders believe and per nCounter largest for customer decline experienced QX lumpy in annual a quarter GeoMx, both combination strong, challenging due to we a factors. ordering biology to guidance. macroeconomic We of

nCounter, installed seemed from demand in pull-through across driven base. dropped For geographies and systems be decrease and segments the older our in virtually customer all the to by

weakness ordering impact cases, newly broader trial in still lumpy rate. China. conditions, GeoMx, systems large to run large of [indiscernible] among pharma by and primarily relatively COVID-XX exacerbated market For full both small product including biotechs, seemed lockdowns reduced the the placed a a number spending consumable In weakness be ramping patterns clinical delays of was of and their customers, to continued

are are we for the clearly that shortfall, While and I remain disappointed beyond. set-up confident by XXXX strong a we

our priorities cost Importantly, we biology, structure. ensure aspects key the we have promising to that our recently spatial of reevaluated invest most streamlining while in

approximately we positions non-personnel in reducing eliminating result a review, XX this other and of As spend areas. are

are more outlook prepared the While the remarks. bottom his that portion we a these breakeven on achieve falls to substantial ensure of to line are especially positioned decisions if on consider more on our actions will and XXXX people, without need financial details expected for our we to will financing. that our these difficult, growth impact revenue provide additional deliver Tom during commitment our

for over our to Before of hand towards him, objectives strategic call progress I'd the like to provide the overview year. our I an

exceeded throughout to will start the objective leading our interest as an tremendous Customer with interest, our customer year. the Given molecular expectations CosMx update the platform. imaging on industry launch CosMx I in has

in ever with to As CosMx long-term than best strong new [ph] in and research. instrument adopted is customer chose specs synergy to about systems customers heavy. date, image a the RNA biology. SMI spatial and NanoString CosMx weeks the XX% previously performance discovery with transcriptome our capability to we of of research. and well XX% to confident that both GeoMx more one-third same cross-selling two-thirds QX, robust the be to adopt data from primarily first the purchasing near-term, of has including only are into instrument penetrated install showed of has CosMx proteins, confidence] GeoMx In done and One-third highest Meanwhile, FFPE customers assays, came to of orders expect our commercial capabilities us ahead, we who prepare and of of for platform metrics, expanding these instrument quality, the within going ecosystem and the instrument reach best-in-class we choice. phone challenging ship base CosMx opportunities bundle. all represents performance flex In the a by our to labs our new to two-thirds CosMx base suggesting CosMx in of expect instrument at helping CosMx customers. remain from all our the is tissue. whole CosMx spatial CosMx leadership translational for about To added a leads QX [Building new orders. account CosMx spatial more had orders GeoMx, we came spatial time forward. many continue order opportunities QX to for mix boding GeoMx

sites. commercial progressing is Customer updates the with these identified integrating weeks solution CosMx integrated concluding beta AtoMx several Our for first customer at well and and and we beta validation as and of interactions, through three AtoMx program And commercial overwhelmingly an instruments training preparing we've CosMx positive. software feedback incorporating shipments installed that has are been We're our in into are ahead. final systems rollouts. the the with

can't the we of wait to We systems [great expect the year the CosMx to and generate. these before ship between end X science] [ph] and will XX see systems

DSP papers, published growing build for their drove to and on XX focused particularly journals, drive and Scientific In months instruments as steady pull-through areas XX our vast of GeoMx, remains images of quarter. quarter. even mainstream the Genetics of of This of than remain broadening third perspective, ramping the time covers from that wildly bringing Cancer the in the generated to reaching human of state during resolution [indiscernible] than productivity or From immunology. is September across our GeoMx adoption translational XX instruments Our approximately for oncology customers of projects, discovery more as publications consumable to successful our second total, CosMx research, translational GeoMx further base the for using prestigious our research XXX GeoMx a installed spatial GeoMx single-cell Papers systems. the Clinical of underscores objective majority CosMx. two We pipeline GeoMx take researchers peer-reviewed loan Research. Demand We've after purchase. Nature more XX. translational utility a of researchers total into new had opt strong, customers research. XX utilization scientific third instrument researchers customers raised observed multiple and And

the pulp and weighed the grown, half has revenue in XXXX half first of sold have of system. group XXXX per consumable number GeoMx in of consumable the second instruments While large the activated on

bolstering our for on pipeline of are consumable field refocusing on going pull-through spatial ramp experiment forward We support our accelerate full and their platforms. biology primarily helping specialists, PHD projects application by customers design, our customer

within pathology GeoMx CosMx Visiopharm’s type GeoMx fluorescent H&E driven are those analyze generated interest. in of better partnerships understand and continue workflow. software, staining, the four-color that pull-through traditional on Meanwhile, these will combine be to of able We regions expect that Using images enhance and and digital using this will number with Discovery, benefit long-term. we AI to both in the Oncotopix present images researchers to invest GeoMx, the cells

the informatics bringing both technologies objective, unprecedented analysis. Informatics and and to We image AtoMx a differentiator. and essential competitive delivering to of biomarker productivity, highly broader drive discovery our compute visualization, AtoMx Spatial platform is will bioinformatics that capabilities for AtoMx is support high-plex us solutions launching platform. of believe RNA an our adoption that whole data biology of our expect and We spatial validation combination cloud-based enhance underappreciated third global experiments is require that research We're analysis, strategic collaboration. to accelerate protein which committed and capacity scalable these to storage transcriptome Spatial

launching receiving achieve the and becomes to available We AtoMx to their CosMx commercial customers expect of the AtoMx weeks systems. in ahead goal our first

out to during and machine loading exploring expect Visiopharm employs biology and half it's artificial spatial that connecting platforms. our to so data and further leverage integration be learning GeoMx AtoMx spatial both leveraged to artificial using biology AtoMx intelligence day can one. our are first structure, intelligence NanoString software machine our for AtoMx flexible of Visiopharm from the ready provide users so Together, of for researchers by opportunities XXXX. a roll We to

were being that through researchers that new pull systems sold. increasing fourth XXXX. are nCounter academic first were sustain researchers, hindered commercially stage base. inactive Our flowed and for especially of becoming older nCounter the by expectations. of as new objective as in new challenging a installed placements nCounter research among consumable of directions. Instrument take short our or is some by who number for roles placements an back a nCounter and fell GeoMx was the our and plus instrument we year-on-year pull-through which this bundles Consumable Europe was launched purchased nCounter both challenged quarter transition their originally XXXX to them to in franchise. QX in in age believe At lifecycle, decrease

has the systems new system of inactivated. as Growth relatively number systems active equals annualized older nCounter approximately nCounter While placed encounters camera number of XX the is consumable in months. last over the of active stable in being the pull-through being each number on flat the remained

to important to global nCounter the outlook over foundational and now like a driver, for While substantial an commercial great of financial balance review remains I'd not science results of channel details our to and generate do Tom the and support flow call to view we the continues our future as business provide innovation. the turn that growth cash to it year.

instrument Thanks us million, for and thanks reflecting $X negative our GeoMx forecast kind consumable indicated, was all spatial CosMx mix, foreign today. heavy quarter and sales joining for about million of the third of currency Revenue impact. and a lower Brad $XX.X

$X adding For recognized to CosMx, of revenue we generated approximately be periods. systems backlog QX, future in in XX million orders new for about

XXX over revenue X.X installed XX our was total As GeoMx was about about QX X.X our of was consumables GeoMx revenue with about was CosMx at reflecting GeoMx instrument XX, instruments X.X XX per new GeoMx the revenue end XXXX, September XXX shipments a XX approximately million, million. orders annualized installed installed translating to during system. quarter. instruments million. the of revenue consumables systems, was pull-through system cumulative QX XX,XXX stand At base new QX, and approximately million. backlog

was and about For during approximately XX our nCounter $XX,XXX consumables million, nCounter includes end was X.X nCounter service, QX installed XX.X X,XXX was revenue was revenue approximately instruments revenue XX system. which business, new base all million, instruments At consumables QX with nCounter million. QX, per annualized pull-through the quarter. the was instrument our of installed installed

cash or R&D of CosMx or shipments due and I'll EBITDA capitalization expenses our results future margin on basis, making, impacts an million, CosMx manufacturing QX XX% as by gross approximately R&D and in improvements. basis software biology product points first were million last non-GAAP investments increase biology instrument and Please adjusted QX an reflects including XX.X other XX.X was equivalents Inclusive product million, our the hardware X.X of reflecting the to certain consumables, with of are CosMx Turning sequentially of Adjusted cash adjusted stock-based instruments was SG&A be to were align our and refer detailed primarily personnel management commercial million, partially QX. and periods. amounts, development was XXX we expense for development year-over-year, well of XX%, by webpage and initiatives. manufacturing current removes capacity, the the of spend our volumes to adjusted decrease expenses, driven of year in items. margins related to prepared. exhibits as support of to and press depreciation, a XX expected commercial AtoMx at our advance million. capitalized we will of and platforms, and improvement investment compensation, non-GAAP September and to to was XXX.X continued spatial our These of other which provide compared of year-over-year shipment measures primarily are an consumables. a sales improvement made how XX% investments efficiency in QX in commencement on expense spatial Relations offset expensed related and Adjusted adjusted release, for Investor the impact XX.X information have posted in software QX costs of loss that primarily our as

our eliminating have also in key announced while cost structure spatial to biology. selected we that today streamline activities, maintaining We taken steps positions and investments by

of These business portfolio expenses, balance support our evolved, to business biology allow to our prioritize objective As these and sheet our mix technology’s decided steps initiatives. cash spatial flow better and our will operating while take our has will of our us steps operational current in leverage resources. we with to commercial investing reaching breakeven

report charge in approximately to million fourth of to a these the upcoming expect related We X.X quarter changes.

Turning to guidance.

of rates nCounter Our QX guidance pull-through assuming our QX upper-end spatial outlook system expected driven consumables seasonal reflects of biology and a and ranges GeoMx improvements. based revised QX the for our mix on with modest orders experience

between receive we shipment of and come XXXX. implying GeoMx biology derive consumables. expect expect XX%, XX revenue would expect instrument the biology million spatial XXX from to spatial systems to the approximately quarter, For to $XX million approximately sold fourth systems, Spatial over We come X an mix million GeoMx, $X total our XX% in of for to a to from orders systems approximately of with and of and cumulative from CosMx sales. million $XX systems first sales consumable million will sales we X from CosMx over

We QX expect XX revenue and revenue XX of QX to million. total million to XX nCounter XX million of million

to today's reflect which our outlook. actual have outlook, and updated We date our QX results our also to release detailed in is press full-year XXXX year

outlook our full-year reduction updated month's impact Our one also of cost initiatives. announced approximately incorporates

orders the expected XXXX to CosMx XX% of provides XX% to already the foundation XXXX. XXXX for ahead Looking revenue secured in we've XXXX, systems in growth and

our cost combined We reflecting reduction also $XXX guidance ending approximately forward expected in growth full-year's impact with revenue offering of and when next initiatives annual cash. $XXX XXXX a our details of anticipate loss year, usual February. provide process a million more for improvement with million in We expect to our EBITDA to look XXXX we

Now, over I'll to back turn the Brad comments. for closing call

Tom. Thanks,

biology best by in and We orders, current dual of are breakeven new is in the cash of resources. pace solid the objectives we leadership measured leadership year. that focused achieving to spatial having believe our our and instrument on on are a spatial measure, We flow market biology

With sheet, biology Our balance. and maintain trends in our in are balance the open strong we growth that, spatial portfolio questions. to deliver and our unique and for of we're poised for future to the believe XXXX. structure stage decisive streamlining nCounter profitability. market strong line now CosMx sets leadership action addressing successful With both our and GeoMx we'll business launch revenue cost with We're

Thank you. from Genuity. Mikson Canaccord the Kyle [Operator line question Instructions] of with Our first comes

now is line open. Your

that realignment you you, commercial I detail with Hey, forward? for just I starting any more mean, due provide why the could do XXXX? And didn't lumpy Brad, realign of lumpy, thanks the GeoMx by consumables earlier was for just of kind was quarter, how was ordering shortfall questions. the going like much, like guess, on the you here team mention prevent that in to some

the of are on us, we're consumable now up very in reps that to of of our base not that with question, one differences first passed We start first. second saw that and the terms customer. in the really created. shortfall those consumable the territories in We caught hadn't the trends reps to installed related that think and junior believe specific realignment senior that do and of Many market the issues was performance, we terms now more I'll force been have execution sales for we realigned – our macro etcetera. QX quarter. raised have the issues in realigned the are focused to lifecycle that the We between Kyle. behind that Thanks issues

it's different parse the which looking factors, tricky at apart. by sort are of I'd to three QX pull-through, So, GeoMx say impacted consumable

they're to build orders and often part of in and result, appreciate both quarter pull-through drop. where rate seen very as off a that the stocking in have new we've best repeat basis is evidence know experimentation pull-through [and sites early that's year, saw wasn't over that we XXX,XXX, GeoMx behavior. slowly lumpy this [ph] our the not for that seasonality first inventory it actual we We on come that of ordering The and year-on-year stocking over XXXX XXXX there XXXX of that lumpiness really the QX then burn run third explanation the in The for patterns the of a for third whether] reached strong is terms in and quarter some on very time. did

The is dropped second us most pull-through we we under is some one The within trickiest have can And and that when one China. macro. at for groups our new the sites. year-on-year pressure. that issue amongst and of biopharma impact most, look it model dropped know where macroeconomic And we the lifecycle the see companies to last been these the today

a takes site for GeoMx a ramp reach it its consumables. lot So, to of whole

the back, systems in half tends [indiscernible] overcome for selection, issues biology to to and consumables sometimes pull-through there's concepts equipment build as experiencing and on year, for we storage last they're solutions, their run sometimes and and look local that analysis purchase up of a of will business. taking overall, GeoMx in are to learning new needs first and first XX% new new its up sold Sometimes book need and to of logistical the year, when their large XXX% low ramping wave half about spatial of we to core to still slide do second Because run year customers the that this installed number long-term data of and ramped are a the during labs a spatial their projects new thereafter. systems of full promote rate. And ancillary we prep site capability such to simply plan what XX% activated have in second rate to of a very or be year its of then relatively biology

and will drop it's and So, these we're year. to across in next when the that on provide we future periods updates pull-through something it's to we to guide three study factors, but very assign allocate for tricky continuing different

was beyond. sounded confidence then that, thought that being year because into last specifically was heading of curious XXXX That readout a Okay. how might about order was the GeoMx staying just – if I – of and been that your NGS going earlier? just as thinking great. WTA kind guess, on that year have spatial the in is much like the And I maybe talk Thanks. about visibility one-third tailwind Maybe a franchise GeoMx also and forward, or health And headwind much the expectation? just and as of I that

readout front and take the new Kyle. in I'll again something now consumable WTA and question Yes. of the the revenue. for of vast placed transcriptome majority NGS represent of the like system. first account assays our of the XX% whole Atlas XX% systems second GeoMx are sequencers our

peer-reviewed of the CosMx either and or and want room so synergy think we still we with the strong bundle And buying complementary important doing GeoMx spatial published. a a papers, between fraction respect been oxygen for purchased when have sucking think of So, few oncology, a the a those with about GeoMx cell the today the who time. no CosMx are in of to now doing is it quarter GeoMx. speaks I right for for cover an out successful a instrument. who I the is lot now in idea a productive is the who The but have evidence this single science labs CosMx journals the really that's comes different of large This new to who's imaging immunology GeoMx are long-term, story. franchise. purchasing thing long-term We're a XXX the very already to We to months’ just and XX researchers capabilities. their have powerful are has on the capabilities, optimistic a a be translational also within who systems, small that of getting two very building itself. are do GeoMx value believe It's a people place. best of

one hop-off, All And not right. including XXXX until before Perfect. it be And on outlook, to detail the then provide going just the will know XQ I just you're I more on guess. much I of as lot think hinges model GeoMx that next call, kind here? but a those should pull-through, of mean, Tom we about I upon or how going of sort Brad, Thanks. we year ahead

Yes, rate we'll answer the detail we filed is that we aside ranges, I growth with. didn't make built obviously think provide we our first that more what already Setting heroic GeoMx. assumptions around

you numbers instruments that that to those it can GeoMx growth think it And well. what with assumptions. those repeats year conservative I get this – our year rate did does by pull-through it can what you assuming what get did to ranges and this for as competes

comment we'll more in So, February.

repeat, range XX% was to of think it [$XX growth a Okay, million] was to And for and got backlog just is the it. CosMx that XX% I [ph], correct?

the currently million dollar end the of million year, expect $XX and to that in we terms. by about be $XX

Perfect.

it. questions. guys. it the right, Okay. there. Appreciate All leave I'll much so Thanks for

Thank you, Kyle.

Thank you.

question comes Cowen. the from next Our Dan with Brennan line of

Your line now open. is

starting Great. Thanks taking guys. question looks off a guidance with year, for fourth just updated the arguably Thank little steep. you. the Maybe for quarter still the

this and over a million through in particularly visibility, XX in the little to we're X million X getting versus million XX million, like us walk GeoMx to Just quarter. revenues

implied what’s what's there? looks visibility in fourth give a Just right? kind double anything are placements of on and for the quarter expected about sequentially. to GeoMx sense, Is us like Just that it

Yes.

to is Dan, that million million X – inclusive to $XX quarter the I mentioned expect COSMIC to fourth scripts. would range of ship XX we So, that systems that the Brad $XX in his also

looking to range. when at that You that have consider

established which see end, still our a do range that the as for through, top improvement for of the improvement, QX. the when of that we XX% I GeoMx what is range that that been bottom-end end in that would the top conservative pull-through. a same which That at as lower range had you has will than range it's saw you we is assumes the you'll characterize And before. in the sequential sequential the that think GeoMx we've about range, that, be a old about pulls typical

up factors we've So, I for guide that think the incorporates those that we [ph] set planned place at] [we've feel confident in that new that QX. the and

it. Got

China You biopharma guys about remarks. and talked emerging some the in of

biopharma of you a remind quarter? China emerging kind is business point? for citing the you how like us since can Just that you're, as how weak did in And big that do

Yes.

underperformed revenue plan quarter. numbers. our large that overall represents year-on-year on consumable our overall has about also for cited up biopharma, XX% X% company, least we its biopharma of Small China have the about for So the another the may but XX% our during represents underperformed Tom about company. at China the exact of side, makes that also of the revenue and business.

together, XX% business XX% we – when you So, those that you I do to only think we but performance, our [indiscernible] facing know, of the – this was not the exposed markets add challenges. factor are, that to our impacted [indiscernible] have

put lot you for kind of it. first maybe how I that kind momentum wondering is of on there's look what Xenium's in you baked lot of coming and out a others the that's coming, additional and strong you book, the they XXXX, order obviously vision XX% orders great really into and much there. Just then that half And when that just conversion obviously, think about got we momentum are XXXX? the additional which now, have throughout market you of as XX%, in do got to see, is since going Like how does wondering, order a assume of of but you you Got guess CosMx the lot right sustained, hopefully year a you've can CosMx install? ahead into

would Yes, we in XX% not but I next February, it. built that orders I guide what year. a assumption for we'll CosMx conservative think on range, I'll XX% expect that we be got Dan, to repeat to that

So, you to growth make range, XX% XX%. articulated assumption to revenue range have do orders a the we rate growth CosMx’ to that in not on to get

not would Day you now, you long is you feel final maybe obviously [indiscernible] you you outcomes real should next not guys then when the business, that one, about the to able I mean, say, line be three maybe over any overall elements XX% years, growth, And excited. line good at, if company talk right say I look it. you've growing, strong three XX% that five wobbling [ph], do longer. place and guys but of next top got, think look still you three you guys are When five say, growth, which you Investor years, what think mean, about the collective a range to got CosMx to the do? Got [XXXX] It's to had top out, ago, longer-term. the How know, about

we're for Dan, inability should here I ahead. establish market, heavy revenue which growth – the rates a this a with in consumable going obviously market to in and biology is on a a the don't the we're GeoMx, pull-through grow recognize line for way meaningful secular industry to Brad. market growth very in this is call. spatial we company believe leading just But we're be getting on I learning on going transient and spatial started will think meaningful in drive long-term decade think impacts biology ahead. but CosMx, the this still years year growth the have some top We dynamics trend, to the

you. Thank guys. Alright,

you. Thank

next Our of with Arias question line Dan from comes Stifel. the

line now is open. Your

there questions. you has the Brad, why speaking, well in been is setting? spending consistency Afternoon, the above retracted? Historically guys. do Thanks R&D biopharma think average for the

been that's approval talking from systems pandemic been the starting typically the that collected, we in our we is the trial slowdown that samples to done of pandemic. because since amongst in recovery translational have academics recovery approval a has in It the occurred about forever time the has XXXX since we've COVID-XX seen about And in during That pull-through once the clinical have biopharma clinical downstream had trial relative on levels. biology Well, slower than not all remained the improved. pre-pandemic suppressed pandemic.

that the at effect the you I follow progression later? the talking like year that Okay. you're time. was if realizing GeoMx about you sort when it a something on pull-through were that But – in trying of over issue were quarters. like the I'm remember impacting seem of the this understand Is or didn't to earlier

has an the pull-through ever period. post-pandemic it's been GeoMx Well, impacting nCounter both and that issue since

by is context this as I biopharma enrollment issue. that terms translational the new nCounter It's guessed, think completed is we the have because have in we one would their a the than in have overall probably now, pull-through it dollar recovered in we that it of about and bigger GeoMx talked recovery not for would of nCounter the for stage lifecycles. we've not But those expected in that have absolute biology most magnitude began. seen trials would is

slow this an mentioned then just labs ramp, you and from are that Those suffering that bought quarter as then XXXX, what And XXXX, the newcomers instrument XXXX. that Okay. is to in last quarter the some users? of well pull-through existing early about

think devices I of XXX June were by there XXXX. so installed about or were that

here? folks] that just [ph] trending how to crowd you're the amongst referencing it [new is pull-through So, curious that compares how and

look to back, That XX-months sequentially the of we vintages from QX pull-through the they're trailing XX-months at quarter XXXX the the When trailing GeoMx all installed over look Yes. similar. being our versus third period from previous from quarter if was of across back very base. third just QX down you of said, XXXX long our a QX, like

there terms even effects. to we lower mature So, I ordering. had been a lumpiness, of know, while of mentioned the some this and, And systems factors you particular macro have quarter, other attribute out more the the that that in

me. for one Last Okay.

CosMx. on Tom Just

XXXX? just build in I'm little end minds about about our as talking there? sort crazy we for curious of As to max a orders continue know what in as seems need towards but you what right of now, pencil for think far backlog to the year just XXXX wondering placement here, I the would the

Yes, are I think this in about that guidance half year for to we that that we CosMx, orders so the deliver incurred, our it assumes backlogs. similar range

could to into take would some that movement that, about in talked about. number, XX% we'll I would XX% you'd about XXXX So, XX% explicit the to based that range Dan. XX% backlog. suggest that with we infer have February be more Obviously, on that go give give commentary – in XX but That's that around or

guys. Thank you, Okay.

Thank you.

line [indiscernible] comes Chase. Our from the JPMorgan of with next question

now open. line Your is

This taking the question. on for [indiscernible] Hello. Thanks for Julia. is

customer specifically and purchase throughout for say, instrument you provide regarding the CosMx, internal of the to you how perhaps or between equal the And which type it's by your your order could less expectations? to GeoMx dynamics preferences color So, into or clients, then customer more would more various customers? that does compare

– I hearing little question. trouble think had I you're your

GeoMx know for about preference [mapping] CosMx into customer was The and [ph] first talking types. different I the part

sold So, we've this to XXXX, going to few discovery back so far customers both I customers. GeoMx what think year, quite translational a we systems and observed

disease work are So, remember we tissues customers development – who researchers research, those on necessarily curing are are discovery who doing samples diagnostic or focused on basic of human drug not very for translational and scientific when those development. doing

last in So, customer shown for balanced year our two were is This customers strong fact, year, predominantly imaging. CosMx have very those GeoMx sales customers. discovering preference discovery against pretty to nicely And those a segments. going single-cell

the from Now, across given drop placing] the [ph]. translational interest seen year-on-year we [we’re two, systems balanced last mix strong year, in total customers, we've but meaningful GeoMx had GeoMx was number which of the a in remained

[competing] your you head but are growing [competitors] pretty the versus about is you new we're know, you think how next [That [ph]. durable for the spatial you And launched, second launches these seeing your the know, with, especially of as what entrants then, for CosMx to And number platforms in a in question new dynamics is, do start CosMx, Obviously, you forward? market, most product. helpful] a have with going those Thank [ph]? [ph] you. know, advantages

[now the [ph]. heard Tom] I question Yes.

it we where So, remain the has. market that at we we and of [ph] position about durable picked first, leading. the we I feel I to RNA and expect really currently advantages specification] mean, great CosMx [P leading the think, plex market the are

imagers a in RNAs of do do other the half most thousand we once, about different that. competing So,

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you. Thank

you. Thank

head. Go comes… question next Our

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Baird. comes The the that. Catherine next Schulte question from line with about Sorry of

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guys. guys. Hey, Hey, Thanks for the question.

me? First, you I think said that hear Can you …

Yes. We can, Catherine.

Perfect.

said do new older why you why? that of retired? within there sense stopping being for are have being users replacement encounter nCounter’s I Is are based being think active by systems is so, these And you about flat systems offset are remaining if tired, any systems or the number a dynamic cycle as research? accounts

bought probability and of year who that that can the in cumulative the we the and two direction are highly instrument one, age been probability the from of science use the longer other no two, major reasons up. another. with base imagine, it’s look we as nCounters some people purchased moves correlated from goes the it to of responsible moves gene the And individual on in installed experimentation for after system away our the science Well, a to perhaps systems the and goes has employee every inactive, going expression our across cumulative nCounter are cumulative we up And who at both where back of because see who one direction was area [indiscernible] you those different job with different when a placed, look science.

to the their So, of but systems there mean, the in a are direction move there I have from that increases. we that's that usable cycle systems life a different independent year, every life. possibility these XXXX around researchers active still is running totally assays,

consumable given it. pronounced well side about and your weakness more just inventory we've peers talk And seasonality through. Got maybe of pull-through, as some work then on heard on the

just you through around? trended maybe which levels likely just to throughout talk and activity the for those stick looked those a get of quarter to which how are sense and can of better how October transitory So, were dynamics

Well, levels. visibility we don't activity perfect into have

Our remotely their systems allows telemetry that are not the are. as of us our some competitors connected use to with monitor

Catherine. can't I to that question, So, speak really

a guidance not October gave, not I guidance. early recovery expecting think that in are built consistent that trends we are the which our our transitory is quarter say, the have substantial to we with and to fourth Tom

Got it. Thank you.

you. Thank

Our Tejas line next from Morgan Stanley. question of Savant with comes the

now line is Your open.

guys. Tejas. This the Edmund for Thanks is for taking questions. Hi, on

thinking right think way about some embedded it? year-over-year The your the for franchise me nCounter of given is, that observed the about nCounter flat would to year guidance? And first next you the and for as in question what's dynamics your be updated quarter,

which we the I at and consumables, in seasonal normal of other I range, was, don't the the the typically so what would in think prep quarter, the a range pull-through at the we [indiscernible] in had year. as can XX% about in mentioned at assume top sequential guidance a comments, for remarks QX of end put the fourth a you see pull-through, improvement basis in is bottom-end what on

that comment in assuming any reflects. that made the what just macro That's Brad the factors. with improvement not about consistent So,

built observed the we was where frame, ranges year. we that's no overall February next and pull-through XX% assumed next the the typical into rate to on for growth we our but as we year guidance so And what get flat the improvements consistent XX% QX time nCounter the more we'll this that was guidance give range that assume that for so assumes typically and instrument with year-over-year year, commentary

So there some that that in in experienced be but the built this those that would suggest preliminary ranges assumptions. pull-through any growth, were growth year still we would not

Got in the are returns as energy in U.S. it. upcoming of into about such the subsidies in-light and academic the other XXXX priorities And you want how but next hold guidance understanding you year EU? later, to thinking government budgets heading until

keep I commentary is think, would Seattle new got, biology our biology relatively think next academic hope I major changes you years technology a represents We in it, funded initiatives, Institute, there's just recent research field funding being billion have that We'll would an out you a then multiple that rate $X.X eye Allen on huge through factored And research the that's effort not in be to any spatial major direction well. in other. new year's spatial see, pretty mapping application brain run funding the in up know, major about growth over that that's or some can that's I one of a ahead. but here underway, in

the list. the does what is, the budget the top overall, be So, like new regardless technologies priority of application of my hope spatial will of at

plan wanted And if that. it. me. expand to in question about expansion that during Appreciating the headwinds or China final changed region, was approaches region, business, your and talked XX Got do so XX only in international the your is next months? expanding COVID back of region ongoing you headwinds that also fact about Appreciate the all China for that sales the one way? any I you the in of wondering further total from in plus And in think on your saw you the you plan has your you've exposure that fact direct the about the in X%

what a built Our prove we've do – can in haven't chance yet international the confidence cool over of that made when China investment we've the great expansion they plans have things, our the changed. we degree to Unfortunately, don't succeed plans investment reduce have high of down lockdowns that with not had we've will because of the team experienced and kind any rolling there. have they I when to But really and pace still provided of virus there.

Thank the very time. for much Great. you

you. Thank

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us Very replay today. you available, joining full the for a good. be as of Thank couple A everyone well in should transcript next as hours.

our that you The again. ID concludes conference This can code You XXX-XXX-XXXX. XXXXXX. dialing access by Thank call.

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