NanoString (NSTG) 3 Aug 232023 Q2 Earnings call transcript

Thank you for standing by. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the NanoString Q2 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. now of call Investor will Farrell, to I President Vice Relations. Instructions] hand over the Doug [Operator

Doug, you may begin your conference.

Thank you, operator.

with as CFO, June XX, On President results for we call me quarter Brad financial is the ended second Gray, released and our CEO; Bailey. well Tom our XXXX. the as Earlier today, today our

expectations results, this we and anticipated success may and growth, including flows, and financial product about future future call, our make business forward-looking, recent instrument operating penetrating strategic status During of manufacturing for operating and addressable trends regarding current and factors, capacity, focus related statements our development markets, cash expanding statements that future our projections, orders, objectives, are and prospects offerings.

risks our described to including statements are SEC and in subject those uncertainties, filings. Forward-looking

may XXXX. differ in statements. forward-looking undertake our QX and those update projected, financial will discussing from Later to obligation materially be and results no for Our we any this Tom call, results guidance

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

Conference as Investor We to to of many this participating such in measures reconciliations We've tab of Conference with a presentation the exhibits as everyone to the in the find adjusted UBS week opportunity speak page California as are their Genomics Today, Canaccord selected investors having for building Information press You can like Growth following of well remind Boston under next home non-GAAP to Financial data. our we'll description, and models. financial forward then. week. the posted other in you as or look rationale the non-GAAP be I'd release. and measures in the that our measures and of afternoon's GAAP limitation the to well using Relations due include analysts and

the turn call over to to I'd Now, like Brad.

to Good the happy Doug. operating joining July that you today. results you, expand on and afternoon thank on for us opportunity strong XX. preannounced I'm Thank this have to we

was year our QX more increase prior revenue We first performance Our of record across with the of surpassed $XX milestone high biology an revenue solid XX% achieved nCounter about a and nCounter the over our as both than spatial and important spatial an our for time. franchises. biology revenue million

Our financial is confidence and intact, outlook is business the our trajectory our in of high.

We specs use platform. I'd and performance unusual for court commercial attempting of advancing to the recognize like competitors their a over the of to lagging on last months, several focused period competitive team believe instill customers staying noise. focus in our fear the to away globe Genomics customers the Germany that from in during decision science the supporting have next and a attempting regional our shift to been to Zenium around of our

are the Our by commercial IP points team believe our customers. tactics and our have QX the customers XXx, distasteful not best carried We professionalism of these ground. the proof held services distraction high results the with that understand and have our dispute have members confidence that and promoted that shaken themselves

an Now, our strategic objectives provide towards on the I'd progress our year. update like to for

increase objective the our market. XXXX first biology for to Our is penetration of spatial

sequential across and the demand GeoMx. consumables, increase CosMx both orders instruments was healthy During quarter, both spatial second a for and in biology including

an spatial We XX% more second increased spatial by Our base over of biology the increase with year. year. XXX over than systems, quarter overall an prior about of the installed last revenue XXX% ended

that the growing further of second CosMx market to business than potential sales the customers cell our instrument NanoString, rapidly XX% our were base. expand imager growth our Our penetrate the customer caustic and spatial to More spatial underscoring to primary new we molecular single during remains of for biology. quarter the significantly driver went as

CosMx of healthy Academic NIH for XX% account our funding orders and about bodes in to researchers and continued continue growth market. government-funded this new well for

the consumables, an CosMx the the refine these processes long ramp our capacity to data term. scientists growth combination train atomic local to swiftly, and scaling continue streamlining efforts field and rollout also manufacturing for driver important used install uptake by our over is plasmic We up Our we that engineers process We're service will analysis. of Cofins platform, users. instance, informatics instruments accelerate to believe of which spatial downloading are for and the and simplifying the the for application our access of

our expand Customers to ability to access the through to remain our assay on are to analyze, targets access acquired RNA the in program next extending plex plex have industry-leading service can We and shipping to technology lab simultaneously CosMx our that competition. track XXXX our enthusiastic lead expect fall. to XXx molecular RNA offering Flex of the offered RNA X,XXX by in beginning begin our begin to about in the about of year, the assay number we first quarter systems assays CosMx

data average context per publicly neuroscience available data unique commercially and sets can transcripts week, ability unique over segmentation mouse cell detecting provide XXX showcasing Last we cell X,XXX the high genes. RNA These released a to highlight set new an and at over of sensitivity, our data algorithms. CosMx our best-in-class which

highly a demand, ecosystem. remains of our new and remains biology platform, and core CosMx spatial GeoMx garnering the majority shiny productive attention a part While of

base, a in We which installed revenue. continue consumable increase expand our meaningful to resulted GeoMx in

XX cells a peer-reviewed for spatial resistant month or spatial has maternal-fetal date. research to doubled with many cancer identify Our installed XXX treatment. following over One of examined using nearly in last the have generating biology. applications publications in line and there a A X emerging a a created months, GeoMx In biology. been cancer contribution treatment pregnancy. base is GeoMx research second of last the Atlas cells drug Journal interface Transcriptome showcasing each drug time field of different to nature, of to paper the the making The body publication so, GeoMx Atlas of the during Whole body substantial publications spatial approximately

A third disease continue the such nCounter translational we Alzheimer's study alleviated nerve and applications solid see can our Meanwhile, GeoMx stronghold as pathology neuroscience working growth and synergistically with outside examples be immuno-oncology and organ areas research discovered to factor of that transplant. receptor. in in is

we predictable QX for nice of Our million, second year. revenue We the a over deliver setup end balance have $X of guidance to objective is the exceeded upper our and growth. the by

to shipments year As scale Cognex expect installs our increase and progresses. the the quarterly cadence of as continues, we

and Cognex sufficient meet generated QX half in about which CosMx million, growth carried the backlog estimated our we backlog Our into represent in higher orders deliver The in to second for XX% is balance hand CosMx currently expectations revenue balance of the $XX predictable providing instrument preannouncement, our incremental was visibility backlog any our at additional year. the revenue likely than the well of of new for bodes over to beyond. XXXX through end revenue XXXX, and in XXXX ability the

strategic objective path accelerating cash to our third on The remains profitability. team laser-focused breakeven. Our towards to progress is demonstrate

top down prior year line by adjusted operating the about strong the over million against of backdrop growth. Our expenses $X QX were

fourth year profitable we half We well of we with expect quarters, to working cash we positioned our business the resources. the to our capital to are convert that in second improve and as EBITDA third our current manage into in back significantly believe growth and the

positive update wrap since of overview an we our some prepared As I'd litigation brief of like our updates provide to up Timex significant the ongoing comments, with a XX our on call. May investor genomics, including

Delaware Harvard. unclean we that July, position position our claims infringement the important believe ramp, an the ultimately, in XXx a and U.S. to Datastream to court at effectively the and substantially funding the to this fact Having and against in secured both prince and monopoly. transforms Harbor explained TMX ruling us suit patents achieve First, license Delaware patents NIH equal Harvard proceed issue research being issued That ruling to NIH is us U.S. Court's the The are We believe Genomics attempting lawsuit is now patents that the licensing, from weaponize those in require Harbor. to with port. nonexclusive and against issue that against XXx's The litigation. the an lawsuit our Court parts of allowing the and Delaware IP which case hand the under and Harmonic improves false funded to antitrust antitrust we non-exclusively.

U.S. noninfringement X to In ruling invalidity addition defenses of prevail for litigation. existing NanoString and coffee the to our the of in additional themselves, patents paths created

in have hand the that bad and TebexGenomics under cannot at the defense, if seats, simply to position, enforce patent rights faith conduct can or we says engaged which related affirmative an the matters unclean issue in case. our forth exclusive put Harbor involving unconscionability they First,

as Second, out enforce threatens antitrust Harbor XXx that and would competition. we that an build represent monopolize in and an patents win can cannot attempt on basis, to these

take of full place were I'd update June year CosMx These European of the also UPC. Union. specific for of of or the independently a UPC litigation injunction the its XXx's the in for will key UPC able contract on proceedings, whether of The and NIH of be patent events requirement litigation The September the Germany. we awarded status on on detection next to like countries Patent in XXXX. focused operates are X hearings on within EU-wide port litigation patent established Unlike expected muni a hearings our evidence Europe's in will as sale plans systems, present RNA be to licensing. XXxgenomics merits patent The the including be you nonexclusive for to should preliminary European Unified and in was the on proceedings port Europe. a this form

UPC the results speculate and a will this go for fact September intend or immediately. rulings While October. hearings will The to by the but believe end interest is how our benefit the to facts if are UPC appeal play, our expected legal we the be with the exactly way, impact scheduled evidence early and X that the known on we arguments. don't that cannot the September law are on side, our consider preliteraryan We of on public to junction XX the

Before provide over handing update on an the to team. I'd call like Tom, leadership to our

CosMx Our on launch at end period led of of the Chief effective decision move critical from the Commercial a the through John to August. Geres, our now team and commercial NanoString Officer, entrepreneurial John strong made company has invest well him his a service the activities final Jon congratulate future and at his company him on endeavors. for quarter We formation. NanoString, and in and to time fed plan of wish a has

who have experienced expect recruited begin end We John's Commercial shoes Chief of August. at to already the we Officer, an filling

a publicly another Our is officer corporate traded and new currently CCO company. sciences life

he as as current obligations make the has announcement his soon we'll his disclosure employer. fulfilled So for

take Tom, through of our us operating please details the results.

joining us for all thanks today. Thanks, and Brad,

revenue over For total second XX% $X year-over-year above the range. guidance million quarter upper the growth of our XXXX, and $XX.X was of million, end

more For with about acceleration selling was instruments We average our Biology representing growth Spatial in of $XX.X XX Spatial price was and CosMx QX million, shipped revenue business, of revenue spatial about $XX.X year-over-year. instrument XXX% than million, reflecting over QX $XXX,XXX. XXX% year-over-year shipments. total growth realized of an

instruments. As recognized each installed XXX noted be will instruments included deferral CosMx portion instrument future base compute about in spatial during of reflects We service with a that to spatial as our QX XX of storage our spatial QX, installed atomics instrument as data initial ASP amounts periods the in customers use of the growing call, revenue sale. CosMx and approximately revenue

models, during to the As a instruments can for number install as ship. we compared differ of of reminder, assessing or quarter number updating instruments those a the we

over the $XX at accelerating to been at for average Revenue revenue revenue and yet hand installation. as and shipped of reflects and of to is end backlog customers commence selling as to to revenue their quarter be upon instrument their XX to QX recognition instruments at was based June science. Spatial waiting orders eager during on have but calculated that million CosMx ship based instruments on we total recognized prices shipment compared biology are and as shipments over opposed the million $XX value are

expect manufacturing in quarters. ship to of CosMx’s number to available increase, to continue instruments to continues capacity grow As we the coming

Given expect we the new we to current will carry pace substantial continue of CosMx into XXXX. orders, do backlog

QX, $X.X and revenue the ENCOR X,XXX was million guidance over million, revenue the revenue continued million, for $X.X reflecting was end stability consumables. instrument and orders was all compared and GOin of to was longevity revenue nCounter consistent base nCounter approximately other our and step-up stocking was substantially a $X.X CosMx the of service installed growing better consumable QX platform. and revenue, revenue consumables service $XX.X of Biology million. our growth, our which includes Spatial At QX. million, other year-over-year XX% as and reflecting was over nCounter base Consumables $XX.X than QX installed instruments.

that well margins depreciation, remove to items expenses; Turning our certain accordance of no which or shift impact reserve and amortization to more measures the basis, reserve, a as we on the noncash is QX XX% instruments. detailed by operations. posted QX inventory mix are panels gross margin prepared. were to GeoMx gross the and our exhibits other from our targeted continue weighted about Investor release whole results as correlation points. in adjusted and gross in expected provide primarily removing margins or in with to X impacted adjusted non-GAAP related similar Relations approximately internal as web I'll margins to this percentage of and on transcriptome revenue non-GAAP was mix adjusted our assay. This consumable information and our for with impacted to continuing page press heavily to policies have $X.X CosMx Please stock-based how by million of reserve compensation, refer included sales and After QX impact

temporary R&D with consulting costs development flat by approximately product Adjusted lower and increases million, related and Atomics, to software personnel $XX.X and expense CosMx costs. in year-over-year consumables was offset

of to $XX.X abate. R&D second million, the highest the quarters in expenses first to coming lower show and QX. SG&A we sequentially trade year-over-year lower the half behind to year. half trade us, other personnel expense expense expect With and in major X% meeting by decrease as and compared reflecting of and the expect expenses be of these We offset Adjusted a in activity that costs, are show lower SG&A was year marketing-related also expenses be QX as

by million million, loss the to XX% $X.X second half. was in QX adjusted inventory over the is impact as of reserve. compared expected half EBITDA of the EBIT inclusive first of decrease loss year the $XX.X to the

CosMx The be second and to from continued of improvement by margin manufacturing the expected and trends instrument noted. revenue derived acceleration half driven improvement is expense just scale-up gross operating the

XX, Our approximately cash, cash were short-term million investments of as $XXX XXXX. equivalents and June

We around million. to expect cash continue be year-end $XXX to

including to XXXX, Cash we CosMx consumables of and spatial heavily areas other half first products CosMx the launch. During flow support capital, instruments is the to inventory invested our in working to improvement, expected biology improve and driven facility expenses the completion half capital of shipment the collections customers and in manufacturing the increased the and year, QX following lower second of EBITDA by new of inventory a build-out. and

guidance. to Turning

in revenue. representing and million For nCounter revenue about the service million $XX be range million, growth $XX biology growth. of million $XX revenue, third to XXX% quarter, year-over-year expect $XX range includes of about $XX to to and year-over-year of to This $XX we million representing spatial million the XX%

For of the to full range are reiterating year, total revenue $XXX million. we our guidance $XXX million

our CosMx beyond revenue instruments before adjusted expect as these pull range in XX% the and continue XX% gross higher-margin to XXXX shifts as margins begin mix XXXX systems to consumables. through also improving temporarily be We in lower to in will towards

like to convertible comment to sheet as we cash notes. I'd get our resources continue balance questions Finally, our about and on

We strengthening are taking two-pronged balance a our approach sheet. to

strong potential XXXX we First, constructive alternatives financial with advance dialogue the the engaged and our parallel, that of are the trajectory our we a business In partners of notes are interest of a expressed funding business. regarding in holders our exploring supporting in have maturity. with positive convertible financing in

most throughout contribution by for materially will the share investors and territories capabilities These not that CosMx Many positive in and to our also by potential is touched not understand are product the which GeoMx investors product provide in market the our binary in be opportunity have world, by recognized value determined and not lines, combined nCounter EBITDA litigation. litigation.

have confident noteholders capital between and will convertible access address necessary our potential are that current the these We we to company's investors, the to notes.

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

Tom. Thanks,

nCounter and for and position are towards and CosMx million team power continuing an balance franchise world more excellent through are into profitability. and competition in attributes revenue predictable multiple our are momentum to cash we biology has intense deliver underappreciated generator. in for instrument staying sheet and march $XX backlog, These options XXXX despite platforms strengthening The provide than spatial XXXX. growth class Our with maintaining our an

that, With the open questions. we'll line for

from line Your Instructions] the first of question comes [Operator at John UBS.

going? any with there up just Maybe the high off are with just how litigation? with had those at competitive you Where the out How your starting some do does level. it began, you on come When of -- bids the think look litigation customers the you're maybe winning? you've there XXx color

very any you now maybe rate competing are imager who at panels. scientists Thank system of to of specification differentiate not X,XXX have X feel continues is, are sensitivity on including tissue future, for see more the compared imager to But customers platforms. competitors spatial plex. Absolutely, there its panels, And number sample. X,XXX imager win And information for Yes. that provide important much spatial opportunity most zero we the same spatial most in gene the based X.Xx We XXX, X our competition. the which about question, is by XXX. that the or in versus in included XXx Any we genes, is the even NanoFrine John. many as in our good to has today, buying look CosMx the genes

disrupts sufficed access remarks, admirable litigation are how their advantaged than get to products somehow with in researchers the people's science reps the in points. said of our about able to life rather field comfortable help customers that been get sales And people's sales we've my right cases, Most terms that I platform in that dealt as our and of understand purchase disadvantaged as science from have with or to talking is they've common an most We've that back intellectual prepared job. whichever is science has viewed is rare. platform for -- decision to standpoint. questions whichever In to litigation, reps injunctions relatively or their arm research done property

I the been injunction? to been turnover-related versus then rate? you've those cancellations those due remind then X%, out what your of color out have appreciate you historical called TXG normal the And us Can there. or And the the related rate. of cancellation macro has cancellation any more cancellations, customers on

Yes.

First, I retained number July announced, our XX% that have That fulfilled pre-announcement in course, we or should had say, retained. of when backlog we our that early in of we is either intact.

have a had order early July. single We backlog since cancellation not

So I want to say that first.

just I Second, the say reasons. the past think to as had, customer-specific will the in for And come which a our been issues. than as handful average, was is variety you few have of have A rate cancellations higher basically many X. related very to that have expect, X% cancellation we've but historical been I litigation, might orders related

is we cancellation our they not go in to decided on right one and context are colleague had For about having are other occurrences. instances, instance, rare still drag low, incredibly customer's X% with that business forward. QX But these the a customers than direction. determined in CosMx In in hallway, a their rate they that total, a periods they could example, going site. all the weight and instrument rather as also worried one and who acquired this cumulatively for share down sits another that grew frustrated

here. question last then And

updates see And there buildup? has your influenced test, when just color litigation on building plans you backlog? at the manufacturing then manufacturing all I guess in up. any the through there the any that's how the burning On on

scale-up way the of our scale any going Yes, plans. litigation influence I'd The say well. is manufacturing in not has

track much quarter. again growth number in to revenue yes, expected increase in third shipped I the then second see a space we instrument licithat the the to can You be. expect of biology orders with systems CosMx where we quarter we're think than and first, the larger right we would on in And

Your next line question from Baird. comes the of

the your to going the Appreciate sorry, here equipment for on acceleration to acceleration wanted set you're spending, especially the strong Congrats CosMx we've Catherine. first, in an expect sounds that just broader is or caution is XQ, time. around a from bit touch perhaps Maybe -- it like quarter. orders. Tom to Good in comments on see I peer And from the a capital on XQ pharma. see see little more to quarter. heard in third on This

on this just half? dynamic the and curious, all? extension order in sales So thoughts you seeing Is any of at are cycles there just velocity broader back

the for you Thank Yes. question.

think category. expenditures we within expenditures breakthrough on special biology other very that spatial prioritize. brand-new product with capital be is believe capability I potential. We institutions It's to discovery biology spatial over well capital research have prioritized may a a

in second very half in We strong continue peers saw business though, we the I'll differ some second We and have I intact. may mix for you, the a our from see demand. imager slowdown ways. is to our capital outlook remind in expenditure that quarter no spatial velocity think that

base biology spatial customer Our or XX% funded. is academic government

budgets that And benefit rather traditional or capital company. from they have in a dollars biotech large small biopharma so would than you a NIH

I so may bioprocess. we be relative some any of amongst reductions peers to insulated customers somewhat capital corporate kind our instance, in and of for from And think expenditures

consumables what with utilization. rate how to another trends an half. quarter base Any looks uptick thoughts of that helpful. run here? Got Curious And about see in oil like super then on the thoughts quarter. pull-through it. on CosMx back And just the consumables That's nice observing in

observed our of call the expectations. in have any behavior Obviously, pull-through able to early to it's enough for customer to too us in CosMx be way change

per system for model remember, launch, pull-throughs guided at people we're about CosMx size inventory burn say year. haven't long-term that rate seen that we at with built their that they've which you'll per sign, down our modeled I'd to Geome is heading and comixusers, seeing to encouraging as similar they orders As the good into pull-throughs they order. which are the a first what $XX,XXX for their that stocking we but

updates pull-through. any for wait what long-term provide are to expectations So on caustic we're going to our

if could I one Got just maybe sneak more in. it. And

Any material you the change. thoughts in Just in just quickly general? commercial strategy the on expect And to the commercial term? outlook that changes would near officer on

question. we the for changes expect our No, commercial you Thank no to strategy. Yes.

of executives levels. great and very a in built I'm Chief for underneath we continuing a he team our but while that to he the very was VP new with at the that new new John bring very other pleased looking things underway. Commercial I'm energy Marketing strong VP that not group expect a this of here with of bringing and are the team sales and One did the changes. was and time transformation I already of Officer, and great ideas, have are strategy pleased at Chief any Commercial Officer, will fundamental incremental strengthen

question Your line Stifel. next from of comes the

This people mentioned touched bit you're we if business a another I anything is and XX%, wondering from in know on know I hearing just portion but is your kind the is? little Dan But guys region -- now, be mean, might a I right it's [ph]. what your I for guess them you're from David guess, academic. I pharma. of not you on hearing that topic that hot of China. feedback big operating

Yes.

as fraction revenue. NanoString's of China, is very small a reminder, a So

even because say the to pandemic pleased group distributors -- of And building that our just I think in China. hiring growing probably China, a had very for they of And very we the be to We right the good we actually had us, find spatial came commercial little we China really may team. then and of bit along driving now. were maybe an not what in were that both capable had I'm exciting an quarter. our business more that well ourselves. but have But area show faster that to company specific of is historically as very over really than a or staff opportunity last channel as years, worked biology fast through couple had they begun second the rest that's field

I in is talked going $XX in know quarter that half. of of investments the understand the have you question here. lower I you're I burned lot And capital Got you about making. I million another then some you. other burn first then and I cash is, mean working the $XX and guess million the a dramatically second

XXXX. And the of how control? the of keeping that and converts what's I are kind the conversations -- are coming outside you considering? what that of holders much can at the in there know converts. brought or the capital of the terms Or kind all? year within mentioned with the some an in that like the then that is that to end also been of as you're you've in getting it million has mean, So been of raise I equity up people of of your by things $XXX due of you kind your --

control. feel would statement. Yes, making is very it banks. I'll we why take confident much that say I both our that's situation, in of And those With cash respect the that to in

have in starts. that we're year reiterated talked in it that's as about where half point we much and we think From just revenue lower second the our feel revenue with where a guidance, ramping that together well I the improvement gross inventory confident we we at very collections that expenses lower with that, margin prepared as remarks expenditures. purchases, declining combined AR sequentially capital there, the and with higher

all are control our that point. or knowable at either So are these this in things

confident in and feel cash we there. our very to I our get So forecast think ability

might about. with the And convertible have other of investors to it's of interested what capital number we on has expressed all the groups that the a form our that and -- zone intrinsic that good a with I just nature think we value us. able these balance And would do the of about confidence as We've future or as this. different of got wouldn't that when through confident in we're investors we well we a business state financing exact in of set be talk form a With get get about looking comment thinking talks our as take to cost But and the that the been the respect for we'll very be. explicitly the to a it two-pronged we'll discussions. at solutions of looking explicit, near financing, noise company different in might on the of more approach to robust different you as end folks to what obviously, of through solution will reasonably be talk this

line the Your Genuity. next question comes from Canaccord of

It's the quarter [ph]. Axes for Kyle great on as the line on as guidance. Congrats Nexen well

start Just on with Atomics. question one

at satiates as AGBT out a few this I capabilities genome, a the to laid you on provide integrating get data this as as well few Thomas for that. data the well. Atomic the DSP GeoMx of end analysis What to office whole plans plan So by year analysis curious just specifically, year. on was

for Yes, question. the thanks

focus now this with basic the sure users running that for Atomics functionality reliant Atomics. GeoMx needs features on and first The of and customers enable per right will that we is with the the it be than stage. wave to to the users. they of getting Our data at computational up are at far need. CosMx terabyte continue for much about well priority CosMx That's is making underway fully more those us next up larger to slide atomics data compute and capabilities support of CosMx data to add cloud X produced

now. time aspiration line. a we and is Atomics, focused that a but users elaborating to is long-term on lower capabilities into remain So CosMx add slower GeoMx for our atomics priority say I'd

Got shifting a it. gears And bit.

backlog that noted preannouncement. So higher CosMx that actually XX% the of curious than I'm composed what for actually customer you original of? is about base XX% kind is the was

XX, the what getting I I comment $XX the is between Yes, about can at. the think difference and which you're million

out that trending been prerelease So a very our have time estimate. in characterize what $XX We the we that or applied conservative the the quarter. for ASP data that CosMx put we numbers million early would analysis at in ASPs we had as at was the a we up. on our figure units to of had backlog completed we order

was than that actually So prerelease. the put very estimate value we in our out of early our of kind backlog that higher original

lease previous the where now. reported So number $XX you we in the that's $XX of million is the million between where actual majority at we're see the that the in difference

additional the that of into about essence It's versus backlog we're putting -- prerelease. that. the that the not So orders is

in very last back one, one then to here. That's it. the of just kind level litigation Got just helpful. terms setting And of

guess UPC at December. near in we're -- catering near have dates November September, CosMx looking we are, also be for you as here those there's should just well as as radar term, in dates I could in guess, important some the GeoMx the the in So market should that that on the Delaware key in hearing confirm I the we the well our in term? that

good Those -- job I think now you the between a Yes. characterizing of end of the year. did dates the key and

you. Thank

of Morgan question next from Stanley. the comes line Our

Madison on Kisan [ph]. is for This

the you know I from quarter, maybe could customers budgets academic your what I there? XXXX, section. provide for just was coming on you're This guys on academic wondering of hit about you most before your if views expecting

Yes.

But to we course, at reduce budgets relative modest would I for XXXX. this think XXXX budgets anything our stage. for that in don't see the is, those them meaningfully of visibility academic

think I other NIH there's funding change unlikely either and direction between government or drastic that a in now grant in next it's year.

structure Got do helpful. to competitors? changes you response you. then, but on how up just just related pricing. contract not in to in pricing the at you that, framework sensitivity? discounting ongoing kind of one macro the more seeing And see any the holding Are broader like And That's just litigation, guys your or CosMx

and our to very across -- the can come I that model in pricing order business discount with price gain is We are to from think companies board. instrument. the our many valuable profitable pull-through willing the consumable stable like instrument

But in increase we So prices price amount. or increasing see moving -- at typical don't don't see that are our to discounting this we list our eroding stage. any meaningful below a of by ASPs kind way

next TD Cowen. Your the of comes question from line

going just question second on set one just guys the And placements place CosMx you could So, be out on how then pipeline one forward. cash many on the you 'XX to assuming is numbers Have flow. feed capacity there? any in

obviously of persisting could help burn million of see on so year? a How into helpful. color the If that next So do or in would you that a much the give second year. wares some that, be more kind this trend big as $XX half you of

one cash I'll Well, handle about and the take about flow. the manufacturing let Tom question capacity

balance I'll term. backlog year our We in be for over the have at manufacturing expect not or slowly scale of techniques that capacity place I the and months could have. capacity in to the would scale to this long unconstrained new we up allow burn to down to a We issued to such really we're -- burn the as needed we scale long-term targets. will be this the And system. customers X think manufacturing say, up a manufacturing of year, by intend down us to end a in we the by have position to the want and don't really to manufacturing have wait yields that I relatively time

working phases be that launch unique with large the we'll heading that With where we and guided that of what fire this periods fulfilling we that during we explicit. [ph], shipping. to see the yet working initial I think the all capital year, give started Alan more rapid with the we future into of I'll and cash haven't kind respect XX order in CosMx is backlog capital standard will and had next we to once situation burn when are relative said,

and quarter-to-quarter, next working what So the of respects, to that itself next year to half We comments I into we've our the thoughts is itself near as can in cash be out profitability next what resources there of we believe depend next have, this our working in guide and into be on variable we've in had year said things and it stand curve we can expect them But on would plans still balance the that capital first be heading effect capital burn there existing be from the on to sheet and we will have this before. year, barbell be do in and order will smooth won't but not anywhere firmly we heading year's get breakeven -- what as burn and resources that. cash EBITDA slope explicit get year, year, the will some our this place repeating to burn there it upon looks much on get more but manageable. path we'll our more on other

further time. for questions Farrell at Doug are call There over I'd this to remarks. closing no like to hand the

everybody, weeks concludes replay collars I to for your us The XXXXX. international time. conference again replay, U.S. both is access the Thanks, a This call. at next did today. by be pleased for for the caller’s same XXXX, XXX miss will XXX ID any portion joining X that the available you call, there of pleaXXXXXX-XXXX. for our Thank

Thank you.

may now You disconnect.