SomaLogic (SLGCW) 11 May 232023 Q1 Earnings call transcript

Good afternoon, and welcome to SomaLogic’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of today’s call.

As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Marissa Bych with Gilmartin Group Investor Relations for introductory comments.

you. Thank financial quarter released XXXX. March for results SomaLogic ended the XX, Today, copy is release the on A press website. available of the company’s

begin, securities Reform XXXX. Harbor laws, Provision remind Act to are made forward-looking of call I’d the the management which the we Safe to within federal make this statements Private you of meaning of pursuant will during Before that like Securities Litigation

relates gross content are base, and customer forward-looking margin and to results upon financial and Any All for expectations in growth future predictions call estimates performance, statements based and database contained without hiring, assumptions. expectations events, are pipeline, in of protein our growth, organization to our opportunity, current including diagnostic or various statements, that performance relating our statements. this forward-looking future those or limitation, market

place statements materially by These events forward-looking you or that material or uncertainties statements. implied anticipated not and reliance involve actual Accordingly, these could results cause risks undue differ statements. on those these from to should

For section a please Risk and with Commission. risks Securities the and refer Form to and our Factors the associated the with uncertainties our or XX-Q business, latest Exchange XX-K filed description of list of

time-sensitive the XX, contains is call conference today, as XXXX. of and This only live actuate information May broadcast

intention or new obligation, information, events, SomaLogic revise disclaims future forward-looking any by whether update required of because or otherwise. any except or law, to as statements, financial projections or

Interim Adam I Executive will now Taich, Chief turn to over call Officer. the

decisions but phase talented has remain stepping a the is SomaLogic dedicated into with lead work do you There joining Thank next afternoon. to team. I and this X busy CEO all for make, since weeks a to this and been excited into us role. It to

who of the the financial call CFO, early brief I’ll to my then results quarter. During impressions some and overview review of first my Shaun, results a turning our before for our will line our first quarter the portion provide of today,

The to changes operational simple board, driving significantly we focusing reducing around and our serve committed announced to to In the are improving significant resources accelerated growth, and customers. the a leadership call, while rigor last changes Sciences’ centered and predictable Life and spend. objective, our

leading are what need we to execute we objective. do to market, proteomics this know in and on We the innovators

Revenue was million, our full outlook. in for line tracking the first quarter $XX.X with year

In our addition, our of to are opportunities track, disciplined work discipline maintain to take further, with Plenty assess remains on focus on to expense reflecting efficiently our balance cost reduction to sheet. commitment we and cash initiatives our the management strength ahead. of actively business a the running continue

to the the SomaLogic fundamentally changing become too commercial enterprise. is too just starting that In a spend slow been has and are we focused years, and scaled high, global on dynamic. transition recent

and requires execution Translating in as we most revenue technology of innovative customer importantly, process and SomaLogic our develop assets, This growth innovation, engagement. into deliver commercial thoughtful and the sustainable platform. service some takes how shifts support across and time part that our requires

nice of over first Today, base, on are expanding we commercial we traction quarter. our the where course the saw focused

scale clinical, to we diversify engagements our early biopharma existing our translational opportunity grow We ample across customers, continue projects. to see discovery while and and

on the support earlier leader APAC. in site currently significant with commercial our our this This to and first with see end, a in partnership America, Shanghai recently expand we East, which based new BioStar, to a our Our operations builds To to rollout partnership EMEA GXX, customers in key in are focused opportunity in but domestically year. we and China. we Life North announced Sciences, Middle announced authorized this

around or making this, accelerating kits part very can specific assay in authorized institutions to platform our solutions run large lab. the own needs. To commercial by important we are to contributor that accessible, customers in the An world excellence our site meet accomplish offering more offering, is their SomaScan so that

XXXX. to of We of the by the double sites end our number expect

track We Illumina generation force equipped the install full with with and of with Illumina’s also incentivized the sequencers remain leading commercial our of to utilizing partnership on base deliver next Illumina’s we SomaScan customers. market team to is expect market and ongoing early suite sell bring our XXXX. to biologically work begin our relevant comprehensive, in proteomics to of continue information platform, to Bolstering solutions access our more to assay

the our in forward rollout. reiterate drive XXk are on that we track As we solution SomaScan to leadership, for pleased fourth is plex content quarter

mentioned that key current we commercial could opening this inorganic opportunities, market on remain while board our those remarks, cash fundamentally I a my remain including and our position in business Today, heads profile. balance down the sheet are and change actively environment. business, for I in operational As differentiator especially and our execution, evaluating

In increase simple building delivering statement shareholder that a X value. against and and have weeks SomaLogic continued objectives closing, we spending work confidence in in, on less these discipline, and are revenue positioning focused I but while margins, improve capital. It’s to hard requires

now Blakeman, outlook. will I CFO, and review our performance call financial the Shaun to turn to

Thanks, Adam.

months decrease Turning the in XXXX to $XX revenue ended quarter, from for X first our was million $XX.X same period the XX, year. financial the March million, the prior of for results an XX%

our it’s of line This achieves XXXX, higher was QX QX of comparison quarter’s X% and the that XXXX In our XXXX noting net benefited revenue, revenue year-over-year. $X revenue licensing NEB and worth QX reflects to commercial of of that our growth continued team was million number, matures of in of customer expectations from productivity. as with expansion and

driven our work Gross the the assay XXXX of margins prior margin Institute. in services quarter with the completed were Gross first for mix, XX.X%, compared XX.X% by was for including to Technical quarter Human customer the down primarily year. first of

full during year gross plus mix we XX% quarters. mentioned margins earnings expect as future call, our return the in shifts last to will As customer range

XXXX $XX.X the first expenses quarter $XX.X first were increase in in for operating of were of of an for compared expenses of XXXX $XX.X XXXX. quarter Total quarter to million the million, the R&D first from X% $XX.X quarter million, first XXXX. the million

in for were XXXX. expenses transition in administrative of quarter million XXXX quarter of and million $XX.X compared the executive first general million, first the nearly $XX.X to including $X.X Sales, charges, non-cash

On a our with cash reduction expense basis, operating efforts. expenses align our

clarity, GAAP are compensation our million full year expenses million. around be $XXX operating approximately stock being with expected For to $XX

and afternoon million EBITDA, short-term of filed with of Please with was for $XX.X EBITDA first adjusted of million, adjusted the a investments. for loss of between net equivalents press first of our the compared non-GAAP this we the in GAAP ended and and loss the XXXX quarter loss SEC $XXX.X XXXX. million $XX.X quarter Adjusted on to reconciliation cash release a cash, quarter an of as EBITDA see

million for anticipate of the impact remainder of year QX’s $XX was XXXX higher expected, of various the As we charges. than burn restructuring the to due

with total burn for quarterly the decreasing more modest sequentially cash less year. remainder reiterate XXXX. guidance our or of expect in the restructuring for burn We million QX in of We cash charges $XXX

we believe full our lay years. business product reiterating reflects revenue to guidance top of meaningful guidance this the primarily $XX outlook, in line year assay to services Turning for appropriate are sales. XXXX and million we future the as expansion $XX outlook driven our range foundation We our by million, for

fiscal XXXX As process more to discipline is focus, apply Adam objective our expressed, across and in the organization. primary rigorous

with commercial reflective of first and is tracking that plan. burn cash progress performance to Our in our quarter the

the back this to call Adam. At point, to like turn I would

to will Shaun. questions. Operator? Thanks, we open up it that, With

Thank a from session. of question Dan first Instructions] you. the time, of will question-and-answer TD conduct line we [Operator At Brennan Our this Cowen. comes

now is line Your open.

maybe number customers, Great, robotics, business, you kit upfront gating some a thank of talking you. doubling quarter about guys. discussed are the the Thanks year-over-year? starting Maybe the on the first think just stuff. question, for the with on of you factor the call I

kit give follow on how have have, maybe some going, Thanks. then any many on color some revenue year? for you’re of So maybe how expecting kits customers just color a And of couple that’s I context us ups. the kind this contribution rollout, the you

for Dan. Thanks Adam here. that. Yeah, It’s

So, yeah, XXX% have year we’re number sites to committed we end. doubling by that of the still

we lapped we when had got X sites. So together,

great have make end. by the and sites to traction, confident year double of can we we’re that continue highly number we at We least that

relates that mentioned se. running. the It’s was in it per it of We the when don’t sort partners. the I really right we’ve any gating. thinking part have that highly of select we’ve of out you As ground from right sort geographies but gating robotics our just isn’t guidance, pulled the to kit we’re teased out as we That’s got relates one confident hit to things right the it contribution, about ensuring the something in or of it issues as partners can

as and in be per there areas, while running. certain get through of would So range we a pull wider I customer things up these expect could

territory-by-territory. ensure that to We’re doing our sort best country-by-country, of just

successful partners most can We’re partners that think us. selecting we be the those for

to this. Okay. industry Maybe We’ve tapping been funnel for pauses, give this instruments in year maybe from some of a kind what some of emerging with seen on and QX pharma. date the particularly of the larger within contracted kind your Maybe large and help biopharm, noise what’s brakes, across the you’re color lot biopharma some there’s even this any on seeing customers? some quarter of

Dan. Sure,

curse of wallet fairly blessing small for at think us having of share there’s accounts. of and I – a many a these

us, that tapping And of seeing not you so think we’re really lot for that I mentioned. a break

and active I’m the accounts active. could not we will still some at where We’re confident of highly be

further into been about taking that knocking couple something those accounts SomaScan new do with of of the those it’s for doors, penetrating so commercial the our grown the And on really accounts in as able effort it’s to And last quarters. successfully have, existing we’ve over platform. we us, terms of then value we’ve

first getting on you the or had And on you that it strip Shaun, much a I how to signed much us deal margins that then missed quarter, like maybe if lower north gross a margin XX year? they’re because which you’ve mentioned big was a guidance know of your there others this couple the deals so for confidence XX-plus important. contributed then are that some maybe how are of sense, one contract, deals maybe you give you visibility lower or have the gross big can But you in and and big these full margin,

due fundamentally a type And adjustments margin. of Dan. at mentioned Yeah, look to in call, again COGS, number of it we’re reflect really to those we core kind the very lost all that in was I changed. transitory was mix, the nothing you when does that, confident has small mean, it some little due business it but the customer outside as XX% off

the confident we’re to net see we’ll So business issues. mix of that those transitory back go

for think I most – Any pretty quarter you couple, help guided of pacing just March, at a visibility. here? felt You on sorry had so for then two from first us And of the like end maybe good more. the

are pace things help helm? think going of how how You to the give But of do you Adam, good how out guys QX sound of and/or is on kind you least that any your at us the gate, at in out? terms with want we about

Yeah, Shaun lot a of kits having the each different that the a I this would is say going modest it terms up. I not year. guide looking second at that be our the think again. quarter in in But ramp is throughout half imply that as to from others would would about bias

Got Adam, then in shifts takes traction. final maybe beginning it. it And about requires the talked to time you show and one,

of company, wondering that. now the in obviously you’re kind you flavor you Thanks. penetrating little a think, at young have of and You’ve very customers more still of observed? couple what us things in a of just it a like what sounded but I’m for nature? could been terms observing are but I company, years, bit that maybe little So just you a give Maybe

I’ve with a Thanks, Yeah. this so the a months couple over I’m and been role. a Yeah, year, of Dan. little just into company

comments so a to it things in I us where shared to sort would for of important present really in to impossible wallet met, be certain to and geographies, I they reiterate of just areas. from it’s if earlier. of we’re think those want note meet It’s customers get couple that sort not

And so working on we’re fixing that.

critical. been sending and and is I wants mention services thing we to Not model us Colorado. around history second be experience everyone out, Boulder, the in here in rolled think industry, the know slow kits, in and to to I just from get we’ve samples absolutely that would doing a it’s my and something business this

relationship to team. is model access then the will of And kits huge the their base with product commercial so driver. diversification give including And installed our ongoing our which a and Illumina, platform, their us

For be going NGS, critical our it’s going to growth forward. to

Great. Thank you.

standby for next Okay. Please our question.

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

is open. now line Your

the you next And and Asia right kit Adam, head and content go site for as both the was Thanks X,XXX maybe available in BioStar year? plan no questions. so. think about Good sales to going a just when does on is talk to the basically live, afternoon, can that partnership, Shanghai be year assay the guys. you China I in go the have presence then to or last the now? XX from service

So the building? year? where might that you is finish Where

Thanks about. very something excited Dan. Thanks, Yeah. I’m for with the BioStar, partnership mentioning

give question, And authorized so Xk will to it’s certified at site, of of the on on access of biopharma and quarter. China. accounts we that will will be customers. processing essentially that they’ll the service, assay of kits they be so customer and a expect academic country running a and of that to for live the by and there in that range a for wide behalf be second an behalf so a – their the us your site end And as samples And have channel, be commercial but their government us, that

done biggest that an China. distributed the impact. people More now. did second broadly geographies, like in of we to focused we We’ve presence where and part and been announced feel also of about those would we’re those have in XX on right through like now those the we We’ll we site question, in territories model. like we’ve terms sales can Dan, your Asia, And at enabling really are be deliberate the authorized in Singapore areas through kits and expect

Okay, Maybe follow-up. a just great.

of so, set? us they thinking Just overall an if you next how Illumina terms fees are can wanted Are the months, just and update tech to just some ask key XX you XX I works? about deal remind when of terms partnership. catalysts about the in comes over to are as milestones economics where to development? and maybe the And that of And just the that it

and set Yeah, to so were those terms the we that relates are file did as it agreement.

what with I is the everything’s of are levels of quite into track back nothing the well, is governs So the is and I’ve point we original and the you our just document Tech together. but disclosed terms agreement prevailing all engagement milestones, of the that going thrilled been sort in really that product in company, to we well that still we about out as passionate XXXX, announced have access engaged is to getting but plan. had Illumina team this extremely Progress still going market. on early what from which

half the Okay. to if comfortable the just mark third I’ll maybe dozen Maybe Dan a going here. on questions, hit in is feel a sticking

to last taken. similar on in Just year. list approach Europe, was just be think partnership about might a if similar I’m something Asia, much. focuses going the should EMEA the back wondering Thanks for so of strategic we

there’s to easier the to our but certainly from Boulder I supply again cold UK to limitations been them Yeah. from market chain than the offering, is able mean, Sure. we’ve in But Dan. getting Thank to you, with samples is, EMEA that is penetrate getting It Australia Boulder. one services things do of that.

to expect we we in And desire. of while good back to Boulder business strategy markets, and enable sending just solution of authorized good that as the they option, a have kit there so well EMEA, that if the folks do there the us a samples certainly, of will services sites those growth to in in be headquarters as give distributed a so chunk part do at

Please our question. for standby next Okay.

Canaccord. of Our Kyle the Mikson line next question comes of from

is line now open. Your

revenue with Can that taking kits the Yeah. model? earlier? talk quarter. the discuss just you Thanks. already product below call Congrats you kind the on happened our on quarter this Hey, What of didn’t about for questions. guys. Thanks the

Kyle, would Hey, Shaun. mean, XXX% Well, is this we’re I year-over-year, out growth approximately I in point that still kits.

Adam’s metric rollout of I don’t trying read kits The much ahead think really ourselves quarter. into the here, want early of pace. real and to each as it’s is the the to installation probably out, too put get

to of kit about the confident double ability than our still more number We’re sites.

number. our going just, So see have happened. expect to it’s go up something that’s year, nothing that in out, expectations be we I that something you’re would quarter that until every for necessarily really far sequentially not reflected QX large to we There’s as as as a not install roll again, It’s this base.

Shaun. Thanks, Okay.

here the soon. to funnel Adam, Thanks. be maybe, order just potentially, delayed products out for XXk orders coming be if kind talk pretty an I’m about the really some XXXX. if So exciting going in just later pent-up pocket of curious air could like given that demand just launch there’s there

Thanks, Yeah. Kyle.

the today product. our We’re Xk leader content with

get are their customers excited our on very while hands to so And XXk.

as seeing that. aren’t of stalling We a result

pipeline as But enthusiasm around both on the well strong got on kits. as everything’s track. things very We’ve of that’s service ongoing side the

excited As I’d continue it in our mentioned to to extend we’re earlier, super our area. leadership relates XXk launch, as technology to that

for our standby Please next question.

line Our the Jefferies. next Brandon of from Couillard question comes of

Your line is now open.

Adam, afternoon, Good have the back release BioStar X,XXX press partner over new Thanks. they Great. noted, customers. China on

you many think them with opportunities are those how to curious, Just service do potential proteomics of SomaScan? for

Yeah. Sure, number. huge Brandon. them, to say like a all I’d of

One market ourselves; commercial we track selected one, two, being of like there incredible the I BioStar, corporations driven strong of reasons: would great reach. technologies two three multinational just that say reasons innovative really there’s with the in record or

or sort selected very for strong business. on and extremely They technologies, isn’t of we the variety So a side. strength selling them they’ve an the doing the why country; It just so services the third, focus. got their and something a they’re afterthought distributor attractive been that’s a of presence is have ultimately of they’ve a deliberate of that things one but in

highly most lab operators the technologies and having on skilled with running. in have They deliberate innovative a trained focus their

country that as customer institutions well the well of that aren’t, that spans, base in and biopharmas as as country. of government incredible the as headquartered many large in And China, they’ve those with relationships a are so the academic fantastic got the

able statistic share the XXX. between updated gave was the in you number in pharma terms customers of total demand last last months? color XX in of period? of any then Okay. academia any Thanks. over And think an I the And chance to you’re researchers terms number and

the Sure, biopharma we’re a of or smaller of of roughly it first, terms total Yeah. our from customers customers. in your part revenue perspective, to question take as can XX% so I second count Brandon, relates which

weeks did XXX, for we just of continue worked our right, couple You’re of grow a we to customer and year disclose when that end our back together we base.

a as there’s on at things us, I have of count. could that focus. really is For to be couple where in we focus internal of we’re XXX, that for think relates it talking about our biopharma and a large us When type one customers

different what we’re And for our customers we’re we’re expand different therapeutic that different customers. extending the areas, for us, of and into within have, reach penetrating existing larger And biopharmas. that those, of reach areas, ensuring on our trying extend we to that so geographies continue is new really to we’re then, of some particularly so the focused course,

huge from a that and an of one internal key our measuring It’s perspective. we’re focus effort. commercial us it’s So for for measurements

time, At now back it this to turn closing Adam for remarks. to I like would Taich

just Yeah, joining thank you for all us. I want to

you quarter. look the Thank forward progress and you. that We’re excited about we making next speaking to we’re to

Thank in your you does the today’s program. for This conference. conclude participation

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