Singular Genomics Systems (OMIC) 9 Aug 232023 Q2 Earnings call transcript

Good day, everyone, and welcome to the Singular Genomics Systems, Inc.

Second Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host, Philip Taylor. Sir, the floor is yours.

operator. you, Thank Singular Drew are Dalen Chair, Chief and Presenting and Genomics the Officer, Spaventa; Officer, Company's Executive today Founder, Chief Meeter. Financial three XXXX. Singular results today, released months the ended Earlier June Genomics XX, for financial company's A copy release press of website. on is available the the

Before as to you predictions, of will X, only, and would today, that plans, today's call include like questions and other our expectations, and to operating and and plans, including to August estimates, your during I opinion forward-looking reflect we comments begin, related inform strategies. responses management's statements, and statements views XXXX information financial results,

more results may press described these certain by result in Actual implied of materially are differ risks and expressed risks fully or as These a those our statements uncertainties. from uncertainties and our filed today XX-K release. XX-Q today's Form filings the earlier most including X-K Securities and Commission, issued and Form and with our the with Exchange release recent press filings and in

be website website any Please obligation investor.singulargenomics.com place this or SEC forward-looking will in that disclaim undue section. We found to for call Our these and replay available forward-looking statements. audio revise on Presentations be reliance not conference the can or SEC's to our Investors cautioned Events our note filings on are website. on statements. on the update at

With that, I will turn the call over to CEO, Drew Spaventa.

our performance. earnings pleased to I'm company's call. provide and afternoon, XXXX an Genomics' to welcome update with quarter Good on second Singular you

and two, our on update opportunity, innovation our focus four execution, areas. commercial will following four, market We key One, three, operational the execution, pipeline.

pillars year. four our intend earnings previously pillars key progress for how measure call XXXX we the our are throughout we during framework these QX reminder, a the outlined the As of success. These to as areas

Let's start commercial execution. with

unit of was an of placements key external support in pace of XXXX. we additional important company, the The moderated our half second expect time ramp will shipments second yielded that the a which for quarter

key as GX this during half opinion XXXX. and measured partners our among appropriate our success deployment for strategically of leaders, foundation important the to of influential is year platform KOLs, other the systems second the establish believe and into We that the continue sustained or to strategy

bringing We the placements the shipped quarter field to system academic the in end labs, three systems of total as of quarter our to during the GX XX.

added also funnel. grew sales compatibility library to number qualified our We leads prep the the menu of in and

excited installed base the are and the expanding We our system of accuracy GX superior a value Customer validate to as continues customers. sequencers. continue our flexibility, other mid-throughput power, proposition speed, the delivering to alternative feedback to and to GX's

noted than compelling For University and Illumina higher reported instance, cell Vermont GX, loading the of consumable costs an that, substantially sheets". company spec the in purchase is excellent flexibility better in undeniably than flow with "the tolerances. Output instrument flexibility much to were

performance the We exceeds to GX set and instrument be GX continue has our with sites. is customer at key specifications broad of addressing initial Customer capable that applications. of a feedback pleased validated data

and protocol to running, users workflow and field upgrades time it As optimization, takes expect on this the and stage, you get for at and up instrument. time completing services and including work trainings, would

and will Nevertheless, more support. seamless bring-up, progress to enable is there frequently, the quarter, These encouraging training, pull-through. and has quicker, raise and better which enabling scale quicker important support been more run throughout customer system improvements customers

our by and enabled will utilization now. pull-through GX utilization be two believe product We provide will more of things, availability. usability and platform We higher color on

of usability platform. the the First,

system is usability or possible field to reliability the and system run system as is uptime, of as as easy and to onboarding, service ease support. we such make and system, work a on the customers their tracking, which operation This monitoring, for scale It includes move symptom work GX sets, training of both dashboards, critical their use platform. the feature ongoing of

We factors and key pull-through. of quarter the on will have continue these XXXX, to rest progress of significant focus second and on to each utilization for the in which these made are critical

Second, product availability.

available including flow offerings cell half the New of the will Max in Read year, and the be FX second kits. consumable kits

the or The delivering Max reads single-cell price per price FX XXX doubles a million GX. on a run. read, applications the flow or further throughput FX the on competitive per sense gigabase to set run of reads over delivers kit X.X of the per billion Read single kit, highly cell and make expands The that

academic This throughput, will cost of for leading sequencing, research a segment. flexibility, and deliver and the unique a single-cell in combination application,

drive field over to offerings increase systems product and consumable system additional pull-through these for expect time. utilization of the the We in

be to as additional We interest GX segments, our strong funnel market among by prospective customer evaluation of platform leads, the opportunity. from the positive to continues target our evidenced for sites, qualified a believe Turning and sites. growing inbound demand increased GX reference

The with XXX. nearing sales to opportunities funnel continues total grow, qualified

traction speed, of single-cell based academic optimize and current the labs, majority often the our of output with varying needs experimental of in These are initial comprise on which In sequencing. enables less these flexibility volumes labs runs RNA-seq varying managing sample The from power, sequencing placements. addition, seeing range a core we delivers and than like and and are day. to requirements GX a applications results labs

academic increase at labs. leading in GX from continued and the researchers to lab Interest directors has

where excited For custom own the on submitting have run libraries' been example, These are already projects both to their of labs for for include with the by that, GX we noted many very the sequencer. cut-and-run, laboratories well RNA-seq, MIT high-throughput, "we be the standard support and recently samples preparing as the protocols enthusiasm researchers as

demand and by traction We interest unit placements time. this over positive to increased expect and and the growing translate encouraged to are

earnings measured year. discussed We the first and approach GX prior right of reasons. for on moderated the the number was in As that we of shipped expected calls, half systems this deployment believe three of a systems

establish to success. for First, a sustained foundation

manufacturability. exceeded. and reliability, And aimed usability, at third, make are or expectations to customer implement to Second, sure system met improvements

traction, of funnel, will in placements made FX the half sequencing. increased for coupled growth in ramp availability supply second and XXXX, of We single-cell and instruments the Read field, progress the the and given Max kits sales believe commercial to manufacturing then ability to the with in unit

execution. to operational Turning

Our been GX's has and optimizing on streamlining on processes, several key the executing goals. We've supply reliability. chain, to usability these enhancing manufacturing been and focus initiatives support

specifications manufacturing, collaboratively and strengthen operations for our working critical QC we've steps vendors engaging production testing and additional of incoming includes to to This testing subcomponent In taken second for parts. protocols, components, capabilities. and suppliers sources implementing with refine GX

in time chain. GX supply a initiatives designed and to the up instrument bring required build These to are increase reduce predictability and the

several to usability in designed systems providing and field, updates new rolled we features and out important the addition, enhancements reliability. software In to improve

attended showcased organization, In in KOLs and scientific talks, through and demos, leaders the outside Human we region in our Glasgow, the Scotland system U.S. European of presence our where the commercial We Genetics with June, from our commercial the Conference are technical team industry expanding presentations. met GX and

addition, brought have general which step we Europe, an In board of to we commercial important is on excited are in believe manager growth international a strategy. our

innovation and our Turning product pipeline. to

consumable on run about in and pipeline high-throughput innovations, being cells performance content kits, widely Our and and GX applications. including for the made progress of workflows the specs, novel and system team improvements flow is excited the

FX cell per We're allowing get FX reads XXX X.X available number early from flow widely doubles have applications. addressing some to run our cell per flow million the FX up users of flow of billion cells pleased after successful the a reads cell access to reads offering, flow or to period. most The run,

up sequencing or X.X offering for to top kits also per single-cell this release We shipping to XXX pricing designed single-cell sequencing to later kit is kit cell early billion to Max forward quarter. to This started get NovaSeq Read enables users We reads for for reads customers. This flow million run. broader per a look this on access bench system. level commercial allow

the our be With moving a already and quality, new major kits second will in set compelling customers work of offerings. supporting ensuring focus announced their to and the on availability, half, these available execution products, on of

believe has and been rest and will catalyst positive. facilitating We more the of an Thus pull-through. be far, and customers access the users early usage for FX the feedback over placements Max on year from this GX higher of Reads system scaling important

progress continue work our we in Multi-Omics. to finally, And

in-situ the future in We team the of PX, high-throughput appropriate development our updates system. the the to single-cell and We additional have spatial dedicated a at lean providing to time. forward look

the over of Now, I'll details through second turn call to to results. the Dalen go financial quarter our

directional start two the of quarter. you, XXXX remarks on by I'll Thank Drew. for instruments approximately XXXX. rest for made second recognized quarter up the additional Revenue of provide metrics of predominantly key million, revenue $X.X XXXX the I'll financials. was the Then on during QX covering

for in million XXXX. expenses compared of $X.X QX XXXX compensation Operating of million non-cash included the the These quarter of million, QX $XX.X quarter totals XXXX. totaled stock-based and XXXX to second $XX.X $X.X million expense in second for

In addition, property, $X.X QX value the non-cash adjustment plant, carrying a of and expense in million related equipment. to XXXX a included of one-time

year-over-year and and driven of facilities infrastructure the to expenses by of headcount, in The development support increase roadmap. operating was scaling product total primarily otherwise GX commercialization our

share, $XX second the or for per million, in $XX.X $X.XX or the quarter $X.XX loss share, compared per second Net XXXX. of of million, to quarter XXXX was

$XXX.X short-term calculate share cash, $XX.X for share investments, in cash, the million. average second was per weighted count And loss million. restricted approximately and to equivalents, Our totaled used quarter net cash excluding

continues interest number be number sequencing. Max comments for consumable the funnel. Turning as believe to second growing FX kits the the qualified that reflected the placements Read supported ramp, XXXX, availability will We strong, in commercial of in the of single-cell half of and flow of on XXXX cell, in commercial by opportunities kits, the sales our to rest of

Consumable the still stages. pull-through in early is

nine is could traction sequencing slower Utilization on GX depending needs. noted, academic project of volumes, on sequencing XX project customers, these be academic to with dependent ramp labs. early of and academic seeing Drew initially, we're customers with As our placements experiments at commercial and

to more learning updates it provide patterns utilization becomes expect consumable about and over predictable. as on pull-through anticipate customer more We time

investment to intend while areas half of XXXX to our modestly XXXX. expenses, increase development Regarding runway to to manage existing in resources the the commercialization into cash GX related operating expect roadmap, provide second of in half and the of second we do product we directly

closing and remarks. Thank Drew to back for you,

you, QX. of during team's dedication Dalen. I'm the proud Thank

quarter, in scale In Our we second hard are critical and a which quality, as made can internal the business. the operations. significant manufacturing, and efforts work progress we foundation establishing from

three systems, book, shipped our opportunities qualified also number upgrades, added supported sales funnel. the the and of in GX grew and customer to order installations We

catalysts of of recent the the Our including Read flow version kits demand year. expected consumable the kits and the access across to commercial half Max sequencing, important be second early our for are single-cell and FX driving launches, product and cells scaling

value proposition we of the Perhaps meets right in and market. continue of most fastest-growing with importantly, of and the confident feature in that and needs that largest validation designed the the segments we steadfast to set of us. opportunity product remain a many the front We receive

Now, it open up for questions. Operator? let's

question first Your is Instructions] coming Sykes from [Operator Sachs. from Matt Goldman

is line live. Your

my different your four be per comments demand wanted maybe of, Hi, of a Drew, you end sort talk using taking thinking with month you afternoon. sort that a Dalen. back-half year of be that. about questions. going quarters about the kind the the being of that of in of this Drew, a measure end for ramp? year should I the and we you of the of half of of of cadence first we on previously still at to of laid kind previous Thanks kind about low back end the cadence higher as as kind Or ramp, forward? at measure out to just kind should the Is the Good second-half two

for taking the thanks the question. listen for Matt, Hey, in to time

step anything We differently. haven't will likely to communicated into four That two it.

year the can half getting from and discussed of are second you scaling first instruments out. of that range, the of the should be that in very early much But hopefully that and handful into the ramping year. is we comments think we the I still into previously in and the stages next gather stepping

detail more on And it. expansion into then Europe. just the maybe little Got a

area academic that the success -- that labs. would your in given so with part kind that on any far Is the helpful? reason core be Just why other in can Is of kind and provide of you're color presence expansion of Europe. that you or academic investing

be Europe. decentralized. actually from We've a conferences that of good A we've fit had seems The absolutely. market will more Yes, market. that of that it GX European demand number quite attended, inbound really bit is the a much for

that, very and a Europe. much and You investment to putting the well starting the point general the manager speed bring is fragmented, we flexibility to set for a of large high-throughput to in don't modest at foundation just up central that enter But and about lay first really us doing Again, profile decentralized and have the the scientists ability Europe year. be place, support customers and in think foundation market as to application, now a a getting market area, for this up will labs overall, speaks the for really that sequencing. part we're starting the and to It's fit that of GX. compelling think, many do nice really the to It's next more environment.

just And sneak can one, last it. one it I Got if in.

sort the side and FX people the feedback that sounds of as Max and like in like It it flow sort cell. of from in of of that the demand have over instrument that kind pulling type from end should You so terms out shipping sort the of gotten those talked towards with about so thinking shipped Read of products get commenced, like positive the far, dynamic time? those just trialed be products who you've of year the we

lot inflect which that with that sales the will has general of customers there a the technology macro cycles are longer a we're of and lot it are think I I seeing definitely What out Yes, the and new than for anticipated, do to is people environment putting evaluation framework through. demand. in think

samples FX or up think show is and cycle Customers and want very can interest many be call, a it's want they sites sales and but we're run other which anticipated. starting really strong me those It's they really than to often had references the to much going running, think So get and a to Reads. we will catalyst, still longer I Max strong. with a be

sales into catalyst really year, year. have effect So next I this see an absolutely-- to think the new QX start to so your on next more the on expect comments to in conversion we year even and start from the products funnel

Got it. it. Thanks very Appreciate much.

you. Thank

from from coming is UBS. question next John Your Sourbeer

Your line is live.

any for on I was you Hey, within my the it The And question. any people affecting it was I And how previous think everyone. looking color. you sales guys progressed I Can you of Thank how give has how for called out funnel that is on for think cycle, talk I Thank Christian you more if color you know It's about actually XXX just taking has and John. kind about the throughout XXXX? that progressed? touched then. on question. on sales you. really pricing that could the conversation? funnel.

Yes.

So you sales kind of funnel. the with start know, I'll maybe,

leads. several authority understand that's now think was And is don't quality speaking budget. close You a I sequencer. are right dozens an And filters into think make specific has is. person know, what that our now with increase, need in to qualified but remember last of for and gave last year, lead we We've know, QX those the significant A the steadily in you passed they half the seen XXX entity into, back and most back qualified think qualified that a It something I number. to the and funnel let's of earnings purchase, this call, it have has probably the to up probably leads. the qualified quarter lead a a the saw going of factors the we I important a increase to lead. We're is

and to time, this to for to We're they of over will a convert level see really we're going term, near those very not us away, we're Now, see real conversion. to And start you to all but are all really meaning higher right opportunities, are confident encouraging start ramp start really build. it's of the going see to form. that, know, take they

pricing. dynamic we're Is on or I So sales the – And it. the of on excited was the the then kind right? about that question think second

Yes, yes.

Yes.

strategy a so price maintain integrity. taken try to we've and So far

look last XXX,XXXs it's high reagent look the have model. number, end at ASPs small over but and have do XX trending the you in instruments, rental for lease a a you that – the been know, have at if we If quarters a three our we you

We has value to needed to will by the the evaluations, placements to GX and and our show realize make try stepping do system. really strategic as for run on point large, the speed, the a but strategy or cost and the sure line commitment that are and the customers the of flexibility, been hold in platform, making they value price the and the

of and, the justify at in of of Illumina line that. Illumina instrument kind typically should close price XXX sells, lists All that know, that's and you purchase easily know, to a you with

matter but I that we and of have, really do to think to ASPs I so the we that. realize established, system So, value of try indicative it's been a fortunate to to think, far continue time system get are will the

Thank you much. That's I have. very all

Thank you.

coming from question is next Cowen. from Brennan Dan TD Your

live. is line Your

Thanks, for bit large a know on, questions. competitive a I it's Maybe guys market. taking I Great. the little just dynamics. guess,

guys of or, whether of Has boxes in you up You Element changed labs? a there in be against, you things whether seeing kind Illumina, know, it going how but what it the couple of have are you're are be placed, when terms in anything going just there?

is, Illumina taking are in their at is think a trend is test and that general their the for evaluations the choice close that they're At and to samples. many options more predominant the look compelling player there. different time out really year people up are MiSeqs, X,XXX thorough understanding against where NextSeqs offer the times, labs times, the more doing they're I that this meets to can we ship of I for alternative say at time, price similar competitive are needs. a references. At and asking I'd they're really really opportunities Yes, labs that, there are Overall, the and and what of profile and the point more think, instrument. will us, value those Illumina, XX% to that the we the much on is asking going given

of per So It's similar value academics I lab the and get the you but more a think the cores point, the a is lower it It's and investigator really cost kind within resonates. price positive of essentially proposition, flexibility. especially experiment. private the ton a part

to $XXX, better are flow sequencing. a do want down Our it's they use and their to for cells how and system much just

So, how about up really good we feel kind stack of we competitively.

is I the Dan, of something establishing a time. being platform zero that acquisition. just It And big right issue, think we're company working really takes the just references, and takes that's that now. the on or as low-risk

And the to sending versus month, mentioned, I I the get XQ the mean, half year, how four Thanks, more third quarter? just back of per we in that is like the Great. to it the be terms little Matt in code should sounds it about thinking confident, bit that skewed of two to XQ straight but you guess, you're of a terms Drew. can zip into model

low good Everything's quarter, right for That's think so. about the longer. it. end just taking mean, bit raise growing. stepping third into a really we cycles the I a then And for progress growing. higher instruments. are third able of next hopefully, kind to We're up pretty Yes, thinking sales the middle candid. we're QX absolutely for absolutely References look I and range the time are we're setting year. about It's range that. direct quarter starting in fourth be Leads trending to nice how as made to that in The are supply and into to feeling and of the into internally the the direction. and to comments, being little

point kind assuming a and capacity do we six can for how as next get and like you And call that year your of next it you be for use nine what QX, would jumping can kind of year? that to off QX, would

better Let bit us and and this of a are quarter little understand take quarter this looking. next really kind how

be in with there. how but the and terms to yet I on more you don't enough year about of of think revenue, we an want to posts we next accurate know just be kind goal give answer to forthcoming think could I able placements unit do think look we

in certainly give about be shaping how coming a So, we'll information little calls. planning XXXX time. to more us But give is up

next to maybe kind of dedicated in couple have calls get in we the It's of terms the and of comment the have. the through labor of manufacturing of add just has ancillary, that support space investment Dalen, the some supply one variable the Dan, items talked that. That of to with plenty and GX. a just cost other to years we capacity prior us matter about infrastructure to unit.

It's to So it quickly scale we've infrastructure. got up. want the just how we

Great.

guys. Okay, a Thanks lot.

Thank you.

is Bank Your coming from Mike next Ryskin America. from of question

line live. Your is

the this Avantika half ramp is Mike. loans ask moving as where do you from second XXXX to to see Hi, the gross consumer margin up? wanted and Thank We in maybe you. you in the

model higher margin pull-through at gross to Yes, instruments revenue This much Dalen. expect kind companies the get at the margin, about increases, margin is a razor, gross hi mix blade model, a in line with as razor then really other the lower take profile. profile. to start consumables you placed tools the And of the think similar of traditional there. over we be if The gross

that counts of early get you expect, you as the we know, still small so in tailwind. Pull-through at in a install terms stages. the changes, right we're And nice And very now gross mix end is base. would margin such

would model As see traditional kind we curve we're as install up we and to grow move customers the able the to move into expect off next the tailwind of base. utilization that year,

your given is much currently? a on then priority PX And much. the cost the so how of comments control, you Thank it. Got

offer. general, and unique spatial remains is validate and we verify can and to really novel believe feedback PX through using had KOLs We've sequencing cells that that. our tissue something technology it a it's an The abundance something that effort committed and question. good interactions to. of we're that that and Yes, the quite remains, really have we We and in applying

TAP It's are academics with We Program show right forward novel with moving Technology with to and Access with receive them a technology methods we're now. a and working where share program this the leading samples look of more next context later we've and and developed in kind do we cells. at it's spatial year about And to in-situ something year. two into to sequencing plan tissue

As far as itself relates, bring and the broader take it exploring we've ways effort can or system previously looking will PX alternative partnerships that a we to talked and forward, about program. fund that

is and do work it's a opportunity. with continuing. We're the But the given spend. being point So It's this capital small modest have our lean the to value judicious high team. place of at the believe a we investment right

seeing Thank much you this customers know it. three And commercial why I if customers bias had not sneak buying reason that. surprised the with a more? and, towards Got quarter so you're one there heavy to is shipments you more I can then like, Are you academic. for in, academic

No, not really.

the academics to feedback. They're Once and different They're publications the work for technologies. we tip academics that provide going at market start foundation. of you of They're kick kind usually the new new true profile, get I to tires. adopters. on that rings think to going the you of your early with kind And of adopt and to segments, that They're cutting have when going you. are look into different this type be of the environment. technologies really a lot of sell kind adoption to going typically

large to would and we they're have therapy, There's in internal your that be an these sequencing do for expect, we sequencing The of cell companies, your your tool private applications. would are next ton essentially develop using our products kind and companies, -- done segment medium-sized a large research of research CRISPR doing. represented people whatever being as for that funnel,

LDTs. of be next testing be clinical run And would are wave kind to So or centers, medical hospital running fleets larger then would or medical customers kind academic kind that of of beyond that customers. that clinical sequencing of the centers,

And it give buyers, depends of example. cycle system So are really there's of really you but in kind a on just one of launch. the you continuum your where life I'll

unit much GX to stable, a that's an to out If it's -- think the at newborn go to the you're bit the application going market. offer you're with into that's something road. point mature that's of new when application you but time thinking new the sequencing, a still that ironing that the kind intensive speed not a That's the about technology given have you're you're platform for kinks a very the that is a care you're also good of box, and going you in very we down really flexibility, you something and something and established when that to go have application

long-winded at So early way of interest. with surprised not the saying, all academic

will other be probably is technology. right the of but now think two-thirds well good funnel I in Our about a academic, that that the adopters are profiles entities as there's third of the funnel

Thank you much. it. so Got

Q&A concludes Thank this you. our Everyone, event. That completes today's session.

at time a disconnect have for you may your and this You Thank participation. day. wonderful