Executive Summary

Q1 2024 delivered modest top-line growth with net sales of $2.9M vs. $2.8M YoY, while gross margin compressed to ~25% on lower capital mix; GAAP net loss was $16.97M and diluted EPS was -$0.88, with a discrepancy from call remarks (-$14.2M, -$0.74) due to preliminary status and subsequent adjustments .
Operations advanced: first pre-clinical WAVE system installation, development of Gram-positive PBC menu, and 12 new contracted Pheno instruments; 70% of U.S. Pheno customers now secured to longer-term contracts ahead of WAVE launch .
Regulatory catalysts: WAVE clinical trial targeted to begin toward end of Q2; ARC 510(k) submitted with Bruker collaboration, under FDA review; management continues to target a strategic partnership by midyear .
Cash usage was ~$9.0M net of financing (includes ~$1M prepaid annual expenses); quarter-end cash was $14.61M, supported by January equity financing .
Near-term stock catalysts: WAVE clinical trial start and performance readouts, ARC FDA decision, and potential strategic partnership; risk factors include margin pressure from mix, cash burn trajectory, and Nasdaq minimum bid price compliance .

What Went Well and What Went Wrong

What Went Well

“We installed our first pre-clinical trial site… successfully ship, install, train and run the Accelerate WAVE system” – foundational execution ahead of clinical start .
Contracting momentum: 12 new contracted Pheno instruments; 348 clinically live instruments; 70% of U.S. Pheno base secured to longer-term contracts ahead of WAVE .
ARC regulatory progress and partner validation: 510(k) submission with Bruker’s Biotyper integration; FDA response received and under review, expanding rapid ID options complementary to WAVE .

What Went Wrong

Gross margin declined to ~25% from ~36% YoY on lower capital instrument sales mix, reflecting profitability pressure despite recurring consumables growth (+7% YoY) .
GAAP net loss widened to $16.97M; the call noted a lower loss (-$14.2M) pending finalization, underscoring preliminary nature of results and accounting volatility tied to prior financings .
Nasdaq minimum bid price deficiency notice received in April; potential reverse split considered if compliance is not regained, highlighting listing risk .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$3.299	$3.0	$2.921
Gross Margin %	~3%	~21%	~25%
Operating Loss ($USD Millions)	$(14.650)	$(10.729)	$(10.156)
Net Income (Loss) ($USD Millions)	$0.910	$(13.0)	$(16.965)
Diluted EPS ($USD)	$0.06	$(0.89)	$(0.88)
Cash And Equivalents ($USD Millions)	$20.162	$12.138	$14.606

Notes:

CFO on the Q1 call cited net loss of ~$14.2M and EPS of -$0.74 vs. GAAP in the press release (-$16.97M, -$0.88), reflecting preliminary nature and potential subsequent adjustments .

Segment breakdown: Not disclosed; company reports net sales and mix commentary (consumables up 7% YoY; capital sales mix lower) .

KPIs

KPI	Q3 2023	Q4 2023	Q1 2024
Clinically live revenue-generating Pheno instruments	339	340	348
Contracted instruments in implementation	70	71	75
New contracted Pheno instruments (quarter)	6	6	12
% U.S. Pheno customers secured to longer-term contracts	n/a	~65% (FY 2023)	~70%

Operating Expenses (GAAP and Non-GAAP references)

SG&A: $5.7M; non-cash SBC ~$0.9M .
R&D: $5.2M; non-cash SBC ~$0.4M .
Non-GAAP reconciliations provided for expenses excluding SBC .

Cash Flow Highlights

Net cash used in operating activities: $(8.452)M .
Cash used in the quarter approx $9.0M net of financing, including ~$1M prepaid annual expenses .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
WAVE clinical trial (Gram-Negative PBC) start	2024 Q2	Begin Q2 2024	Target start toward end of Q2 2024	Maintained timing (clarified late-Q2)
ARC 510(k) submission	2024 H1	Anticipated submission in Q1 2024	Submitted; under FDA review	Achieved (raised to “submitted”)
Strategic partnership (WAVE)	Mid-2024	“Confident to sign by midyear”	“Remain confident by midyear”	Maintained
Financial guidance (revenue/margins/OpEx)	2024	None provided	None provided; focus on cash burn reductions	Maintained (no formal guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023 and Q4 2023)	Current Period (Q1 2024)	Trend
WAVE time-to-result and platform scope	Beta operational; goal <4.5h; broader menu than Pheno; consolidated PBC + isolates	WAVE capable of ~4 hours for many drugs; consolidated platform; same-shift results emphasized	Consistent positive progression
BD partnership funnel and placements	BD training; EMEA tender framework revised; 6 new contracted in Q3; Q4 lower placements; building funnel	12 new contracted instruments; further penetration; BD progress noted	Improving execution
Bruker collaboration (ARC)	Clinical trial initiated; plan FDA submission; Europe traction	510(k) submitted; under FDA review; positive collaboration noted	Regulatory progress achieved
Cash burn reduction	Sequential improvements 2H23; targeted reductions in R&D and SG&A	Continued focus; ~$9M cash used incl. prepaids; intent to reduce burn	Ongoing focus
Regulatory timeline for WAVE	Preclinical completion expected; clinical start Q2; FDA submission ~Q3; approval mid-2025	Target clinical start late Q2; reiteration of submission later in year	On track (timing clarified)

Management Commentary

“We installed our first pre-clinical trial site… run the Accelerate WAVE system with Gram-Negative Positive Blood Culture samples in a clinical microbiology lab… target starting our clinical trial towards the end of the second quarter.” – Jack Phillips, CEO .
“ARC… submitted to the FDA… we’ve received comments back… Arc is under review… expect to hear back from the FDA in the coming weeks.” – Jack Phillips .
“In the quarter, we contracted 12 new Pheno instruments and brought another 8 instruments live… fortifying our existing loyal customer base… both are key in our launch of WAVE.” – David Patience, CFO .
“We remain confident in our ability to secure a partnership by midyear… excited about the next phase of clinical trials and the FDA submission later this year.” – Jack Phillips .

Q&A Highlights

Customer perception of WAVE vs. competitors: Positive feedback on high-throughput, random access, consolidated PBC+isolates platform, and ~4-hour time-to-result enabling same-shift therapeutic adjustments .
Transition from Pheno to WAVE: Optionality to pair with existing molecular rapid ID or MALDI via ARC; labs can integrate ARC + Biotyper for rapid ID plus WAVE susceptibility .
ARC collaboration and regulatory timing: ARC submitted, under FDA review; expectation to determine timing upon FDA response; viewed as complementary to WAVE .
BD partnership momentum: 12 new contracted instruments, 8 brought live; BD’s comfort selling rapid susceptibility improving; key to WAVE launch preparedness .
Expense and cash burn focus: CFO reiterated significant reductions ahead as WAVE exits development and transitions to clinical, with targeted savings in R&D and SG&A .

Estimates Context

S&P Global consensus for AXDX Q1 2024 was unavailable via our data interface at this time; therefore, we cannot assess beats/misses versus Wall Street estimates. Values retrieved from S&P Global.*

Where estimates may need to adjust:

Given lower gross margin mix and elevated GAAP net loss, models should reflect ongoing capital sales variability, recurring consumable growth, and expense reductions as WAVE advances from development to clinical phases .

Key Takeaways for Investors

Execution is improving on commercial and regulatory fronts: WAVE pre-clinical site install, ARC 510(k) submission, and increased contracted instrument momentum underpin nearer-term catalysts (trial start, FDA decision) .
Revenue stability with consumables growth is offset by margin pressure from lower capital mix; monitor mix shifts and gross margin trajectory as WAVE approaches commercialization .
Cash burn remains a central focus; quarter-end cash of $14.61M plus prior financing support runway, but sustained reductions in R&D/SG&A are critical ahead of WAVE milestones .
Strategic partnership remains targeted by midyear; partnership terms could materially impact commercialization speed, capital needs, and margin structure .
Regulatory milestones drive the near-term narrative: WAVE clinical trial start, performance metrics (EA/CA, time-to-result), and ARC clearance are key stock catalysts .
Listing compliance risk persists due to Nasdaq minimum bid price notice; corporate actions (e.g., reverse split) may be considered if compliance is not regained .
Discrepancies between GAAP press release and call remarks highlight preliminary status; anchor on filed statements for modeling, while tracking updates post-10-Q .

Supporting Documents and Data

Q1 2024 8-K and Exhibit 99.1 preliminary press release with full financial statements .
Q1 2024 press release (duplicative content) .
Q1 2024 earnings call transcript .
Prior quarters: Q4 2023 8-K and transcript ; Q3 2023 8-K and transcript .
Nasdaq listing compliance notice (April 30, 2024) .

Accelerate Diagnostics, Inc (AXDX)·Q1 2024 Earnings Summary