Sign in

You're signed outSign in or to get full access.

HB

HARVARD BIOSCIENCE INC (HBIO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue of $24.6M, gross margin 57.1%, GAAP EPS $0.00, and adjusted EPS $0.06; adjusted EBITDA was $3.0M, with sequential improvement versus Q3 on stronger pre-clinical demand .
  • Results modestly beat consensus: revenue $24.56M vs $24.15M*, EPS $0.06 vs $0.05*; book-to-bill was positive, and sequential revenue rose 12% QoQ, aided by new products (SoHo telemetry, MeshMEA organoids) .
  • Management highlighted academic funding uncertainty (NIH) and FX headwinds; gross margin was below Q3 guidance and prior-year levels due to lower absorption and currency impact .
  • Liquidity update: HBIO received a covenant waiver for Q4; must refinance by June 30 and is precluded from further borrowings until refinanced, while expecting operations and cash to fund the business in the interim .
  • Q1 2025 guidance: revenue $19–$21M and gross margin 56–58%; near-term catalysts include MeshMEA adoption, electroporation/bioproduction consumables growth, and ERP-driven efficiency gains .

What Went Well and What Went Wrong

What Went Well

  • Positive book-to-bill and sequential revenue up 12% QoQ; adjusted EBITDA improved QoQ to $3.0M on higher revenue and cost actions .
  • Strong traction for new products: “strong interest in our new SoHo telemetry systems and emerging growth of our breakthrough MeshMEA organoid systems” — Jim Green .
  • Europe showed 28% sequential revenue growth in Q4, supported by new products and early adopters in MEA/MeshMEA .

What Went Wrong

  • Revenue down 13% YoY to $24.6M; CMT revenues softened due to reduced purchasing by US academic customers; APAC down 24% YoY amid CRO destocking .
  • Gross margin declined to 57.1% (vs 58.0% LY; vs 59–60% guided), driven by lower fixed-cost absorption and FX; margin was ~1pp lower sequentially on FX .
  • Operating cash flow of $1.7M was below prior-year Q4 $4.3M; company remains constrained on borrowings pending refinancing, adding near-term financial risk .

Financial Results

Core financials vs prior periods and estimates

MetricQ4 2023 (oldest)Q3 2024Q4 2024 (newest)Q4 2024 ConsensusQ4 2024 Actual vs Consensus
Revenue ($USD Millions)$28.153 $22.0 $24.556 $24.150*Beat by $0.406M*
Gross Margin (%)58.0% 58.1% 57.1% ——
GAAP Diluted EPS ($)$(0.04) $(0.11) $0.00 ——
Adjusted Diluted EPS ($)$0.04 $(0.02) $0.06 $0.05*Beat by $0.01*
Adjusted EBITDA ($USD Millions)$3.650 $1.300 $2.991 ——
Operating Cash Flow ($USD Millions)$4.303 $(0.842) $1.725 ——

Estimates disclaimer: Values marked with * retrieved from S&P Global.

Additional KPIs and balance sheet

  • Net debt: $33.242M at 12/31/2024 .
  • Cash and cash equivalents: $4.108M at 12/31/2024 .
  • Note: Q4 GAAP net income of $18K includes an immaterial correction of a pension settlement accounting error; no impact to adjusted metrics .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Revenue ($USD Millions)FY 2024$97–$102 (Q2 guide) $94.135 (actual) Lowered vs Q2 guide
Revenue ($USD Millions)FY 2024$93–$96 (Q3 update) $94.135 (actual) Within lowered range
Revenue ($USD Millions)Q4 2024$23–$26 (Q3 guide) $24.556 (actual) Achieved mid-range
Gross Margin (%)Q4 2024~59–60% (Q3 guide) 57.1% (actual) Below guidance
Adjusted EBITDA Margin (%)Q4 2024Mid-teens (Q3 guide) 12.2% (actual) Below guidance
Revenue ($USD Millions)Q1 2025—$19–$21 (new) New
Gross Margin (%)Q1 2025—56–58 (new) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
ERP & operationsConsolidated US ERP; expected inventory/supply-chain improvements and automation One consolidated US ERP covering ~80% manufacturing; some inefficiencies as Boston site ramps; expected margin/working capital gains in 2025 Improving (near-term noise)
Academic/NIH fundingAcademic stabilization in Americas; delayed recovery in Europe/APAC; market recovery likely H2’24/2025 US academic customers reduced purchasing; visibility limited; NIH-related grants may cause delays; full-year outlook withheld Deteriorating vs normal
APAC/CRO demandAPAC weakness, CRO capex delays; China academic bottoming, commercial lagging APAC sequentially +8% but down 24% YoY; CRO destocking still a headwind Stabilizing off lower base
New products (MeshMEA, SoHo, VivaMARS, BTX)Beta installs; early adopters; BTX bioproduction consumables ~$1M run-rate; 10 organoid systems targeted by Q4 10 MeshMEA systems purchased by early adopters (e.g., Stanford, Mayo); SoHo telemetry gaining strong quoting; BTX progress with top-5 pharma and Novo Nordisk; distribution expansion to North America planned Accelerating
Gross margin/mixGM ~57–58% on lower absorption; targeted 60% longer-term GM 57.1%; FX ~1pp sequential drag; cost management offsetting absorption Mixed (FX headwind)
Liquidity/leverageUnable to borrow under revolver due to leverage ratio limits; expected cash from ops sufficient near-term Q4 covenant waiver received; must refinance by June 30; precluded from further borrowings until refinance Watchlist risk

Management Commentary

  • “Revenue in the fourth quarter came in at $24.6 million… On a sequential basis, revenue were up 12% from the third quarter, and we had a positive book-to-bill ratio.” — Jim Green .
  • “Strong market reception of our new SoHo telemetry systems and emerging growth of our breakthrough MeshMEA organoid systems.” — Jim Green .
  • “Gross margin during Q4 was 57.1%… the strengthening of the U.S. dollar… contributed to a 1 percentage point margin decline during Q4 relative to Q3.” — Jennifer Cote .
  • “As of year-end, we were not in compliance… lenders agreed to waive our Q4 non-compliance… required to refinance… by June 30th… precluded from further borrowings under the credit facility.” — Jennifer Cote .
  • “Given the lack of visibility around NIH funding… we expect Q1 revenue to range from $19 million to $21 million… gross margin 56% to 58%.” — Jim Green .

Q&A Highlights

  • New product contribution and growth: MeshMEA rose from ~5% to ~7% of revenue YoY; systems priced at $70K–$100K with consumables pull-through; bioproduction (BTX) expanding with a top-5 pharma and Novo Nordisk; CAR-T production interest from a large US biotech .
  • NIH exposure and academic mix: Academic research ~half of HBIO revenue globally; in US, NIH roughly ~30% of academic revenue; caution on grant timing and budget visibility .
  • ERP impact: Expect improved inventory/accounting, supply chain, and gross margin as processes mature; near-term learning curve inefficiencies .
  • MeshMEA adoption and distribution: Adding major distributors in North America to broaden reach; uniqueness of MeshMEA expected to drive lead generation; early adopters include Stanford, Mayo; pipeline includes Pfizer and AbbVie .

Estimates Context

  • Q4 2024 consensus: revenue $24.150M*, EPS $0.05* (2 estimates each). Actuals: revenue $24.556M, EPS $0.06 — both modest beats*.
  • Given a small estimate sample, revisions may tighten around current run-rate; gross margin below guided level could prompt modest reductions to near-term margin assumptions despite product traction .
    Estimates disclaimer: Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • HBIO delivered a clean top- and bottom-line beat versus consensus in Q4, with sequential recovery and positive book-to-bill — a constructive inflection into 2025 .
  • Gross margin missed prior guidance, with FX and lower absorption weighing; watch for ERP-driven efficiency and mix benefits to restore margin toward ~60% target through 2025 .
  • New platforms (MeshMEA organoids, BTX electroporation/bioproduction, SoHo telemetry, VivaMARS) are scaling; early adopters and pharma/CRO demand should lift recurring consumables and smooth cyclicality .
  • Liquidity is the near-term swing factor: covenant waiver secured; refinancing by June 30 is required; management expects operations/cash to fund needs meanwhile — monitor refinancing milestones and costs .
  • Q1 2025 guide ($19–$21M revenue; 56–58% GM) embeds academic funding caution and seasonality; results should validate demand resilience and cost discipline before full-year outlook resumes .
  • Regional normalization continues: Europe strengthening on new products; APAC stabilizing off a lower base; US academic demand uneven pending NIH visibility .
  • Non-GAAP adjustments matter: adjusted EPS/EBITDA better reflect operating trajectory; note immaterial pension settlement correction with no impact to adjusted figures .

Appendix: Segment and KPI Notes

  • Revenue by product family/region discussed qualitatively on the call (Americas +3% QoQ; Europe +28% QoQ; APAC +8% QoQ; CMT down in US academics; pre-clinical rebounded), but detailed segment tables were not disclosed; management indicated ongoing bookings improvement since June .