Executive Summary

Q1 2023 revenue was $1.03M, down 13% year over year; operating loss narrowed to $(5.01)M from $(6.25)M on lower SG&A and R&D, though cost of revenue rose on a $0.4M excess inventory reserve .
EPS improved to $(2.28) from $(9.73) year over year, reflecting a larger share count after the December 2022 reverse split and equity financings .
Liquidity was tight: cash and equivalents were $3.00M (total cash, equivalents and AFS securities $6.6M) vs current liabilities of $6.6M; management disclosed substantial doubt about going concern and expects existing resources to fund operations through at least June–July 2023 .
Strategic progress: in vitro efficacy of lead compounds, improved second‑generation molecules via AI engine, and system‑designed compounds from transcriptomic data; partnering discussions initiated with biopharma .

What Went Well and What Went Wrong

What Went Well

Demonstrated in vitro efficacy of first lead compounds, both standalone and with standard of care; second‑generation compounds showed improved efficacy using HTG’s AI engine and EdgeSeq data .
CEO highlighted three Q1 milestones advancing AI‑driven drug discovery and lead optimization for liquid tumors, with solid tumor program to follow; early partnering interest observed .
Operating loss narrowed by 20% YoY; SG&A down 30% and R&D down 16% YoY on 2022 cost reductions, improving operating cash burn .

What Went Wrong

Revenue declined 13% YoY to $1.03M, driven by a 25% drop in sample processing services and fewer instrument sales; timing of larger pharma studies and sample access delays weighed on services .
Cost of revenue increased 34% to $1.15M on a $0.4M excess inventory reserve tied to shifting commercial focus, pressuring gross profitability .
Liquidity risk: cash, equivalents and AFS totaled $6.6M with current liabilities of $6.6M; management disclosed substantial doubt about going concern and highlighted debt obligations and potential SVB lender actions .

Financial Results

Metric	Q1 2022	Q3 2022	Q1 2023
Revenue ($USD)	$1,184,454	$1,250,879	$1,032,510
Total Operating Expenses ($USD)	$7,438,489	$5,598,897	$6,045,109
Operating Loss ($USD)	$(6,254,035)	$(4,348,018)	$(5,012,599)
Net Loss ($USD)	$(6,497,519)	$(4,516,148)	$(5,054,772)
Diluted EPS ($USD)	$(9.73)	$(0.41)	$(2.28)
Cash & Equivalents ($USD, period‑end)	—	$3,212,451	$2,996,409

Segment/Revenue Mix

Metric	Q1 2022	Q1 2023
Instrument Revenue ($USD)	$193,186	$75,821
Consumables Revenue ($USD)	$471,214	$568,711
Total Product Revenue ($USD)	$664,400	$644,532
RUO Sample Processing ($USD)	$520,054	$387,978
Total Product+Services Revenue ($USD)	$1,184,454	$1,032,510
HTP (Whole Transcriptome) share of Q1 revenue (%)	n/a	66%

Geography and KPIs

KPI	Q1 2022	Q1 2023
Revenue – United States ($USD)	$967,123	$503,397
Revenue – Europe ($USD)	$215,666	$505,145
Revenue – Other ($USD)	$1,665	$23,968
% of revenue outside U.S.	18%	51%
Cash, Equivalents & AFS ($USD)	—	$6.6M (Cash $3.0M; AFS $3.57M)
Current Liabilities ($USD)	—	$6.56M
Customer concentration	3 customers at 24%, 20%, 12% (AR 12/31/22)	One customer at 13% of Q1 revenue; AR 44% and 12% from two customers

Notes: Q4 2022 exact quarterly results were not disclosed; management cited ~95% sequential revenue growth from Q3 to Q4 2022 in a preliminary release without full quarterly figures .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Partnering discussions	Late 2022	“On track to begin partnering conversations by end of 2022”	“Partnering discussions initiated with global biopharma on molecules and on use of engine”	Maintained/Progressed
Preclinical entry (most advanced oncology program)	2023	n/a	“Expect entry into preclinical development in the next several months”	New timeline
Financial guidance (revenue/margins/OpEx)	2023	None provided	None provided	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2022 and Q4 2022)	Current Period (Q1 2023)	Trend
AI/technology initiatives	Machine-learning library design; early efficacy in two disease states; building internal cell culture; white papers; KOL validation	AI engine used to create second‑gen molecules with improved efficacy; system‑designed compounds from transcriptomic data	Strengthening platform capability
Supply chain/macro	COVID-19 headwinds, delayed trials, customer access challenges; reduction in force to adjust cost base	Continued impact on services timing; shift to quality revenue/cohorts, minimum batch sizes	Gradual recovery focus/operational discipline
Product performance (HTP)	HTP best‑selling product; broadening beyond oncology; increased demand; 12 publications	HTP and miRNA panels drove 66% of revenue; consumables up YoY; Europe mix increased	Mix tilting to consumables/Europe
Regional trends	35% FY22 revenue ex‑U.S.; active customers/programs installed base detail	51% of Q1 revenue ex‑U.S.; Europe nearly matched U.S.	More international revenue
Regulatory/legal/financing	Equity financings (Mar/Dec 2022); SVB loan amendment and repayment schedule	Going concern risk; debt service and potential lender actions highlighted	Elevated financing/liquidity risk
R&D execution	Milestones achieved; preclinical characterization planned	Lead optimization advanced; preclinical entry expected “next several months”	Advancing pipeline

Management Commentary

“Three major milestones… have not only advanced and strengthened our AI-driven drug discovery engine, but have significantly advanced candidate molecules through lead optimization for our first indication in liquid tumors, with a program in solid tumors expected to follow closely behind.” — CEO John Lubniewski .
“These results demonstrate the utility of the AI-driven drug discovery engine in combination with high-quality full transcriptome data… system-designed compounds showed highly similar characteristics to HTG’s lead compounds… based on transcriptomic data alone.” .
Partnering interest: “We are pleased with the level of preliminary interest… from pharmaceutical companies… as well as those interested in using our AI-driven drug discovery engine with their own target portfolios.” .
Liquidity disclosure: “We currently expect that our existing resources will only be sufficient to fund our planned operations and expenditures until at least June–July 2023… These circumstances raise substantial doubt about our ability to continue as a going concern.” .

Q&A Highlights

No Q1 2023 earnings call transcript was found in the document set; therefore, no Q&A details are available for this period. Prior commentary from Q2 2022 emphasized HTP adoption, publications, and non‑oncology expansion (dermatology) .

Estimates Context

S&P Global consensus estimates for Q1 2023 were unavailable due to missing Capital IQ mapping for HTGMQ; as a result, we cannot assess beat/miss versus Wall Street consensus for revenue or EPS [GetEstimates error]. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

Liquidity/going concern risk is the core near‑term consideration: cash and equivalents of $3.0M vs current liabilities of $6.6M and debt service through 2023; watch financing actions, partnering proceeds, and SVB term loan repayment/maturity .
Revenue mix is shifting toward consumables and Europe; instrument sales were weak; service revenue declined on timing and sample access—track pipeline of larger cohorts and CRO channel utilization for normalization .
Gross profitability pressured by a $0.4M excess inventory reserve; inventory and cost discipline are critical while scaling the consumables/services mix .
Drug discovery milestones and partnering discussions are real optionality; evidence of efficacy and AI‑assisted design may catalyze out‑licensing or collaboration; monitor preclinical entry timing “in the next several months” .
Operating loss improved YoY on cost actions; sustaining SG&A/R&D efficiency without impairing platform progress remains key to runway extension .
Customer concentration remains notable (13% of revenue; 44% and 12% of AR tied to two customers); diversification of revenue sources is a risk management priority .
Without reliable consensus estimates, stock reaction will hinge on narrative (AI/platform progress, partnering updates) and liquidity developments more than beat/miss optics; anticipate elevated volatility around financing or partnership news .

HTG MOLECULAR DIAGNOSTICS, INC (HTGMQ)·Q1 2023 Earnings Summary