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HTG MOLECULAR DIAGNOSTICS, INC (HTGMQ)·Q2 2022 Earnings Summary

Executive Summary

  • Q2 2022 revenue was $1.49M, down 28% year over year but up 26% sequentially; net loss per share improved to $(0.54) from $(0.81) in Q1, driven by sequential revenue recovery amid oncology market normalization and cost containment actions .
  • HTP (HTG Transcriptome Panel) adoption accelerated, representing over 42% of revenue, with ~$0.6M in kit and processing sales; management highlighted growing demand and broader use cases beyond oncology, including dermatology cohorts and new pharma engagements .
  • The company amended its SVB loan to remove a restrictive minimum liquidity covenant in exchange for a $2.5M principal prepayment; quarter-end cash and investments were $14.1M, providing more flexible runway to pursue profiling recovery and drug discovery milestones .
  • No formal numeric guidance; directional commentary maintained for FY22 revenue growth over 2021 and continued momentum in HTP and pharma programs, while acknowledging ongoing customer access and oncology trial delays .
  • Catalysts: continued HTP commercialization and OEM/LDT opportunities, drug discovery preclinical data pack progress, and operational cost discipline; governance changes (board resignations, quorum bylaw amendment) and prior Nasdaq bid-price notice are watch items for investor sentiment .

What Went Well and What Went Wrong

What Went Well

  • HTP became the largest profiling product; sales represented over 42% of Q2 revenue with ~$0.6M kits/services, reflecting positive adoption and strong customer testimonials (AbbVie, Pfizer) showcased during the quarter .
  • Sequential revenue growth and strategic execution: revenue increased vs. Q1; management achieved first-half development milestones and highlighted momentum in new pharma programs and OEM dialogues, supporting the profiling franchise recovery narrative .
  • Drug discovery progress: second white paper advanced proof-of-concept for transcriptome-informed chemistry optimization; next milestone is early preclinical characterization of a lead compound for the first indication, reinforcing the hybrid life sciences strategy .

What Went Wrong

  • Year-over-year revenue declined 28% due to continued sluggish oncology trial activity and customer access issues; cost structure pressure persisted with higher SG&A and R&D spending vs. Q2 2021, widening operating loss YoY .
  • Gross margin compressed vs. Q2 2021 given lower volumes and absence of prior employee retention credits that benefited cost of revenue and opex in 2021; EBIT margin remained deeply negative despite sequential improvement .
  • Governance and listing overhangs: June Nasdaq minimum bid-price deficiency notice, June/August board changes, and bylaw amendment to reduce quorum requirement may weigh on optics until operational turnaround and financing clarity improve .

Financial Results

MetricQ2 2021Q1 2022Q2 2022
Revenue ($USD Millions)$2.07 $1.18 $1.49
Net Loss per Share (EPS, $USD)$(0.39) $(0.81) $(0.54)
Operating Loss ($USD Millions)$4.08 $6.25 $5.68
Cost of Revenue ($USD Millions)$0.97 $0.86 $1.01
Margins & ProfitabilityQ2 2021Q1 2022Q2 2022
Gross Profit ($USD Millions)$1.10 (=$2.07−$0.97) $0.33 (=$1.18−$0.86) $0.48 (=$1.49−$1.01)
Gross Profit Margin %53.2% (=$1.10÷$2.07) 27.8% (=$0.33÷$1.18) 32.0% (=$0.48÷$1.49)
EBIT Margin %−196.8% (=$−4.08÷$2.07) −528.2% (=$−6.25÷$1.18) −381.0% (=$−5.68÷$1.49)
Revenue CompositionQ2 2021Q1 2022Q2 2022
Product & Product-Related Services (%)100% 100% 100%
HTP Sales ($USD Millions)N/A~$0.50 ~$0.60
HTP Mix of Revenue (%)N/A>40% >42%
KPIs (Selected)Q1 2022Q2 2022
New Customers Added4 11
Active Pharma Programsn/a50
Publications Added8 12
Total Publications (Cumulative)>360 >370
Shares Outstanding (approx.)~8.6M (03/31) ~11.0M (06/30)
Cash & Short-Term Investments ($USD Millions)$21.6 $14.1
Current Liabilities ($USD Millions)~$8.5 ~$10.2
Non-Current Liabilities ($USD Millions)~$8.7 ~$6.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2022“Expect revenue to build throughout 2022, resulting in full-year revenue reflecting robust growth over 2021” “We expect these trends to continue during year 2022” (profiling recovery, HTP momentum) Maintained directional (no numeric range)
Operating Expenses / Cash BurnFY 2022Not previously specifiedSpending adjustments to contain cash burn; rightsizing organization while maintaining capabilities Introduced cost discipline focus
Segment/OtherFY 2022Broaden HTP adoption; OEM/LDT strategy in motion Continued HTP adoption (>42% mix), expanding use beyond oncology, new pharma customers and OEM dialogues Reinforced commercialization plan

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2021, Q1 2022)Current Period (Q2 2022)Trend
HTP Adoption & Product MixHTP launched; early adopters; 15 customers; $200k Q3 sales; expected to drive 10–15% of FY revenue; over 40% of Q1 revenue HTP is top-selling assay; >42% of Q2 revenue; ~$0.6M HTP sales Strengthening
Oncology Trial Recovery & Customer AccessCOVID-related access/supply chain delays; slower sales cycles Oncology trials not back to 2019 levels; gradual recovery; sequential revenue increase Improving slowly
OEM/LDT & Market DiversificationHired commercial leader; OEM/LDT focus to leverage HTP Early OEM conversations; broader disease areas (derm), larger cohorts Expanding
Drug Discovery InitiativeAnnounced therapeutics unit; white paper #1; team hires and KOL buildout White paper #2; next milestone: early preclinical characterization for lead compound Advancing milestones
Cost Discipline / Cash Burnn/aSpending adjustments implemented in Q2 to contain cash burn New focus
Regulatory/Legal & Governancen/aNasdaq bid-price deficiency notice (June); board changes; quorum bylaw amended Overhangs to monitor

Management Commentary

  • “We have what we believe is a disruptive technology that partners RNA profiling and medicinal chemistry… address… drug candidate attrition and getting the right drug to the right patient.”
  • “We made significant adjustments to spending to contain cash burn, rightsizing our organization for expected revenue while maintaining our capabilities.”
  • “HTP has quickly become our biggest selling product… we believe as oncology trials get back on track, we have the right products to address these trials as well as to expand into new disease areas.”
  • “Revenue for the second quarter of 2022 was $1.5 million… Net loss per share was $0.54… We ended the quarter with $14.1 million in cash, cash equivalents and short-term available-for-sale securities.”
  • “The next milestone… an early preclinical characterization for our lead compound and our first indication.”

Q&A Highlights

  • Publications and early adopters: management expects 3–5 additional HTP papers to follow the first peer-reviewed article (Frontiers in Medicine), underscoring scientific validation momentum .
  • Use beyond oncology: expanding into dermatology and broader sample types to access larger cohorts; increased customer travel and engagement after prolonged restrictions .
  • Commercial focus: HTP and microRNA harmonized workflows driving adoption; legacy panels used to complete ongoing studies while HTP becomes the preferred profile for new work .

Estimates Context

  • S&P Global consensus for Q2 2022 Revenue and EPS was unavailable due to missing CIQ mapping for HTGMQ; as a result, we cannot assess beat/miss versus Wall Street estimates for this quarter [SpgiEstimatesError for HTGMQ].
  • Given lack of formal numeric guidance and estimates, investors should focus on sequential trends, mix shifts (HTP adoption), and execution milestones to recalibrate expectations .

Key Takeaways for Investors

  • Sequential revenue improvement with HTP now over 42% of revenue indicates product-market fit; continued adoption and expansion beyond oncology could sustain growth into H2 2022 .
  • Year-over-year decline and margin compression reflect lingering oncology trial and customer access headwinds; management’s cost actions should help stabilize cash burn while preserving growth capabilities .
  • Balance sheet flexibility improved: SVB covenant removed and $2.5M prepayment completed; $14.1M cash/investments at quarter-end supports near-term operations and drug discovery milestones .
  • Drug discovery pipeline is progressing (white paper #2, next preclinical milestone); tangible data packs over the next quarters could be valuation catalysts if partnered/licensed .
  • Governance/listing developments (Nasdaq bid-price notice, board transitions, quorum bylaw change) are non-operational overhangs; watch for resolution as commercial momentum builds .
  • Near-term trading: narrative likely driven by HTP demand signals, OEM/LDT wins, and customer access normalization; absence of consensus estimates reduces immediate “beat/miss” volatility but amplifies milestone/news flow impact .
  • Medium-term thesis: hybrid model leveraging RNA profiling in both translational research and drug discovery offers differentiated exposure; execution on cost discipline and partnerships will be key to de-risking the story .