iSpecimen Inc. (ISPC)·Q1 2024 Earnings Summary

Executive Summary

• Revenue declined year over year as iSpecimen prioritized supplier network quality and accelerated Next Day Quotes; Q1 2024 revenue was $2.29M vs $2.95M in Q1 2023, with ASP up 28% and specimen count down 39% .
• Gross margin compressed to ~56% from ~61% YoY as average cost per specimen rose 44%; net loss widened to $2.90M (–$0.32 EPS) vs $2.43M (–$0.27 EPS) in Q1 2023 .
• Operational execution improved materially: 40% of all quotes qualified for Next Day Quotes (NDQ) in Q1 vs 34% in Q4 2023; NDQ prospective dollars conversion jumped to 91% vs 32% in Q4, and >50% overall NDQ conversion year‑to‑date, reinforcing the sales funnel efficiency narrative .
• Liquidity tightened; cash and equivalents plus short-term investments fell to $2.56M at 3/31/24 (from $5.01M at 12/31/23). Company established a $1.5M ATM and received a Nasdaq minimum bid price compliance extension to Oct 7, 2024, both key near‑term stock reaction catalysts .

What Went Well and What Went Wrong

What Went Well

• Next Day Quotes scaled as a core win: 40% of quotes were NDQ in Q1; “91% of prospective Next Day Quote dollars converted to purchase orders,” and overall NDQ conversion >50% YTD, improving sales velocity and predictability .
• Strategic supplier pruning improved alignment and capability: supplier contracts reduced from 243 to ~140, focusing on high‑quality sites and expanding capabilities at remaining suppliers; management: “we actually have access to more supply with less suppliers” .
• ASP up despite lower volumes: average selling price per specimen rose ~$95 (+28%) YoY to ~$437, reflecting mix shift and NDQ impact .

Selected quote: “Transitioning a majority of our business into Next Day Quotes will result in stronger positioning for iSpecimen and greatly improved top- and bottom-line results over time” — Tracy Curley, CEO .

What Went Wrong

• Top line decline and margin pressure: revenue fell to $2.29M (–22%) on a 39% drop in specimen count; gross margin compressed as average cost per specimen rose $58 (+44%) .
• Loss widened and liquidity fell: net loss increased to $2.90M (–$0.32 EPS), with cash and equivalents plus short-term investments decreasing to ~$2.56M by quarter-end .
• Elevated G&A and risk overhang: G&A rose ~$286K (+16%) YoY driven by professional fees, taxes/insurance, and bad debt; company remains under Nasdaq minimum bid price deficiency (extension granted), which could weigh on sentiment .

Financial Results

Notes:

• Q3 2023 revenue from earnings call; Q1 metrics from press release/financial tables .
• Gross profit/margins are computed from disclosed revenue and cost of revenue .

Liquidity and cash burn

KPIs and operating drivers

Segment breakdown: not disclosed; revenue discussed at company level .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “In the first quarter of 2024, 40% of all quotes provided to customers qualified as Next Day Quotes… During the first quarter of 2024, 91% of prospective Next Day Quotes dollars converted to purchase orders” — Tracy Curley, CEO .
• “We strategically reduced… the size of our supplier network, terminating over 100 contracts… We actually have access to more supply with less suppliers” — Leslie Hoyt, SVP Operations .
• “Without these one‑time charges, our burn rate for the quarter would have been approximately $1.2 million or a little over $400,000 per month” — Tracy Curley, CEO .

Q&A Highlights

• Sustainability of NDQ improvements: Management expects NDQ to be “absolutely sustainable,” with embedded coordinators aiding prospective collections and broader inventory data enabling faster quotes .
• Supplier reduction impact: Remaining ~140 sites offer broader capabilities; tighter focus yields more supply with fewer suppliers and improved execution .
• Macro/sample demand (bird flu): No immediate demand noted; monitoring routine flu A/B; willingness to ramp as needed .

Estimates Context

• Wall Street consensus (S&P Global) for Q1 2024 EPS and revenue was unavailable due to data access limits during this analysis. Values would ordinarily be retrieved from S&P Global.
• As a result, beats/misses vs consensus cannot be assessed in this report (attempted, but request limit exceeded) [GetEstimates attempt; see note]. Values retrieved from S&P Global.*

Key Takeaways for Investors

• NDQ execution is a real operational inflection, driving higher conversion and potentially faster revenue recognition; continued scaling should be a central part of the near‑term thesis .
• Mix shift is supporting ASP, but cost per specimen increases compressed margins; monitor margin trajectory as supplier/sourcing efficiency programs mature .
• Liquidity is tight; near‑term financing via the $1.5M ATM and disciplined burn (ex one‑time) are important to sustain operations while NDQ and sequencing initiatives ramp .
• Supplier network consolidation simplifies operations and may unlock capability expansion; watch for improved fulfillment cycles and quality metrics .
• Regulatory/listing risk remains until the company regains bid price compliance; outcomes (e.g., reverse split) could be stock catalysts alongside operational updates .
• With no formal guidance, use disclosed KPIs (NDQ %, conversion, ASP) and cash burn disclosures to track progress toward sustainable growth and margin improvement .
• Longer‑term, the sequencing program (better margins vs core) and data‑driven marketplace enhancements could diversify revenue and improve profitability if scaled successfully .

References:
All quantitative and qualitative statements above are sourced from the company’s Q1 2024 8-K and press release, Q1 2024 earnings call transcript, FY2023 press release/investor presentation, and related 8-K filings: .