Q2 2024 Earnings Summary
- Standard BioTools remains committed to achieving adjusted EBITDA breakeven in 2026, regardless of the top-line, by accelerating cost synergies and reducing operating expenses.
- The company's proteomics portfolio, representing approximately 80% of revenue, is expected to experience healthy growth, providing a strong foundation for future revenue increases.
- Introduction of new growth initiatives like 'Omics as a Service' is anticipated to drive additional revenue streams and diversify the customer base, leveraging the company's integrated service capabilities.
- The company lowered its revenue guidance by $30 million at the midpoint, reflecting significant forecasting misses due to overreliance on a few big pharma customers, leading to revenue volatility and challenges in demand stability ( , , ).
- The challenging macro environment and constrained customer funding cycles are causing extended sales cycles, particularly in instrument sales, impacting current performance and future growth prospects. The company does not expect market recovery in the short term and continues to face contained pharma spending ( , ).
- The departure of the CFO after only 15 months raises concerns about management stability and execution risks during a period of operational and financial challenges for the company ( ).
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Guidance Cut and Second Half Outlook
Q: Why was guidance cut and how does second half look?
A: Management cut guidance by $30 million at the midpoint, primarily due to timing issues with large customers in their SomaScan service business. They expect a 10% sequential increase in the second half, driven by an uptick in large pharma accounts and a strong instrument pipeline. Rigorous forecasting processes have been implemented, improving visibility into the second half. -
CFO Departure
Q: Why is the CFO leaving now?
A: CFO Jeffrey Black is leaving for personal reasons to return to an industry he knows well, closer to family and home. He emphasized there are no disagreements with management and remains a loyal shareholder. He is proud of rebuilding the finance organization, which will now be led by Alex Kim. -
Commitment to Adjusted EBITDA Breakeven in 2026
Q: Can you still achieve EBITDA breakeven in 2026?
A: Management reaffirmed their commitment to reach adjusted EBITDA breakeven in 2026 regardless of the top line. The previous revenue target of $300 million now seems like a stretch, but they expect healthy growth in their proteomics portfolio and an uptick in genomics. -
Dependence on Big Customers and Diversification Plans
Q: How are you addressing reliance on big customers?
A: The company acknowledges being overly reliant on a few big pharma customers, causing revenue fluctuations. They are diversifying through authorized sites, launching individual SOMAmers, and partnering with Illumina, expected to come online in the first half of 2025. They are also expanding services, including Omics as a service, to broaden their customer base. -
Instruments and Consumables Trends
Q: What are the trends in instruments and consumables?
A: Consumables revenue, including authorized sites, was flat year-over-year but should have been increasing. Early stages of the Hyperion XTi imaging platform launch are expected to drive future consumable revenue due to higher throughput. They have resolved issues with the CyTOF XT flow business and anticipate increased consumable pull-through. -
Genomics Business Prospects
Q: Is the genomics business growing?
A: Genomics revenue is down 6% in the first half, part of a managed decline as customers move to next-generation sequencing. They expect to overcome this headwind in 12–18 months. OEM partnerships with Olink and Nex-Gen Diagnostics are picking up, and they anticipate the genomics business to become a profit driver in the coming years.