Singular Genomics Systems, Inc. (OMIC)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 revenue was $0.44M, down sequentially from $1.08M in Q4 2023 and down year-over-year from $0.86M; net loss was $25.0M ($0.34/share) with negative gross profit due to discounts, reagent rental models, and higher support costs .
• Shipped 6 G4 instruments (installed base 30), and management emphasized accelerating the G4X spatial sequencer: service ramp in 2H 2024, select early-access placements late Q4 2024, and broader commercialization around Q2 2025 .
• Cost actions implemented in March; Q1 cash burn was ~$23.2M, expected to be lower in Q2 as savings take effect; operating expenses expected to be 10–15% lower sequentially in Q2 .
• Consensus estimates from S&P Global were unavailable; result comparisons vs Street cannot be determined (S&P Global consensus data not available via tool).

What Went Well and What Went Wrong

What Went Well

• Installed base grew: 6 G4 shipments in Q1, total 30 commercial systems; improving system utilization and consumables pull-through, with strongest monthly consumables orders in April .
• Strong momentum on spatial: expanded Technology Access Partner (TAP) projects (Dana-Farber, Broad Institute) and showcased G4X performance on challenging FFPE tissues; management sees spatial demand and throughput pain point that G4X can uniquely address .
• Strategic clarity and runway: shift of resources to G4X, cost reductions, and plan to monetize services before instrument launch; management expects lower cash burn and is confident in productization trajectory .
  Quote: “Spatial is quickly growing in many customer segments, and throughput is a major limitation… We believe the G4X will be uniquely suited to address this pain point” — CEO Drew Spaventa .

What Went Wrong

• Revenue softness and margin pressure: Q1 revenue recognized on one capital purchase and consumables; gross profit negative due to discounts, reagent rental/non-capital models, and higher support costs .
• Cash burn elevated in Q1 (~$23.2M) on timing of compensation, severance, and working capital; though management guides to lower in Q2, current burn is a near-term overhang .
• Sales cycle and competitive dynamics: conversion of leads slowed in prior quarters; more reagent rental/evaluation models vs upfront capital, and competitors (e.g., Illumina) more aggressive on discounting and deal structures .

Financial Results

Revenue composition (selected periods):

KPIs and balance sheet:

Notes:

• Negative gross margin driven by initial discounts, reagent rentals/non-capital models, and higher support costs .
• Revenue recognition on reagent rental/evaluation placements occurs over time via consumables pull-through .

Guidance Changes

No numeric guidance on revenue, margins, OI&E, tax rate, or dividends was provided in Q1 materials .

Earnings Call Themes & Trends

Management Commentary

• Strategic focus: “We are focused on supporting our existing customers and getting the G4X spatial sequencer to market as quickly as possible… lay the foundation for a successful G4X launch in 2025” — CEO .
• Market need: “Spatial is quickly growing… throughput is a major limitation. We believe the G4X will be uniquely suited to address this pain point” — CEO .
• Economics: “We plan to pass along cost savings and address a pain point for customers while supporting a high-margin, sustainable business” — CEO .
• Financial discipline: “Cash burn for the first quarter was approximately $23.2 million… We expect our cash burn in the second quarter to be lower sequentially” — CFO .
• Installed base performance: “Uptime across the network for the last few months has been really strong in the mid-90%… support minimally” — CEO .

Q&A Highlights

• G4X productization steps: expanding from 150 to 300 genes for Q1 product; hardening bioinformatics, software, and protocols across tissues to enable kit commercialization .
• Resource allocation: installed base support manageable (all U.S., uptime mid-90%); many G4 customers expected to transition to G4X, support infrastructure retained but lean .
• Expense trajectory: Q2 OpEx guided down 10–15% sequentially; further reductions in 2H as savings ramp .
• Funnel development: deep services funnel across academia, biopharma, CRO; >12 early-access prospects; prioritizing high-volume, low-customization projects .
• Launch cadence: early-access late Q4 2024; broader commercialization around Q2 2025; may extend early-access based on demand .
• Publications timing: targeting late-2024 publications post 300-gene panel availability .
• Differentiation vs incumbents: SBS chemistry optimized for tissue; large imaging area, fast four-color Z-stack imaging; deep IP around sequencing in spatial .

Estimates Context

• Wall Street consensus from S&P Global for Q1 2024 (EPS and revenue) was unavailable via the tool due to missing mapping; as a result, beats/misses vs consensus cannot be determined at this time (S&P Global consensus data not available).
• Given negative gross profit and sequential revenue decline vs Q4 ($0.44M vs $1.08M) and YoY decline vs Q1 2023 ($0.86M), sell-side models may need to reflect slower near-term pull-through and a services-led bridge to G4X placements .

Key Takeaways for Investors

• Near-term revenue remains modest and volatile given the reagent rental/evaluation mix and early-stage installed base; Q1 revenue $0.44M with negative gross profit due to launch economics .
• The investment case increasingly hinges on G4X: services monetization in 2H 2024, select early-access units late Q4 2024, broader commercialization targeted around Q2 2025 .
• Cost actions are starting to flow through: expect Q2 OpEx down 10–15% sequentially and lower cash burn; watch 2H for fuller impact and runway progress .
• Validation catalysts: initial publications expected later in 2024, KOL testimonials, and service case studies — critical for accelerating early-access and demand .
• Competitive posture: management emphasizes differentiated spatial throughput and capabilities vs incumbents; if sustained, could drive superior consumables pull-through on G4X .
• KPIs to monitor: shipments/installed base, consumables pull-through, services backlog and execution, publication cadence, and burn trajectory .
• Trading lens: stock likely sensitive to spatial milestones and cash burn cadence; any acceleration in services revenue or clearer commercialization timeline could be positive catalysts .