Singular Genomics Systems, Inc. (OMIC)·Q2 2024 Earnings Summary

Executive Summary

• Q2 revenue was $0.7M (vs. $0.4M in Q1; $0.5M in Q2’23), with 2 G4 systems shipped and the highest quarterly consumables orders to date; gross profit was -$0.2M and operating expenses declined to $22.6M, driving net loss to $21.3M .
• Management reiterated G4X timelines: first early access placements at end of Q4 2024, additional early access in early Q1 2025, and commercial launch toward end of Q2 2025; services funnel and instrument interest exceed 50 opportunities, citing unmet needs for throughput and cost per sample .
• Liquidity actions: an amended facility lease reduced long‑term lease obligations by ~$50M; a $4.5M upfront lease modification payment will make Q3 cash burn higher than Q2, but management does not expect a material impact to cash runway guidance (extending to late 2026) .
• No S&P Global consensus was available for Q2’24 EPS/revenue for OMIC, so we cannot quantify beats/misses versus Street estimates (S&P Global data unavailable).

What Went Well and What Went Wrong

• What Went Well

  • Consistent progress on G4X with strong customer interest; management: “We’re on track to do our first early access later this year… and… a commercial launch towards the end of Q2 next year.”
  • Improved G4 fleet metrics and monetization: system uptime averaged 95% and annualized consumables pull‑through was ~$60,000 in Q2, roughly double Q1; Q2 delivered the highest quarterly consumables orders and shipments to date .
  • Cost discipline and balance sheet optimization: operating expenses fell to $22.6M from $27.5M YoY; lease amendment reduced long‑term obligations by ~$50M and supports development/commercialization focus for G4X .

• What Went Wrong

  • Gross margin remained negative (-$0.2M), reflecting discounted G4 instrument pricing, reagent rental placements, and higher support costs, partially offset by better consumables margins .
  • Sequential reagent rental placements stepped down (5 in Q1 to 1 in Q2) as resources shift to G4X; the company is prioritizing maintaining existing sequencer customers and spatial conversion over expanding sequencer‑only placements .
  • Near‑term cash burn: Q2 cash burn was ~$17.5M; Q3 burn will be higher due to a $4.5M lease modification payment (though runway guidance to late 2026 is unchanged) .

Financial Results

Notes: Management attributes negative gross margin to discounts, reagent‑rental/non‑capital models, and higher support costs, partially offset by higher‑margin consumables .

KPIs and mix:

• Instruments shipped (units): Q4’23: 8; Q1’24: 6; Q2’24: 2
• Q2 revenue mix: ~$0.4M consumables, ~$0.3M instrument (one capital sale recognized; revenue from the second instrument expected over time via consumables) .
• Fleet health/utilization: 95% uptime in Q2; highest quarterly consumables orders and shipments in Q2 .
• Cash, cash equivalents & short‑term investments: Q4’23: $173.9M; Q1’24: $150.7M; Q2’24: $133.2M .

Segment breakdown: Not applicable; the company does not report by segment in these materials.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We progressed development of the G4X Spatial Sequencer while supporting our G4 customers… The early interest in our Spatial Technology Access Services is an encouraging sign that the unique capabilities and higher sample throughput of the G4X will serve an unmet need in the market.” — Drew Spaventa, CEO .
• “System uptime has been averaging 95% during the quarter. Average annualized consumable pull‑through for the installed base was approximately $60,000 in Q2, which was roughly double Q1.” — Andrew Spaventa .
• “We successfully amended a long‑term lease obligation… reducing our long‑term lease obligations by approximately $50 million… The amendment included a one‑time upfront lease modification payment of $4.5 million… we expect our Q3 2024 cash burn to be higher than the second quarter… [we] do not expect… a material impact on… cash runway extending to late 2026.” — Dalen Meeter, CFO .
• “We’re on track to do our first early access later this year… and… plan to have a commercial launch towards the end of Q2 next year.” — Andrew Spaventa .

Q&A Highlights

• Timelines: Management reaffirmed first early access at end of Q4’24, additional early access early Q1’25, commercial launch toward end of Q2’25 .
• Demand/funnel: Over 50 combined opportunities (services and instruments); customers emphasize throughput and cost per sample; 300‑gene/∼12‑protein panel viewed as adequate for many use‑cases .
• G4 placements strategy: Step‑down in reagent rental placements is intentional; focus on maintaining existing network and converting to G4X, which targets higher ASPs .
• Conversion potential: About two‑thirds of current G4 customers have expressed interest in spatial; company expects fewer than two‑thirds to convert initially but has line‑of‑sight to early conversions post‑launch .
• Cash and services cost: Spatial services lab costs are incorporated in cash runway planning; Q3 burn higher due to $4.5M lease payment, but runway to late 2026 unchanged .

Estimates Context

• S&P Global/Capital IQ consensus for Q2’24 EPS and revenue was unavailable for OMIC at the time of this analysis due to a missing mapping in the SPGI dataset; accordingly, we cannot quantify beats/misses versus Street expectations (S&P Global data unavailable).

Key Takeaways for Investors

• Execution on spatial remains the core narrative: early access (end Q4’24) and targeted Q2’25 launch were reaffirmed; demand signals are strong with >50 opportunities, especially where throughput and cost are constraints .
• Operational metrics improved: 95% uptime and record consumables orders support the conversion thesis of the installed base to G4X once available .
• Financial discipline is evident: OpEx declined YoY; lease amendment reduced obligations by ~$50M, enhancing long‑term flexibility even as Q3 burn is temporarily higher from a one‑time payment .
• Mix shift toward consumables and services can improve quality of revenue over time; near‑term, gross margin remains negative due to pricing and support costs on early fleet .
• Stock setup: Near‑term catalyst risk skewed to program updates (early access placements, services data/publications) and commercial timeline confirmations; liquidity actions reduce long‑term risk, but absence of Street estimates and small base revenue can amplify volatility around incremental updates .
• Watch for: (1) early access execution and initial external data sets/publications, (2) sustained consumables pull‑through improvements, (3) clarity on 2025 commercialization scale and initial customer conversions, and (4) trajectory of cash burn post‑Q3 one‑time payment .

Appendix: Additional Quantitative Details

Operational KPIs

Liquidity

Narrative drivers and explanations:

• Negative gross margin due to discounted instrument sales, reagent rental/non‑capital models, and higher support costs; partially offset by higher‑margin consumables .
• OpEx YOY decline driven by lower headcount and lapping a non‑cash PP&E adjustment in Q2’23 .
• Strategy pivot intentionally deemphasizes new sequencer‑only placements ahead of spatial launch to optimize for higher ASP opportunities .

All figures sourced from company filings and the Q2’24 earnings call as cited. S&P Global Street estimates were unavailable for OMIC for Q2’24 at the time of analysis.