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Singular Genomics Systems, Inc. (OMIC)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 2023 revenue was $1.081M, up 41% year over year and 134% quarter over quarter, driven by eight G4 instrument shipments; net loss was $23.249M and EPS was -$0.32 .
  • Management unveiled the G4X spatial sequencer and shifted strategic focus toward spatial sequencing and services; implemented an additional ~20% workforce reduction, targeting ~$20M annualized OpEx savings and extending cash runway to late 2026 .
  • Gross margin was negative (-$0.457M) due to customer discounts and higher installation/training/support costs associated with placements; instrument revenue was ~$0.9M and consumables ~$0.2M .
  • Consensus estimates from S&P Global were unavailable; third-party sources indicate EPS beat (-$0.32 vs -$0.34) and revenue in-line to above expectations (reported $0.73M–$1.08M consensus range), highlighting a modest beat narrative driven by shipments and mix .

What Went Well and What Went Wrong

  • What Went Well
    • “We shipped 8 G4 instruments during the quarter and generated $1.1 million in revenue, our highest quarterly total yet.” – CEO Drew Spaventa .
    • G4X spatial sequencer unveiled with multi-modal readouts (direct RNA sequencing, targeted transcriptomics/proteomics, fluorescent H&E) and high throughput (40 cm² imaging area), resonating strongly with early collaborators and generating >200 qualified leads at AGBT .
    • Cost actions (20% workforce reduction plus non-personnel cuts) expected to reduce annualized OpEx by ~$20M and extend cash runway to late 2026, supporting the pivot to spatial and services .
  • What Went Wrong
    • Gross margin negative in Q4 due to discounts and higher install/training/support costs, resulting in -$0.457M gross profit, versus approximately flat gross margin in Q4 2022 .
    • Sales cycle conversion remains slower than expected; mix shifting toward reagent rentals/evaluations vs. capital purchases, delaying revenue recognition timing .
    • Competitive pressure intensified (Illumina discounting, creative deal structures), contributing to longer decision cycles and stalled funnel progression .

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Revenue ($USD Millions)$0.505 $0.462 $1.081
Gross Profit (Loss) ($USD Millions)-$0.092 -$0.065 -$0.457
Operating Expenses ($USD Millions)$27.511 $24.474 $24.824
Net Loss ($USD Millions)$25.578 $22.360 $23.249
Diluted EPS ($USD)-$0.35 -$0.31 -$0.32
Cash, Cash Equivalents + ST Investments ($USD Millions)$206.7 $190.7 $173.9

KPI and Operating Detail

KPIQ2 2023Q3 2023Q4 2023
G4 Instruments Shipped (Quarter)3 5 8
Installed Base at Period End11 16 24
Instrument Revenue ($USD Millions)N/AN/A~$0.9
Consumables Revenue ($USD Millions)N/AN/A~$0.2
Notes on Gross MarginN/AN/ANegative due to discounts and installation/training/support costs

Versus Estimates

MetricQ4 2023 ActualConsensusBeat/Miss
EPS ($USD)-$0.32 -$0.34 (non-SPGI) Beat
Revenue ($USD Millions)$1.081 ~$0.73 (non-SPGI) Beat
Note: S&P Global consensus was unavailable via our estimates tool for OMIC; external sources differ on revenue consensus (“in-line” vs ~$0.73M), reflecting limited analyst coverage .

Guidance Changes

MetricPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
Operating Expenses (Annualized)2024 onwardExpense reductions in Oct 2023; runway into early 2026 Additional ~20% workforce reduction and non-personnel cuts; ~$20M annualized OpEx savings; runway to late 2026 Lowered OpEx; runway extended
G4X Program Timing2024Spatial program in development; more info early 2024 G4X unveiled; upgrades expected available to G4 customers by end of 2024; early access program targeted late 2024; services starting in Q2–Q3 2024 Milestones clarified/advanced
Go-to-Market Mix2024Mix shifting to reagent rentals/evaluations; more color on Q1 call Leaning into services; more discerning on alternative methods vs. capital sales; focus on high-pull-through early access placements Strategy refined toward services
Revenue Outlook2024Q4 placements “slightly higher than Q3”; no formal guidance No specific cadence/commentary yet; will provide updates next quarter Maintained “no formal guidance”

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2023)Trend
Spatial Sequencing PivotPX/spatial development ongoing; TAP collaborations planned; more details early 2024 G4X unveiled with direct RNA sequencing, targeted transcripts/proteins, fluorescent H&E; >200 leads; early access and services ramp in 2024 Strongly increasing focus
Sales Model Shift (Reagent Rentals/Evals)Shift toward reagent rentals/evaluations slowing revenue recognition; capital mix ~60% to date Leaning into services; more discerning on non-capital methods; pursuing high-pull-through early access placements Greater tilt to services
Cost Actions & Runway10% RIF in Oct-2023; runway into early 2026 Additional ~20% RIF; ~$20M OpEx savings; runway to late 2026 Further cost-down; runway extended
Installed Base & Pull-ThroughShipped 3 (Q2), 5 (Q3); consumables shipments +50% QoQ in Q3; pull-through ramping Shipped 8 (Q4); installed base 24; Q4 consumables ~$0.2M; instrument revenue ~$0.9M Acceleration in placements
Competitive DynamicsLonger cycles; intensified competition; Illumina discounting Continued caution; not pounding pavement on G4-only; focusing resources on G4X Rebalanced focus away from G4-only
PX Platform StatusIn development; more info in early 2024 PX on hold; all hands on G4X PX deferred

Management Commentary

  • “We shipped 8 G4 instruments during the quarter and generated $1.1 million in revenue, our highest quarterly total yet… bringing our total G4 shipments to 24 as of December 31.” – Drew Spaventa .
  • “The G4X is designed to offer novel capabilities… direct sequencing of RNA in situ… targeted transcripts, targeted proteins and a fluorescent H&E… at an unprecedented scale, with 40 square centimeters of flexible imaging area and single-day run times.” – Drew Spaventa .
  • “We recently made the difficult decision to reduce our head count by approximately 20%… extend our cash runway into late 2026… while still supporting our current G4 customers, and focusing our development work to bring the G4X to market as fast as possible.” – Drew Spaventa .
  • “Gross margin was negative because of both additional discounts… as well as higher costs associated with the installation, training and support of our system placements.” – CFO Dalen Meeter .

Q&A Highlights

  • Strategic pivot: Management is prioritizing G4X development and services, de-emphasizing near-term pursuit of G4-only placements; will provide more color on trajectory in Q1 2024 call .
  • Commercial strategy: Early access instrument placements will be selective, targeting sites with high consumable pull-through; services serve as an on-ramp for demand and future instrument sales .
  • Revenue cadence: Too early to guide; reorganization ongoing; updates expected next quarter .
  • PX program: Put on hold; all resources focused on bringing G4X to market .
  • Cost investment: Despite reductions, management contemplates modest reinvestment to support services infrastructure and go-to-market needs .

Estimates Context

  • S&P Global consensus was unavailable for OMIC via our estimates tool; we note this explicitly.
  • Third-party sources suggest EPS beat: -$0.32 actual vs. -$0.34 consensus (GenomeWeb) and revenue in-line to above consensus ($1.081M actual vs. ~$0.73M consensus noted by InvestorPlace); limited analyst coverage likely drives divergence in reported consensus figures .

Key Takeaways for Investors

  • The quarter’s revenue inflection was driven by record instrument shipments, but gross margin was negative due to discounts and onboarding costs; near-term mix and service-led strategy may continue to pressure margins until spatial/services scale .
  • The G4X launch positions OMIC in a faster-growing spatial/multiomics segment with higher ASPs and margin dollars per kit—management expects materially higher consumable pull-through vs. G4, a potential medium-term lever for improving unit economics .
  • Cost actions (20% RIF, ~$20M OpEx cuts) and an extended runway to late 2026 provide time to execute the spatial strategy and scale services before broader commercialization—key to the thesis in 2024–2025 .
  • Expect selective early access placements and services revenue in 2H 2024; publications and collaborator data will be critical validation milestones that can catalyze sentiment and adoption .
  • Competitive dynamics remain intense in sequencing; refocusing away from G4-only pursuit mitigates headwinds, but execution risk shifts to delivering robust G4X productization and customer onboarding .
  • With S&P Global consensus unavailable and sparse Street coverage, expect volatile narrative around “beats/misses”; anchor on company-reported metrics and call commentary for trading decisions .
  • Near-term trading: watch for Q1 commentary on services uptake and early access pipeline; medium-term thesis depends on spatial differentiation, consumables pull-through, and evidence of economic uplift vs. G4 .