Executive Summary

Q3 2024 revenue was $2.0M, up 34% year over year; net loss improved to $(10.1)M or $(0.57) per share versus $(15.4)M or $(3.45) per share in Q3 2023 .
Management issued Q4 2024 sepsis product revenue guidance of $2.5–$3.5M and implicitly lowered full-year 2024 guidance from $10–$11M (given after Q2) to $8.5–$9.5M in October’s business update; the Q3 print reiterated only the Q4 guide .
Commercial catalysts were announced/advanced: an exclusive U.S. distribution agreement with Cardinal Health, a co-marketing collaboration with Prxcision’s AI decision-support platform, and FDA clearance for T2Candida Panel pediatric use .
Liquidity and listing remain near-term watch items: cash was $2.1M at quarter-end; company raised $4.3M via ATM in Q3 and $3.2M post-quarter; NASDAQ sent a market value deficiency notice on Nov 7, 2024, which the company has appealed .

What Went Well and What Went Wrong

What Went Well

U.S. T2Bacteria Panel momentum and international instrument traction: T2Bacteria U.S. sales rose 173% YoY; international T2Dx instrument sales rose 78% YoY; 11 instrument contracts were executed in the quarter (1 U.S., 10 international) .
Channel and ecosystem expansion: exclusive U.S. distribution with Cardinal Health expected to “greatly expand” access to >6,000 U.S. hospitals; management called the partnership “transformative” for growth and profitability .
Clinical/regulatory/IP wins: FDA clearance for T2Candida pediatric use; pipeline advanced toward U.S. T2Resistance submission; successful defense of a key direct-from-blood patent in Europe .

Quote: “We provide the only FDA‑cleared diagnostics able to detect sepsis‑causing pathogens directly from whole blood... in 3–5 hours... No other company in the world can make that claim.” – CEO John Sperzel .

What Went Wrong

Liquidity strain and listing risk: cash of $2.1M at 9/30; reliance on ATM financing; NASDAQ market value deficiency notice received Nov 7 .
Cost structure still heavy relative to scale: cost of product revenue ($4.1M) exceeded total revenue ($2.0M); operating loss $(10.2)M despite YoY improvement .
Outlook reset intra-quarter: full-year 2024 sepsis revenue framework moved from $10–$11M (after Q2) to $8.5–$9.5M in the October update, reflecting a more conservative ramp into Q4 .

Financial Results

Income statement highlights (YoY/QoQ context)

Metric	Q3 2023	Q2 2024	Q3 2024
Total Revenue ($M)	$1.472	$1.952	$1.985
Cost of Product Revenue ($M)	$3.925	$2.693	$4.101
Research & Development ($M)	$2.663	$3.361	$2.667
Selling, General & Admin ($M)	$5.980	$5.473	$5.378
Loss from Operations ($M)	$(13.607)	$(9.575)	$(10.161)
Net Loss ($M)	$(15.425)	$(9.243)	$(10.117)
Diluted EPS ($)	$(3.45)	$(0.66)	$(0.57)

Quarterly trend (2024)

Metric	Q1 2024	Q2 2024	Q3 2024
Total Revenue ($M)	$2.061	$1.952	$1.985
Net Loss ($M)	$(13.534)	$(9.243)	$(10.117)
Diluted EPS ($)	$(2.66)	$(0.66)	$(0.57)

KPIs and balance sheet

KPI	Q3 2024
Sepsis Test Panel Revenue ($M)	$1.4
Instrument Contracts (units)	11 (1 U.S., 10 OUS)
U.S. T2Bacteria YoY Growth (%)	173%
International Instrument Sales YoY Growth (%)	78%
Cash & Cash Equivalents ($M)	$2.083

Segment breakdown: Company reports total product revenue; within Q3, sepsis test panel revenue was $1.4M (rest attributable primarily to instruments/other products) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sepsis Product Revenue	FY 2024	$10.0–$11.0M (given with Q2 results)	$8.5–$9.5M (October business update)	Lowered
Sepsis Product Revenue	Q4 2024	N/A	$2.5–$3.5M	New

Notes: Management reiterated Q4 revenue guidance with Q3 results; full-year framework was reduced in the October 10 business update call; the Q3 8‑K/press release did not repeat full-year guidance .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2024)	Trend
AI/technology initiatives	No AI partner; focus on clinical data and pipeline (T2Resistance, T2Lyme)	Co-marketing with Prxcision’s AI decision support to pair rapid diagnostics with real-time antibiotic recommendations	Up
Supply chain / blood culture shortage & guidelines	FDA/CDC alerts about BD BACTEC bottle shortage; lobbying for guideline changes; opportunity for culture-independent tests	Continued emphasis on culture-independent value proposition; Lancet article cited; active lobbying	Stable/Supportive
U.S. distribution/channel	Evaluating “multibillion” partner (Q2)	Exclusive U.S. Cardinal Health distribution launched; training underway; expected to expand access to >6,000 hospitals	Up
Product performance	Record sepsis test revenue in 1H; T2Bacteria expansion to include A. baumannii	U.S. T2Bacteria +173% YoY; 11 instruments contracted (10 OUS)	Up
Regulatory/pipeline	T2Candida pediatric 510(k) pending; T2Resistance targeted Q3/Q4 2024 submission; T2Lyme LDT planned 2H24	FDA clearance for T2Candida pediatric; T2Resistance 510(k) now expected Q1 2025; T2Lyme LDT commercialization targeted for 2025 tick season	Mixed (wins + 1Q delay)
Cost structure/operations	Debt reduced ~80% via conversions; cost reductions; ERP improvements	Continued ATM raises; ADP PEO to save ~$0.4M; planned facilities consolidation to save ~$1.0M annually	Stable
Capital markets / listing	NASDAQ compliance plan and equity raises (Q1)	NASDAQ market value deficiency notice (Nov 7); company appealed and will present plan	Down

Management Commentary

Strategic message: Direct-from-blood testing remains a unique clinical advantage; pairing with enterprise distribution (Cardinal) and AI decision support (Prxcision) aims to accelerate adoption and improve stewardship. “We believe our agreement with Cardinal Health will be transformative” and “each will contribute meaningfully to revenue in 2025 and beyond” .
Competitive positioning: “We provide the only FDA‑cleared diagnostics able to detect sepsis‑causing pathogens directly from whole blood... in 3–5 hours” .
Commercial focus: “Third quarter revenue of $2.0M... included a 173% increase in U.S. T2Bacteria and 78% increase in international instrument sales; 11 T2Dx contracts executed” .
Cost/operations: Savings initiatives (PEO, real estate consolidation) and Oracle ERP expansion intended to improve COGS, inventory, and cash flow .
Pipeline: T2Resistance U.S. submission expected Q1 2025; T2Lyme LDT launch targeted for 2025 tick season; T2Candida pediatric cleared; Candida auris expansion planned .

Selected quotes:

“We believe our agreement with Cardinal Health will be transformative… expanding our access to the more than 6,000 U.S. hospitals” – CEO .
“By combining our direct-from-blood diagnostics with the AI-driven pRxcision platform, we believe we can empower clinicians… faster than ever before” – CEO .

Q&A Highlights

Cardinal Health timing and mix: Management expects Cardinal to increase both instrument and consumables in the U.S.; marketing already begun; majority impact in 2025 with potential modest Q4 2024 benefit .
U.S. vs. OUS placements: Expect mix to shift toward more U.S. instruments over time as Cardinal ramps; in Q3 only 1 of 11 was U.S. .
T2Lyme LDT revenue timing: Management targets contribution beginning in the latter half of Q2 2025 as the tick season ramps .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 revenue and EPS was unavailable due to data access limits at the time of this analysis; as a result, a beat/miss vs. consensus could not be assessed. Values would ordinarily be retrieved from S&P Global.
Where companies at T2’s market cap have limited coverage, estimate dispersion can be high; management’s intra-quarter reset (to $8.5–$9.5M for FY) suggests the Street may need to calibrate 4Q and early-2025 trajectories accordingly .

Key Takeaways for Investors

Channel leverage catalyst: Exclusive U.S. distribution with Cardinal Health materially expands reach; watch for early indicators (pipeline build, initial orders) in Q4 and a more pronounced revenue impact in 2025 .
Product pull-through: U.S. T2Bacteria growth (+173% YoY) and 11 instrument contracts highlight improved utilization and installed base expansion; sustaining this trajectory is key to operating leverage .
Liquidity and listing risk: Low cash ($2.1M) and ATM usage underscore near-term financing needs; NASDAQ deficiency increases execution risk and potential for further dilution .
Pipeline/regulatory: Near-term catalysts include T2Resistance 510(k) submission (Q1 2025) and T2Lyme LDT commercialization for the 2025 tick season; these can unlock incremental adoption/use cases .
Cost discipline: PEO and facility consolidation targeted to save ~$1.4M annually; monitor COGS trajectory given Q3 cost of product revenue remained above sales .
Narrative setup: Continued emphasis on culture-independent testing amid blood culture bottlenecks and guidelines debate may support medium-term adoption tailwinds .
Positioning: Stock reaction likely hinges on evidence of Cardinal-driven order flow, cash runway actions, and confirmation of Q4 guidance delivery into year-end .

Supporting materials and sources:

Q3 2024 8‑K and exhibits (press release, transcript), results and financial statements .
Q3 2024 press release (financials, cash, guidance) .
Business update and partner press releases (Cardinal Health, Prxcision) .
Prior quarters (Q1/Q2 2024) earnings and financials for trend/context .

T2 Biosystems, Inc. (TTOO)·Q3 2024 Earnings Summary