Zomedica Corp. (ZOM)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 delivered a record first-quarter with revenue of $6.262M (+14% YoY) and 66% gross margin; Diagnostics grew ~87% YoY and Therapeutic Devices +9% YoY, while consumables represented 64% of sales .
• Management reiterated FY24 revenue guidance of $31–$35M and expects sequential revenue increases with a back-half weighting; gross margin framework remains 65–70% .
• Operating investments (notably Qorvo Biotechnologies integration, R&D and commercial scale-up) increased OpEx and widened net loss to $9.16M; liquidity remains strong at $90.9M with no debt and expected FY24 cash burn of $12–$18M .
• Execution catalysts in 2024: CE Mark obtained for VetGuardian with European launch beginning; expected CE Marks for TRUFORMA and TRUVIEW; at least five new TRUFORMA assays targeted in 2024; AI features coming to TRUVIEW and VetGuardian; robotic capacity for ~1M TRUFORMA cartridges/year supports scale and margins .
• Wall Street consensus estimates (S&P Global) for Q1 2024 EPS and revenue were unavailable for ZOM, so no beat/miss determination is possible; coverage remains limited for this micro-cap [GetEstimates error].

What Went Well and What Went Wrong

• What Went Well

  • Record Q1 revenue and strong product momentum: “we delivered the strongest first quarter in company history” with revenue up ~14% YoY to $6.3M and gross margin at 66% .
  • Diagnostics acceleration and product pipeline: Diagnostics revenue +~87% YoY; management plans “at least 5 new assays” in 2024 across dogs, cats, and horses, alongside TRUFORMA platform upgrades (multiplexing, over‑the‑air updates) .
  • International expansion: CE Mark achieved for VetGuardian; CE Mark for TRUFORMA expected soon and TRUVIEW “shortly,” opening EU commercialization; broader international sales strategy outlined .

• What Went Wrong

  • Higher operating expense base: OpEx rose to $14.5M (+28% YoY) on integration, R&D, accounting/audit and NYSE compliance costs, widening net loss to $9.16M (vs. $6.39M) .
  • Gross margin down vs. last year: 66% vs. 70% in Q1 2023 due to integration/new launch mix; adjusted for QBT and one‑time items, gross margin was “over 69%,” implying underlying margin resilience but near‑term mix pressure .
  • Listing/structure overhangs: Management reiterated no share repurchase and noted prior shareholder opposition to a reverse split; listing compliance remains a focus and may remain an investor overhang near term .

Financial Results

Segment and mix – Q1 2024

KPIs – Q1 2024

Notes: Revenue grew 14% YoY (Q1 2024 $6.262M vs. Q1 2023 $5.482M) . Gross margin was 66% (vs. 70% Q1 2023) with commentary that adjusting for QBT and one‑time items margin would be “over 69%” . Net loss was $9.16M; weighted average shares 979.95M .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered the strongest first quarter in company history.”
• “We expect to launch at least 5 new assays this year with 2 assays for horses 2 for dogs and 1 for cats with many more in development for launch next year.”
• “CE Marking for VetGuardian… allows the platform to be sold throughout the EU… we expect CE Mark for TRUFORMA yet this quarter… and TRUVIEW CE‑Mark also shortly.”
• “We… are in the process of installing cutting‑edge automated robotic equipment, allowing us to produce 1 million cartridges per year in a single shift… we expect this technology… to allow us to improve margins as TRUFORMA continues to scale.”
• “We continue to expect full year revenue in the range of $31 million to $35 million… revenue should increase sequentially… majority… in the back half of the year.”

Q&A Highlights

• Profitability and capital allocation: Management targets cash flow breakeven at ~$50M revenue run‑rate in late 2025; reiterated no buyback given priorities (R&D, commercialization, M&A flexibility) and limited impact on long‑term value .
• EU approvals and international: CE Mark achieved for VetGuardian; TRUFORMA CE expected this quarter; TRUVIEW CE “shortly” enabling EU rollout; many distributors have cold-chain logistics for TRUFORMA cartridges .
• Liquidity and burn: Ended Q1 with $90.9M cash/securities; Q1 operating burn ~$4.4M within FY burn plan of $12–$18M; no debt .
• Corporate actions/listing: Reverse split not on ballot following shareholder vote; company still evaluating long-term compliance options but no near-term reverse split .

Estimates Context

• S&P Global consensus for Zomedica’s Q1 2024 EPS and revenue was unavailable in our SPGI feed; as a result, we cannot determine beat/miss versus Street for this quarter (coverage is limited). Values retrieved from S&P Global were unavailable via the tool for ZOM (mapping error).

Key Takeaways for Investors

• Zomedica is sustaining high gross margins (mid-to-high 60s) while diversifying its Diagnostics portfolio and scaling VetGuardian/TRUFORMA—favorable for long-term operating leverage as mix shifts to consumables and services .
• FY24 guidance maintained with sequential growth and back-half weighting; watch quarterly cadence and Diagnostics momentum to track the $31–$35M goal .
• 2024 catalysts: EU commercialization (VetGuardian CE live; TRUFORMA/TRUVIEW CE expected), AI-enabled diagnostics, and five new TRUFORMA assays—key drivers for adoption and higher‑margin recurring revenue .
• Investments are intentionally elevated (integration, R&D, salesforce) and are widening GAAP losses near term; management still expects FY24 cash burn of $12–$18M with a sizable cash cushion and no debt .
• Monitor TRUFORMA scale (robotic capacity, multiplex cartridges, over‑the‑air updates) and installed base growth as leading indicators for consumables pull‑through and gross margin trajectory .
• Structural/listing considerations (no buyback, no current reverse split) may remain an overhang on sentiment, but execution on revenue milestones and EU expansion could be stock catalysts .
• Near-term trading setup: seasonality favors 2H; evidence of CE-driven orders, multi‑monitor VetGuardian deals, and assay launches could support estimate revisions upward on revenue/mix; absence of Street coverage may amplify volatility around prints .