Bionano Genomics, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights:

• Shifted go-to-market strategy in September 2024 to focus on routine optical genome mapping users, with four strategic pillars: support installed base, drive utilization via software, build support for reimbursement, improve profitability.
• Consumable sales grew due to core routine users (118 customers account for >80% of consumables purchases).
• VIA software installed at over 160 OGM customers.
• Publication growth in OGM applications, including 19% growth in total publications and 39% growth in combined clinical research and cell and gene therapy.
• CPT code for OGM in hematologic malignancies effective Jan 1, 2025.

Segment Performance:

• Fourth Quarter 2024: Total revenue was $8.2 million, a 24% decrease from Q4 2023. GAAP gross margin was 42%, non-GAAP gross margin was also 42%. Operating expense was $15.4 million (GAAP) and $10.6 million (non-GAAP).
• Full Year 2024: Product revenues (instruments, consumables, software) were $27 million, up 1% from 2023. Consumables sales were $12.8 million, up 14% from 2023; software sales were $6.2 million, up 11% from 2023. Americas region sales up 9%, Europe, Middle East, Africa up 10%. Flow cells sold in 2024: 30,307 (15% increase from 2023). GAAP gross margin for full year 2024 was 1% (non-GAAP was 35%).

Guidance:

• Full year 2025 revenues expected in the range of $29 million to $32 million.
• First quarter 2025 revenues expected in the range of $6.2 million to $6.3 million.
• Expect to install 15 to 20 new optical genome mapping systems, primarily at routine use sites.

Risks: No specific detailed risks discussed beyond standard forward-looking statement disclaimers regarding potential differences between expected and actual results due to various factors.

Question and Answer: Q: In terms of guidance, based on what you guys are providing, it kind of implies flattish growth year-over-year. Obviously you talked about the strategic prioritizations that the company has gone under, and so would you have a sense of kind of what the core revenue growth is contemplated, in terms of your guidance for '25?

A: Yes, it's all core now, so [$29.1 million core going to $29 million to $32 million].

Q: Just curious about whether there are Saphyr trade-ins taking place as well, or just as we look at the install base, should we expect continued placements of Stratys?

A: Yes, we're focusing on routine use customers, 118 existing, revenue per customer around 85k-90k, not focusing on install base number due to trade-ins and backup systems.

Q: Just on the Stratys compute, which you launched in collaboration with NVIDIA, just kind of curious, kind of what the early feedback has been, and also how you expect that to drive continued utilization for your core customers?

A: Positive, compatible with Stratys system, software updates to improve speed, training on VIA to increase sample running.

Q: On the focus with customer acquisition, you did mention you're not looking to aggressively seek customer acquisition now with the expense reduction complete. But are there any areas that you do plan to continue looking at, acquiring new customers that may be lower cost of acquisition, or higher utilization, where they may go right into that 118 group of routine users?

A: Yes, will add new customers in target geographies, leveraging CPT code effectiveness, data from publications, acceptable customer acquisition cost.

Q: On the Category 1 CPT code, obviously there's been a goal for a while, good progress. But is that something that's application specific, or could this be applied across any use of OGM?

A: Specific to hematologic malignancies, but other applications have PLA codes, potential for CPT code expansion.

Q: On driving utilization through software adoption, specifically just - if you could go into the mechanics of how VIA adoption, could support increased utilization, and what the interplay is there with menu expansion?

A: VIA automates curation and reporting, speeds up lab processes, allows running more samples, enabling menu expansion.

Q: On the shift towards focusing utilization of your existing installed base, could you just share some color, on how the strategy is playing out? I heard you on the 85,000 to 90,000 rev per customer metric. I understand its early days, but do you see room for further expansion there, or do you think you're kind of saturated there?

A: Strategy working, consumable sales grew 14% despite headcount reduction, substantial room for revenue per customer to increase.

Q: On the reimbursement front. Could you share if OGM appeared on the Medicare clinical lab fee schedule as planned, and then just any other updated timing we should be aware of, on the LCD front?

A: Effective Jan 1, 2025, rate around $1,300, potential for price reconsideration, processes in transition.

Q: On other applications in the pipeline for routine user group.

A: Primary application is hematologic malignancies, second is constitutional genetic disorders, solid tumors emerging, cell and gene therapy starting.