Standard BioTools, Inc. Q3 FY2023 earnings call

• Michael Egholm reviewed progress against top objectives: fuel growth by harnessing differentiated life science tools (third quarter revenue in line with expectation, 10% revenue growth YTD, 13% growth excluding discontinued product lines), apply operating discipline to enhance profitability (uncompromising focus on continuous improvement and lean principles delivered progress like non-GAAP gross margin expansion, operating expense improvement, operating cash used improvement), and leverage platform to create scale (planned merger with SomaLogic). - Jeff Black discussed financial results: third quarter revenue $25.4M, 10% YTD revenue growth excluding discontinued products, non-GAAP gross margin for Q3 expanded to 57% (830 basis points improvement), YTD non-GAAP gross margin improved to 60% (1,000 basis points improvement), non-GAAP operating expenses down 21% YTD, operating cash used decreased YTD by $47M (58%).

Instrument revenue is about 34% of revenue and has grown 47% year-to-date. Consumables were about 40% of revenue year-to-date while services were about 25%. Total proteomics revenue was down 4% in the third quarter but up 22% year-to-date, led by the Hyperion XTi. Total genomics revenue grew 3% in the third quarter and 5% when excluding discontinued products. Year-to-date, genomics was down 4% but up 1% when excluding discounted products. Recurring sources of consumables and service revenue were about 65% of total revenue year-to-date.

• Updated full-year 2023 revenue guidance to $100 million to $105 million. - Updated non-GAAP gross margin outlook for full year to about 60%, a 900 basis point increase over 2022. - Merger with SomaLogic on track for first quarter of 2024, expect to file preliminary proxy statement in coming days. - Expect approximately $80 million in annual cost synergies by 2026 through elimination of redundant public company costs and application of lean principles. - Combined entity expected to have over $500 million in cash post-Q1 close to self-fund organic and inorganic growth.

• Macro-economic environment challenges. - Variability in quarter-to-quarter instrument placements and timing of customer orders. - Residual headwinds related to legacy service-related costs, product mix, and capacity utilization. - Uncertainties in developing and maturing new OEM relationships.