Standard BioTools Inc. Q3 FY2024 earnings call

• Welcomed Alex Kim as acting CFO and Sean Mackay. - Q3 revenue was $45M, sequentially up 21% but down 5% YOY; YTD revenue $128M, down 9% vs 2023. - Three quarters into SomaLogic integration, operationalized $80M synergies, 24% YTD reduction in non-GAAP operating expenses, 50% improvement in adjusted EBITDA in Q3. - Operational achievements: 98% on-time delivery for products/services (vs 78% two years ago for legacy), complaints per installed base for highest selling instrument reduced by over four-fold. - Consumables up 13% YOY in Q3, key strategic focus; launched single SOMAmer as minimal viable product. - Partnership with Illumina: distributed SomaScan solution on Illumina platform, full commercial release H1 2025. - SBS deeply embedded, improving forecasting, delivery performance, and quality.

In the third quarter, revenue was $45 million. Revenue breakdown by segment: Consumables revenue was $14 million in Q3, up 13% year-over-year, and $45 million year-to-date, up 21% compared to 2023. Instruments revenue was just under $6 million in Q3, down 42% year-over-year, and just under $20 million year-to-date, down 28% compared to 2023. Lab services revenue was $18 million in Q3, up over 1% year-over-year, and $41 million year-to-date, down 23% compared to 2023. Field services revenue was just over $6 million in Q3, down 4% year-over-year, and $19 million year-to-date flat compared to 2023. By application segments, proteomics business (including SomaScan, CyTOF and IMC product lines) was 77% of revenue, down 4% for the quarter and down 10% year-to-date. Genomics business (represented by Biomark product line) was 23% of revenue, down 8% for the quarter and down 7% year-to-date.

• Reiterated full-year 2024 revenue guidance of $170 million to $175 million. - Targeted adjusted EBITDA break even for the full year 2026. - Focus on scaling the business, driving end market diversification, evolving to higher margin consumable offerings. - Well capitalized to advance strategic vision of building a scaled and profitable life science company.

• Industry challenges: customer budgets tight, conservative purchasing behaviors impacting CapEx equipment. - Integration risks: ongoing one-time costs, timing of year-end marketing investments. - Market uncertainties: impact of macroeconomic conditions on instrument sales, particularly in China; elongating sales cycle in China due to external capital spending constraints.

Q: Quantify what percent of assay services revenue in 3Q was timing based?

A: Favorable timing from a few large customer projects, with a $15 million to $20 million headwind from top customers year-over-year due to prior year's favorable timing.

Q: On the instrument side, any green shoots or China update?

A: Funnels are building, China looking a bit better but not expected to impact Q4; cautious optimism; doing well in Americas, rest of Asia (Japan, Korea), Europe rebuilding funnels after installing new leader.

Q: Instrument revenue outlook for 2025?

A: No specific directional guidance yet, but encouraged by Illumina partnership long-term with its broad customer base and scalable technology.

Q: Delayed projects in Q4?

A: Favorable timing this year vs last, with SBS providing better visibility on project timelines regarding POs, sample collection, and run times.