Standard BioTools Inc. Q4 FY2024 earnings call

• Successfully merged with SomaLogic under the Standard BioTools Business System (SBS), operationalizing $80 million in cost synergies ahead of plan.
• Phase 2 focuses on driving the commercial flywheel, evolving product mix, and expanding into key markets organically and inorganically.
• SomaScan platform is a key focus, with partnership with Illumina to develop a game-changing proteomics product launching in the first half of 2025.
• Strategic M&A is part of the strategy, with 4-6 targeted transactions over the next 2 years for derisked technologies with commercial potential.
• On-time delivery reached 98% in Q4 2024, and customer complaints on main instrument platform declined more than fourfold from Q4 2022.

In the fourth quarter, Standard BioTools delivered $46.7 million in revenue, and $175.1 million for the full year 2024, representing a 9% year-over-year decline. Consumables contributed 34% of revenue, with fourth quarter growth of 10% and full year growth of 18%. Instruments contributed 16% of revenue, with fourth quarter decline of 25% and full year decline of 27%. Lab Services contributed 33% of revenue, with fourth quarter decline of 18% and full year decline of 21%. Field Services contributed 14% of revenue, with fourth quarter decline of 10% and full year decline of 2%.

• Anticipates 2025 organic revenue between $165 million and $175 million, approximately a 3% decline at the midpoint.
• Sees adjusted EBITDA breakeven in 2026.
• Models mid-teens percentage decline in Americas academic revenue, equating to roughly a high single-digit million-dollars at the midpoint of the range.
• Expects growth in instruments as pharma activity and global capital spending slowly returns, but offset by lower Field Service revenue.

• Potential reduction in NIH spending, impacting Americas academic spend and likely delaying capital equipment purchases.
• U.S. export control interim final rule does not apply to CyTOF products at midpoint, but monitors broader U.S.-China trade dynamics.
• Tariffs on Canada, China, and potential reciprocal measures adding complexity to global trade, with low single-digit million dollar impact to gross margin and adjusted EBITDA if absorbed.

Q: Matt Stanton from Jefferies asked about color on NIH noise impact and breakdown of high single-digit million headwind.

A: Michael Egholm said they're laser-focused on executing and haven't seen much yet, with Alex Kim adding majority impact on instruments.

Q: Matt Stanton then asked about proteomics and Illumina partnership.

A: Michael Egholm mentioned excitement about the $1 billion opportunity, with Alex Kim stating '25 to be a transition year with stronger growth in '26 and beyond.

Q: Kyle Boucher from TD Cowen asked about China instrument stimulus and M&A timing.

A: Michael Egholm said strong team in China with better traction this year and M&A has its own timing with focus on derisked technologies.

Q: Paul Knight from KeyBanc asked about target cash burn in '25 and NIH budget impact.

A: Alex Kim said no short-term cash burn guidance, and Michael Egholm said they feel comfortable with current guidance.

Q: Paul Knight also asked about joint product with Illumina addressable market size.

A: Michael Egholm stated $1 billion is conservative given the potential of routine plasma proteomics.