Alpha Teknova, Inc. Q4 FY2024 earnings call

• In 2024, supported 48 clinical customers (up from 34 in 2023), recognized $37.7 million in total revenue (11% growth excluding a large 2023 order). - Launched three new offerings: Build Tech, Express Tech, and RUO Plus. - Reduced operating expenses by $8.1 million in 2024 compared to 2023, excluding nonrecurring charges. - Finished 2024 with a total cash outflow of $13.5 million, better than initial guidance. - Catalog business had ~60% of revenue, custom biopharma segment grew ~40%, with cell and gene therapy-related sales at 27% of total revenue.

In 2024, catalog reagents represented approximately 60% of total revenue, growing low single digits but 7% in the second half of the year. The custom biopharma segment, which includes sales to biopharma (70% of custom revenue, 25% of total revenue) and other end markets, grew about 40% in 2024. Lab Essentials revenue was $28.9 million in 2024, consistent with 2023, driven by an 8% increase in customers offset by a 7% decrease in average revenue per customer. Clinical Solutions revenue was $7.1 million in 2024, a 5% increase from 2023, with a 110% increase in the fourth quarter of 2024.

• 2025 total revenue guidance: $39 million to $42 million (midpoint implies 7% growth from 2024). - Expect gross margins in the high twenties percentage range in 2025. - Free cash outflow expected to be less than $12 million in 2025. - Amended and extended credit facility, resetting maturity to March 2030 with increased principal amount.

• Macro-economic uncertainty causing some customers to delay orders or reduce budgets. - Potential impacts from tariffs and NIH funding, though catalog business has limited exposure to NIH and is mostly domestic.

Q: Concern about softening at the start of the year and which customers are affected?

A: Softening seen more in late January/February, more in smaller companies, life science tools, and mid-sized biotech with capital raise issues. Large pharma catalog business still doing well.

Q: Composition of new customer pipeline?

A: Most new customers are preclinical or phase one, but successful in converting phase two or later customers over 12-18 months.

Q: Updated number of cell and gene therapy customers?

A: Over 100 total cell and gene therapy customers, not supporting any commercialized cell and gene therapies yet.

Q: Phasing of revenues in 2025?

A: First quarter expected to be lowest, then progressing up to Q2, Q3, with Q4 possibly lower due to fewer business days.

Q: Time for new clinical customers to reach mature levels?

A: Typically 1 to 1.5 years to ramp up from tens of thousands to hundreds of thousands of dollars in revenue.

Q: Impact of potential 25% tariff on drugs imported to US?

A: Possible opportunity if customers shift production to US, but limited exposure to NIH funding with only 4% of sales to academic institutions.