Alpha Teknova, Inc. Q2 FY2025 earnings call

• Designed, built, and validated a state-of-the-art facility for custom clinical reagents, growing clinical customers from 13 in 2020 to 48 in 2024.
• Developed automated manufacturing processes, integrated IT infrastructure, and implemented lean production methods for operational efficiencies.
• Established Teknova as a leader in custom research and clinical reagents through commercial investments like rebranding, website enablement, and building a commercial organization.
• Q2 2025 results: Revenue up 7% YoY, fourth consecutive quarter of growth; adjusted EBITDA negative $0.8 million, best since public listing.

Lab Essentials: Revenue in the second quarter of 2025 was $7.8 million, a 2% increase from $7.6 million in the second quarter of 2024, contributing approximately 75.7% of total revenue ($10.3 million). Clinical Solutions: Revenue in the second quarter of 2025 was $2.1 million, a 32% increase from $1.6 million in the second quarter of 2024, contributing approximately 20.4% of total revenue. Gross profit for Q2 2025 was $4.0 million compared to $2.8 million in Q2 2024, with gross margin at 38.7% up from 29.2% in Q2 2024.

• Total revenue guidance for 2025 remains $39 million to $42 million.
• Gross margin target increased to low 30s for FY 2025.
• Expect operating expenses of at least $8 million per quarter in the second half.
• Believes adjusted EBITDA positive at $50-55 million annualized revenue.
• Full-year free cash outflow expected to be less than $12 million.

• Challenging market conditions for small to midsized biotech customers with early-stage therapies, affecting custom product growth.
• Broader market conditions and geopolitical environment still pose risks to business performance.

Q: Vivian from BTIG asks about managing biotech funding headwinds.

A: Matthew C. Lowell states that while early-stage small midsized biotech is struggling, they balance with later-stage and new customers, and the broad-based essential reagents segment is growing due to internal execution and diverse end markets.

Q: Steven from Stephens Inc. asks about RUO+ initiative.

A: Matthew C. Lowell says trends are as anticipated, with RUO+ being a good solution for bridging to clinical.

Q: Brendan from TD Cowen asks about biopharma spending priorities.

A: Stephen Gunstream talks about modality shifts towards less risky modalities and later-stage therapies continuing.

Q: Matt Larew from William Blair asks about customer spend and sales force.

A: Stephen Gunstream mentions commercial efforts attracting new customers, with brand recognition helping, despite macro environment impacting spend per customer.

Q: Matthew Parisi from KeyBanc asks about catalog and clinical solutions.

A: Matthew C. Lowell and Stephen Gunstream discuss catalog growth above mid-single digits and clinical solutions lumpiness, with clinical solutions in $1.5M to $2M range currently.