NSTG - Earnings call transcript Q2 2022 | NanoString Technologies, Inc.

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Operator

Hello and welcome to the NanoString Second Quarter Operating Results. My name is Katie, and I’ll be coordinating your call today. [Operator Instructions] I’ll now hand over to your host, Doug Farrell, Vice President of Investor Relations to begin. Doug, please go ahead.

Doug Farrell

Thank you very much.

me well Brad CFO. as with and our call as CEO; Tom the today Gray, is President On Bailey, our today, financial of our we the Earlier quarter second results XXXX. for released

and penetrating make related During objectives, and this about and factors, factors, regarding the pandemic expectations projections, planned operating future our that COVID-XX forward-looking, orders, our impact and addressable the instrument other including financial of expanding statements the and as call, statements recently are growth markets, may future we and current strategic macroeconomic status for trends focus and development of anticipated well as prospects success offerings. product and

Forward-looking in statements including uncertainties, filings. to those and our are described subject risks SEC

we in update forward-looking results undertake no Our call, differ the and results discussing may obligation statements. XXXX any and materially our Later will projected, from be Tom financial guidance. to those

We described press have adjusted missions supplement calculation non-GAAP a all noted. call, GAAP The of will GAAP detail selected measures, financial be in unless the financial prepared Throughout the as otherwise which in are measures. release. our

opportunity I'd of like a to the UBS of include both week presentation look Conferences. and reconciliations or [any] forward find financial in non-GAAP investors their also measure and everyone there. to Financial be the models, our Relations this many with remind to measures, posted Healthcare of each Investor to adjusted release. for other GAAP the and that data. Canaccord home that description, can You limitations, you as the well rationale press afternoons page under participating and exhibits in [ph] using non-GAAP analysts speak we'll measures With selected having as We next of we with Information tab

the call over Now, I’ll to Brad. turn

Brad Gray

we I'm for XX% booked guidance period shifted Molecular our our and base, midpoint about Thank spatial demand strong even sequentially. We for solid revenue to approximately underscore current currently Imagers, spatial expanded rather biology report generating revenue. revenue set from a platforms instruments, QX for Good execution. quarter, our CosMx our and year-on-year us. of joining We've have pleased an orders order afternoon results achieved commercial biology customer building NanoString These spatial continued towards and while strong up our thank results which than you, improving strong our our during QX in leadership growth novel rapidly Spatial increase as backlog for second beyond. our a of which XXXX we're and you Doug. mix biology and XX in XX%

I'll market. dynamics During over towards the our balance provide then of our review to and of to commercial the in call results, today, strategic execution handing our year. outlook an I'll the seeing we're the the spatial of overview our the an details Tom our update the before provide financial on call progress objectives that and for

long-term instrument steps roles Our into pleased year. third are Members both to and more the and continue the short execution sales and progress expected opportunities. team execution. the to the commercial settling of during We're to fourth are quarters effectively our and sharpen rounded are team behind is the the their taking rigorous across of improve managing new with commercial we

XX NanoString XX% for of had the terms in led and a focus key we During abstracts, was accounted including posters. the spatial and June, presentations meeting content and showcasing a of successful biology XX customers all CosMx. our at annual about AGBT showing scientific where scientific for field

platforms, virtually. conference and to researchers The the community hosted the which spatial Note also dynamics Station have which than here who biology. another marketing plus also attendees market our standing XXX only research this product more degree room a new rapidly imagers participated new the category Annual We AGBT several spatial crowd drew as come in being Orlando educated focus. Fourth Against Summit, CosMx cell is backdrop, our eight are SMI. primarily of of into regarding single that XX same companies highlighted

spatial will land competing instruments. for we're measure pace platforms phase spatial to progress a researchers graph, orders is future development as to in their The companies and power during way market commit of biology First, of simplest new this research. that biology the

XXXX. in result, spatial feature to guidance orders the prominently As balance instrument total reporting our will begin of a for and biology

the well Second, for equal customer established finding vendors the orders embrace in the imagers single cell Rather trend, SMI our that even GeoMx marketing or combined of for we're to NanoString so than this is fight this interest is rapidly CosMx category. orders our DSP. result for many it. energy increasing be greater volume we product currently of This to market than

revenue We are to and an CosMx expansion opportunity our NanoString. represents an community's or a to a either pleased one system valuable equally platform, and place a for GeoMx as commitment equally resource

for all Blue experiment might and scientist is design. whole profiler Illumina, Leica, believe land-grab. any complete NanoString including spatial suite, partners, to by most well-positioned [indiscernible]. supported This high-plex compelling that importantly, integrated Transcriptome imager a spatial spatial a and with that biology includes that the portfolio biology of the offer a researchers AdCann provide can solutions Third informatics we Chip biology and We portfolio win a with ecosystem virtually a a solution provides cloud-based

the provide and to like an products individual which to I'd update tied on our portfolio. our the strategic Now, year, are objectives for

broadening to DSP bio, Our GeoMx drive adoption and first discovery, multiple objective mainstream, further across translational research. of areas the into is

this spatial continue biology whole about popularity sequentially, our a through and of included historical and GeoMx placements. popular of for annualized application, with GeoMx orders, for seamless, NGS new CosMx target for on as quarter, ecosystem analysis reach was our a researchers a into the translational [ph] our the represent expectations. XX% XX% us. driving who demonstrating an of our while seasonal RNA all were and for primary adopters. with cancer discovery researchers record base, $XX,XXX early Most whole of NanoString [channels] three GeoMx. per consistent Consumable went samples represent GeoMx, Transcriptome In Transcriptome fast beyond spatial downstream launched and about for planning were About researchers Two-thirds platforms. consumables bundles result of push market that a will increased most experience employed in cloud-based We one-third basis second the both several Illumina of system systems our that GeoMx CosMx During expand system and May, workflow GeoMx both analysis are the to the XX% bundles in a improved grew cost using instrument system, platform customers the feet. revenue prepared who GeoMx and Illumina's who pull an Instrument integrated customer our simple, run This as includes well using customer new processing new GeoMx – improve to on spatial solution assays as believe to and be customers experience. NextSeq jumping tool, XX% button included of data platform. end-to-end productivity to nCounter. the of process [indiscernible] that many accounted these instrument readout automated

have customers Our productive. already GeoMx tremendously been

And of they had publications in QX, more. of published another GeoMx. end XX As July, using XXX they added the approximately

GeoMx new new increased XX% entering as to GeoMx indicators biology are date. the funnel has we orders leading execution, access drives improving that year year positive half from funnel for opportunities for in to as between see GeoMx Based instrument of to to pace and sequentially our split QX have on sales continue Orders even expect and of well. increase driven QX. program commercial instrument the adoption test GeoMx through We about spatial second technology the evenly our GeoMx about the CosMx.

that The CosMx undeniable took GeoMx. leading to biology orders breadth from with in Reflecting cumulative regarding two-thirds our and customers continues that objective the customers to are appeal is between of XXXX point around we who expectations. orders excitement first from CosMx fact the our interest from Our who come in time. NanoString platform. imaging are launch. of the for than excitement have as of same ecosystem seeing the evidenced more second platforms by QX, is CosMx tremendous about as adopted GeoMx also was The spatial for also We at the its the double generating synergy XX exceed our systems the launch pace CosMx that CosMx, our molecular engaging

of and is trends demonstrate came new During orders biology orders the from outside XX% than working of the CosMx spatial applications. helping as oncology Half of immunology, other these more came and areas CosMx of quarter, These a host that second land-grab. customers. from researchers win such neurology,

choose challenging all proteins, can imagers, now several performance RNA, FFPE robust the amongst best-in-class including [ph] quality, While with metrics, CosMx and leads done molecular capability tissue. to image [highest-plexed] data researchers

customers for data support planning XX% reputation, commercial instruments track many have a order offerings, these to future have their commercial CosMx are Although provided remain via our drives About CosMx we're resources. an system for instrument, financial to of test product may CosMx on we to We applications customers for and beta brand first CosMx QX. allowing access month. cannot test emerging that customer to ship this technology Meanwhile, more while promote week, ecosystem portfolio, shipping begin are channel, to specifications companies this shipped seeking our entrants Earlier match partnership during to program. others drive brand two already our scores. other these generated

is to for is an AtoMx and storage Spatial to objective scalable and use that strategic image and cloud-based compute Platform. for first launch highly enables easy visualization, both Our CosMx analysis, GeoMx. Informatics AtoMx year solution our global collaboration, data the capacity

that of structure this biology ready to and important feedback that addressed showcased limited We machine launch approaches. the the AtoMx competitors. Research an uses In appreciated we and more fall. a and be learning was NanoString's datasets, artificial our portfolio meeting large flexible AtoMx outstanding. addition, during examined AtoMx and and managing was intelligence challenge of offerings using believe the anticipated AtoMx we provides differentiator We between spatial data during to customer plan AGBT

XXXX be both for franchise. is solution a collaborative Our can new is nCounter In for ROSALIND, nCounter analysis received, been data comprehensive our Pro, supports by growth that and we especially biopharma well and our These incorporates with business platform. which continued a have paired to customers. easily enhancements innovation. foundational fourth our channel cybersecurity objective global our a introduced April, sustain nCounter

We panels to of drive to continue outside adoption [cancer] new markets [ph]. and introduce

which nCounter channel, five collaboration this areas. the we developing integrating is our disease of and many launched leading our expand some disease for the This spatial of therapy cardiovascular are portfolio subject we'll a across most applications also and thought therapies gene the of institutions. application promising cell generation the These into now next We'll be considered platforms. quarter, for

call financial results our turn of the Now, the outlook. to I'd like over and details to review to Tom

Tom Bailey

all thanks and Brad Thanks today. us for joining

spatial more XX than was GeoMx consumable an system. of systems. about per of spatial CosMx of product The consumables $XX.X second XXXX of revenue systems XX than $X.X At base was QX XX% to revenue approximately about compared GeoMx XXXX. $XX including million. and Orders of of annualized million. the sold QX, systems as GeoMx QX revenue of were during was the GeoMx systems $X.X QX GeoMx million revenue and and instrument biology QX, quarter biology XX approximately comprised installed end XXX million, during was installed service We our XX more sold pull-through $XX,XXX increase instruments.

million. over For $X revenue bringing cumulative XX backlog over backlog $XX approximately total new revenue QX to about cumulative CosMx, our in our added in CosMx CosMx orders XX in our orders to system million

growing to of begin expect order start recognizing book from our We revenue at material XXXX. CosMx the

service revenue installed business, XX.X revenue annualized biology our platforms revenue Consumables all For QX, was includes nCounter consumables instruments. inclusive base QX nCounter X.X approximately the revenue was X.X XX.X spatial million. billion. Instrument was pull of QX contract revenue million. revenue for for Service all cap nCounter system. through At was and was million approximately of $XX,XXX service, our and end installed X,XXX about all which was

non-GAAP exhibits based commercial expenses, was launch groups. margins and Turning Investor we're to making full as items. in Adjusted on adjusted the expansion webpage provide compensation, or our adjusted to depreciation, support SG&A investments and gross force, primarily information impact as last service, non-GAAP R&D Relations investments million, well or stock by compared of to driven spatial posted million, flat measures the decrease XX% our impact other year-over-year made gross margins was and margin are XXX adjusted the advance capacity how in year-over-year year-over-year. the our of our refer by XX%, we of the a Due and to certain the The have year, year-over-year release, SG&A was basis manufacturing to our basis, CosMx. and increase change results expense customer XX.X adjusted was of was initiatives, I'll a for press of including QX Please our on an detailed run biology driven removes of in increase prepared. rate as which mainly commercial of XX.X in sales of expense points related

Our were and of adjusted XX.X and million EBITDA was June cash XX. equivalents our loss as million XXX.X cash

Turning updated reflect mix sales biology full-year of an outlook to expectation XXXX to spatial improvement the guidance, we are and our of current of system updating of pace orders our execution. expected

receive orders biology in about systems, previous for For May. spatial XXXX, we guidance consistent now as XXX expect to with updated

GeoMx to CosMx this of of orders CosMx, for XXX spatial our the orders. expectation has. comprised system now GeoMx, approximately our total year XXX We AtoMx our system system view the approximately number AtoMx While unchanged, biology is be at orders expect

update, and about GeoMx CosMx about As to our compared orders. orders last XXX which XX reflected

not XXXX have recognition revenue in We any guidance. material CosMx included our

a adjusting system $XX As revenue order full-year million mix. XXXX we're spatial expected result, biology $XX our updated our expected to to reflect million to

estimated of range to previous $XX,XXX for pull unchanged through full-year GeoMx Our from our is guidance $XX,XXX.

to kind to previous $XX to of $XX,XXX also million of $XX $XX,XXX, full million, an through pull our continue expect We from estimated guidance. all year-end unchanged revenue of

$XXX now biology updated revenue, million system million record $XXX to of we XXXX, total the expect reflecting For expected orders. about to mix spatial in

XX% will expenses. expenses, of to and reiterating gross we full-year our to Turning the margin, be operating adjusted which in range guidance margins we are XX% and expect previous for

updating are $XX range loss $XX a $XX We to $XX adjusted EBITDA our expected million million of to from range to the therefore XXXX previous of million million.

to quarter, $XX spatial revenue expect growth about XX% third representing about consumables, an GeoMx $XX only revenue $XX million the XX/XX approximate and orders to GeoMx biology of $XX systems, will Spatial revenue $XX which of QX revenue nCounter from include biology of to year-over-year XX million in CosMx. we million, total and million. For of and to million book recognized million mix for with $XX

our would to XXXX. representing XXXX received CosMx XX about comment entering combined like expected the on in XXXX The in orders bring I'd setup [ph], revenue [XXX $XX to about CosMx cumulative backlog. we Finally, for orders orders XXX million with of XXXX total]

continuing provides to XX%. substantially growth of sight of backlog we accumulate XXXX, of recognize to for During expect additional all orders, which this revenue than instrument CosMx line while XXXX more

Our and we while growing have and our we confident market our to spatial achieve remains position. flow resources be balance continue strong sheet cash the to share sustaining breakeven, leadership and key investments biology

the Now, closing I'll to over Brad for turn our call comments.

Brad Gray

Thanks, orders current for yet financial Tom. strong best position. to biology CosMx shipping, spatial is outstanding ecosystem, our is biology based our not revenue future instrument ongoing will portfolio, the We winning believe and and reflected the position Because progress growth properties stronger and XXXX. unique of of market growth spatial setup and our rapidly grow continue our valuable the NanoString our the in on most broad is land-grab.

questions. for Now, like open your call to the we'd

Operator

first Catherine Please are are ahead. Schulte ensure Catherine, Baird. from to go question hear we you line comes Please your Catherine, is [Operator you. Instructions] unable open. lately. muted from The Unfortunately,

the So, question. Kyle, go the from will move question we We from ahead. Kyle next Canaccord to next Genuity. take Mikson please

Alex Vukasin

Vukasin. update. Alex for the Kyle Thank I'm Mikson. Hi, on for you

the competitors some that won't given to of recession could the so this are Other you. hinder So, cost also, performance had so, Thank commercial you some indicators, launch? recently. of you the on CosMx cuts provide of the I plans cut moving their cutting if color why just was commercial if quarter. some costs, confident curious, Also, workforces some your make during team to

Tom Bailey

questions. the for you Thank

the together with and I'm start well quarter, also while that current were the continuing to. in me seen We've they're pleased really on in short is management teams the the We're into in performance. I'd color saw business we They've closing a future position commercial meaning playing improvement specific January. commercial long-term effective One, quarters. the both opportunities, in QX. of seeing let transitioning the funnel assigned roles new all more to that particular: their execution in in the with assigned now training. highlight for through well work gone that commercial areas each develop team both First, two back

are, performance do that we're basically approved. those performing making our expect I a to our account as from are that to consumable seen accounts sales as half. transitioned in which second that just that individuals. improved our accounts and areas performance we're biology in and Two first our were learning as to that from from who the us has spatial in normalization I'm sure most junior one this the reps backgrounds continue equally. for who the curve looking become performance quarter be sales looking been So based and sore instruments to come have sure substantially also managers to managers selling begin of improve finally, how field account are instrument up cutting We've consumable in quarter they the other, as at particular our still the second real who a will. are effective the And performance rep for was point background during types improved

cut second progress, on does people infrastructure to have overall, this that still come. the your costs not but at believe there's I'm with pleased and On commercial question, plans We So more time. staff. the right we NanoString to have

the with CosMx year base we'll through second run and nicely this our through XXXX We particular that to half in the P&L. enter expect when to of large that begins revenue grow into of cost backlog

we for no plans this have time. at So, cutting cost

Alex Vukasin

good Really there. update. that you Thank much color so for

testing timing. just I eventual AtoMx, updates, provide most things. and one beta was launch the guys and about And also on some if take typically, at you that's could the Just high okay. look level more a curious the if question,

wondering So, the you space? you. this some differentiated the Thank in we that always of workflows, helps but seeing from streamline could you have from this exact in was ways this competitors portal I highlight portals [indiscernible] cloud-based what if we're which

Tom Bailey

to advantage data can't Yes. amount underappreciated competitive biology These that large Well the solutions NanoString. the spatial around we that from AtoMx making other. an researcher other that is emailed to is cloud-based are platforms datasets NanoString for is produce. of think investments massive so manage easily in No one the are be that's provider

create workspaces can to on need is separate we platform. can the biology datasets. will analyze, NanoString's multiple of So, a the visualize, be analyzed two store tie stored, spatial their AtoMx and importantly in, single, users manipulate, desktop where dial in into cloud instrument basic also the sort where same informatics all platforms together,

AtoMx the to and So, simultaneously far to ongoing, we as this will basically quarter CosMx, with slated been look there's and on. goes is of Beta sharing year. excellent. launch the shipment of in forward time which testing feedback more fourth commercial has happen so

Alex Vukasin

Thank much. very Excellent. you

Operator

Brennan from question Cowen. The go next comes Dan Please Dan. from ahead,

Dan Brennan

Thanks guys. GeoMx. would for one on just the here. first Great, be I maybe questions guess

pull-through now half second numbers, given getting visibility the with to the year? jumping on right your of off numbers point what's For full-year the the first half

Tom Bailey

Dan, is consistent for we seasonal seeing year. pattern think saw we're pattern right as quarter, pretty now I the with last that, the last seasonal the in commented we've that that

a to for $XX,XXX the and our in you pull-through assume or gets full-year. seasonal XXXX like you that giver pattern $XX,XXX saw in to percentage change QX and take if QX you So,

Dan Brennan

Got it.

color know, some kind which how of like, And which Okay. kind nice, you jumping a, some – gave know, really good give co-exist the you a mark, GeoMx, you thinking products big at showing how about, we know, someone momentum, two is point shift is us but the color we XXXX? these what into and expense towards of order CosMx, some maybe question in for you're XXXX, as the around off do about could on you or here GeoMx get of, think you how cannibalistic of complementary terms

Brad Gray

were market for that Transcriptome Brad, whole imaging categories, one. that first the GeoMx platform is their we estimated CosMx, When we total addressable characterize category is said cell I'll and take the about ability the there and to equal. different both category these, worldwide from about these Dan. This both long-term two We look profiling single Yeah. product capabilities, two on cell the that could own labs in systems resolution the get to would ability that GeoMx and need genes on of most single X,XXX at all that CosMx. labs

say safe instrument to resolution biology just underestimated cell think that the their researchers how to I we spatial that appeal first of to quickly them have single CosMx and for purchase. it's would shift be

news that's seeing competitors reinforced about by right We're non-spatial has years seeing those are indifferent is any to what detailing which been two the excitement all capability. excitement of now. The resolution. for instruments great on different That researchers by whom basically So, that cell in lot this of order. market, that of single NanoString marketing customer of chooses a and eight biology we're we're between,

talking one going not of that this because to a spend interested somebody do are We out GeoMx, then just who's and CosMx year. revenue time in the recognizes

with an We to platform their and come lab years get second happy the in other many cases, first of them will in we sell subsequent are a platform. that into expectation back our

the us predict. enter will base GeoMx platform. than installed mix for So, both hear biology in to as versus instruments project be growth basically minimal rather indifferent XXXX I total to that us is XXXX, CosMx that has going to the recognized think difficult talk about XXXX, revenue you're spatial And to mix. individual trying we taught

[RevRec] normalizes we that's GeoMx it has systems, [ph] that less. think know, time ahead winded and will instrument mix and opportunity lines saying these their remain long that's mix across second over equal matter you total in product the a less about tremendous these opportunity that way half expect the of that and of should the in we as So, that

tuned. stay So,

Dan Brennan

amount those have you that think expect like? now conversation there a don't that a is owners, GeoMx follow-up – And with where GeoMx you've seeing you evidence? could talked Although, have do any CosMx those some What's but orders orders, a GeoMx? from seen early now, lot fair you about CosMx, a three of just through are you quarters

Brad Gray

outlined I either my a a made time. we as Well, investment sold, XX a major bought bundle system large the simultaneously biology purchased they the that remarks, have they time spatial systems CosMx or the prepared in in cumulatively in a at GeoMx first over as for approximately that fraction

done it possible think and a NanoString who using lab. went have single These for They in business. cell to that have quarter I and is traditional really past who both biology GeoMx their spatial. be had our systems biology make of never recent cell didn't to go us other that resolution XX% to shows in NanoString nCounters place very spatial the tended droplet of CosMx biology they oriented In most from eager though, lab systems. are are to that approaches So, didn't get and spatial in single customers providers with whom researchers the based

seeing we're for base as us the beyond opportunity So, to our well. expand traditional installed

Dan Brennan

sneak Do mind, … one in if I could you

Brad Gray

lot cannibalization more one long-term. just think of piece be the color to helpful. whether the is question about think that CosMx I a cannibalize likely GeoMx in me could let and to We add Dan, of

of the in and the of of who close CosMx see we've we period. opportunities to that the to the GeoMx to number slowdown the a year-to-date and of see that basis, is the the which new CosMx On to CosMx a If same our that we are opportunities relative on put fact customers kind in GeoMx and funnels. keep new One rate added funnel GeoMx not a the of are added cannibalization. that our increased interested rate funnels of here GeoMx in being at are about We slowdown. opportunities metrics eye be versus and an would has year-on-year substantial started we've number equal indicator new do

a the are labs and I and need the most then underscores both the to be think businesses that these likely single cell vibrant idea both long-term, whole will instruments capability. that in of Transcriptome

Dan Brennan

but down CosMx more the coming Right. underestimated, up going But is maybe fact is down for inching or year fair that that step what's just this you point, year, salesforce is year, overestimated you this to were to ago? the or GeoMx a data versus capacity GeoMx is just that's know, where for maybe or that, GeoMx we quarter one why, it say due number catalyst but this it you follow-up, that demand the is for the the

Brad Gray

about it as So, opportunities in think instrument total year. we the

at since a previous May be instruments. guidance, look guidance, period which seismic instrument about XX about that XXX systems. our sell systems, GeoMx about that CosMx if with would that will consistent same [mix] the the and changed and become that thought guidance XXX was it's that this has it implicit is clear XXX At XXX XX we time, year So, XXX systems What you and mix, XXX be a is and GeoMx than [ph]. instrument rather we'd

eight And One the at in a in very previous productive mix, answer the are single I very a and volume is, systems. winning, of of right that been single demand. providers overall several now spatial think a to biology a share format this solution in biology the time has year, bunch spatial the towards a and misjudged said, would as fold. tilted area of NanoString marketing the more there's least question, cell reasons waiting and which biology, there's that biology happening science product provided customers coming of of the for space and are admirable lot I is a point but think that's cell that I of market whole So, total in a non-spatial is instruments and for who for with say, to we're two we properly we demand the I during spatial estimated the is category at

Dan Brennan

Do last maybe the know, you there'll into you for get Salesforce CosMx, as be you many today? concern making? but, inertia in you for I then these expect in and know in do the XX is right And market be a position AtoMx in that get feel from say, we a product know, you you growth? there kind you're it. do know, market now, of Are Got the back relative and more of share to players your, that, the leadership like, months yet or like, the I'll the expect decision there's just the months that so queue, to will with, one, players out, and of set, some lot you see but XX degradation going like that? go be any from be you're seeing to and

Brad Gray

So, opposite, quite the Dan.

participants. reinforced over I no this will elaboration success like leadership of will of position meaningful there'll may a some entrants NanoString the market and our of those. smaller be time, number product And be standards and grow a I market, the NGS the one stronger through that, and think longer believe be in our of small market pipeline. around consolidation absolutely be in that

You in right publicly months units. CosMx sales about XX GeoMx cycle ago fast. even most here is incredibly out terms of on weren't We, the the of Imagers, course, and on now talking this know, number quarter of selling really are we platform in recent

has being space our believe with in reputation that both to ecosystem. NanoString’s brand with its We the very platform. customers Our superior do about and are choosing specifications overall decisive and

Dan Brennan

Right.

Okay. guys. it. Thanks, Appreciate

Operator

Catherine Schulte from a from go Catherine. ahead, is question Baird. Next Please

Tom Bailey

Catherine? There

Operator

to Catherine's on lost the move appear We have question. just line, to we'll next so

have from from Tejas Savant a Morgan Stanley. We question

Edmund Debler

on Edmund This for the guys. is Hey, taking Tejas. Thanks question.

any them new reps into in are want the that gravitating seeing played mix this having kind you versus CosMx, but I'm what you're of are just and portfolio, expected, wondering parse of Just today? products the the think balancing just sales – problems drove can't CosMx of I to that guys previously GeoMx. GeoMx’s more towards and I behind to of have were out, I understand dynamic said circling if I excitement that back some CosMx

Tom Bailey

commercial good a our of great to execution follow-up a and question That's some improvements.

we those the During the disappeared between gravitated first largely a to quarter. to our quarter, GeoMx in reps those sales did who second That bifurcation CosMx. within who and see selling selling force bifurcation reps gravitated

sell training is CosMx platforms, outsold every these across second overall net, All each repositioning reps but of of work slightly platforms, net, GeoMx and to that rep are quarter, but our know successfully. success we feel enjoying platforms both through the of our and positioned during you

suite, helping lab. we as from CosMx In what of them I a we're to as sales go fact, really the a it's platform about a spatial spatial call, for that customer imager or system now, our have of a invest most right GeoMx well talking in able in in discussion both of the strong either now. navigate science and sales dramatic position the NanoString very or because in that the wouldn't profile it call an we call, customer the systems enter biology successfully time are sales a leading category, a perform reps that And is wants the first type doing that's which when

Edmund Debler

I shipped it. shipment June. August, you back instrument in a then, caused that was believe on I circling for that Brad, to for CosMx, Got in here? your initially beta And comment if what was wondering planned the can delay

Brad Gray

delay, cause would what the of customer. the be of the caused delay Actually, primary availability the

install customer's the we several to customer to the vacation system that of in train, that have imagine, as customers start want in attention When time So, and utilization can the the August? to going that get for go install, best system, and particular to to we summer. full weeks of was you on many

Edmund Debler

them these spatial And customers, cell researchers, of to it. XX% that and then workflow are the to single the That comment in was performing cosmetics back XX% makes of I orders of are typically most earlier new CosMx, guys wondering about, customers these profiling? sense. how ordered to quarter, recent just of currently went out your Got many NanoString

Brad Gray

but That's at are investment systems minority. customers new it's their new of stage, in profiling guess a our don't any so is mean, a a who making buy that I would that spatial first this most I that capability. quick answer good have I question. to

would expectation adopting it number that a my doing So, of for spatial be first the relatively small profiling time. are most today and are them

Edmund Debler

Super it. the helpful. you Thank for Got time.

Operator

a Please question Dan Next, we from with Arias ahead, Stifel. Dan. have go

Dan Arias

Thanks questions. guys. the Hi, for

Some dial-in issues here.

the the of on outlook that a that on Brad, But is bundling anything role a product So, apologies systems what in you're two if playing service you've GeoMx? And these. to the is and there driving? extent in the pricing orders reflects change touched

Brad Gray

the XX% for I'd the quarter the for plus GeoMx an orders Hey XX% of has probably Dan, during that were of questions. say, was become important About us. GeoMx the XX% thanks of bundled. Bundling CosMx XX% tactic orders.

on us. franchise, and see to really were spatial people a kind sign that. of that's biology down for the great We're NanoString So, doubling happy

they In a a fact, a from as buying we questions when than with of GeoMx ended buying before, more CosMx with GeoMx dialogues a cannibalization cost. the customers that further answer a where time CosMx up they some to bundle look a in ended GeoMx than at began as switching rather not, dialogues to up

cannibalization, it's another synergy. rather is indication great this So, not but that

So, bundling is helpful.

discount XX%. is about bundling standard Our

it our ASPs change So, the of not does materially platforms.

in And are second the of meaningful this GeoMx year. we any modeling half so, ASP for change not in

Dan Arias

consumables appreciate fixes, comments Okay. from your of on pull-through but just believe, that with and XX,XXX. on commercial but hearing was on Tom's you're overall issue, usage? seasonality, are was you like GeoMx, more about what I I It Helpful. for way customers team the an Maybe pull-through instrument sounds consumables

from is explain year? it the what mid-XXs last that the seems you to down So, level step for saw that

Brad Gray

Well, the systems step explains that is of that installed. down relatively first newly fraction the the are thing

As the issue pronounced customers their data very on fully Atlas some capacity in customers shows connectivity Transcriptome [indiscernible] storage that effective a deal large time compute are to auxiliary whole who system. This an pattern GeoMx often we've with running and that we our mentioned observed to with the require is those who the Illumina sequencer sets. for using quite and a more call, new require May

might the seeing. modestly we fraction is growth base that of is And that of has so otherwise pace too placement new, so, relatively and installed as suppressing our has and be a the instruments pull-through the throughout overall that increased launch,

focused building pull-through. the we play We up working see time working take going through site on initiative quarter, support that is we before of have terms to an the second to site in to modestly It how that's in customer improving activation it's workflow call activation, some experiments. in design but learning and what own average their on overall

Dan Arias

that. fewer mean, I you past. systems bit you just now push on Okay. you're in I were little I GeoMx if mean, a than the placing could

factor on the on the consumables be year GeoMx in the So, shouldn't would XXs now last the more I systems less you of consumables year. replacing impact pull-through? you're when seeing given and you seemingly in range were that a rate been the last mean, you have were it XXs range

Brad Gray

had very ought orders half, we to right. large volume all the you in of remember the second were last year Well, that

of not activation we the in work. plus, first normal into and quarter, sites that were how according installed XX instance, the the and for the had cadence fourth most that So of install, until those quarter – the them second orders activated to shipment,

instrument fact, in suppressing orders of are exactly are year that huge sites So, pull-through last bolus that the now. from

Dan Arias

the more would should you of? other manufacturing the be one we like Okay. there here. Maybe you sound run aware production would side pretty the constraints we're think that In that orders capability up hopefully just Is at anything against if at Q&A on since of trending into CosMx? words, nicely, on wise end they're you any would run all

Brad Gray

make to hard We're we working sure Dan very don't.

assembly manufacturer even small and for them so demand. contract our upward, and parts we're been for to the sure working having risk parts prepurchase that be manufactured of internal to [firm can volume are our [ph] that revised we has As systems instruments forecast] identifying very batches in been closely at fulfill the we've that with custom of able

chain but case. of sight that remains are at hard working to supply don't any have we constraint we make line the So, to this time, sure a

Dan Arias

Yeah.

answers. the Appreciate Thanks, Brad. Okay.

Operator

have Cowen. from from Dan a question We Brennan follow-up

ahead, So, please Dan. go

Dan Brennan

Hey, guys.

or maybe more. Just one two

expectation it's economy on any longer you from Just year global is the economy, anything the the here? baked seeing, macro, get seen cycle? the what And for the have to, worse or likely you of you Have into half back pauses you're given sales know, doing? anything given the

Brad Gray

Yes. category for product in the us. us. and noise. is played a China slowed certainly it growth scientific growing quarter in us opportunity tune the In a in rapidly overall the through that a part of are million for of China. to relatively like that $X a a without we $X.X our down factors spatial have is million drag is factor to region China on see biology, macro of a of lockdowns And business. probably commerce than outlook. activity The probably company. China current the for a NanoString's it as more a It's doubt small

in Europe that not of some seen the about. talked our have We challenges colleagues have

part do been not a there half guidance think relatively relatively modest and terms is our to one we're macroeconomic it's mix, I impact So, a but starting of expect in in they'll continue, what recovery improvement hope of our second think it's they'll the built has because us. continue. China I for small see miraculous a we into

Dan Brennan

cash cash [said] cash, know And positivity, I with about just that it. guess, the [ph] guys confidence talked Got have on in sheet then bit. a free I you little you the free getting spending you have, flow balance your

what the the and on a today Just burn or balance cash how remind and focus given pathway, just increasing do forward? we we capital like us rate your about kind move like preservation capital think that as of looks

Tom Bailey

Yeah.

revenue comments important see in that started of about moderating already and year of can into growth our entering do Dan with particularly big is had that growth where R&D CosMx backlog to flat combined most we've expenses that made XXXX, our with factor the next think in we're in expense with the and I consider we into year-over-year base you growing R&D to expenses. we've

to flow it resources and take to talked And and $XXX our we you more quickly than existing see balance about cash the you about year, get range. thinking need get you in there. It’s next in to when us get that plenty us cash to code we've still is, what expense revenue that adequate. to million CosMx revenue expected So, previously, where pretty the zip reach profitability. math base million get start to the are that would to for backlog breakeven our $XXX to you revenue within run We're over we have somewhere is the

Dan Brennan

know but on markets then headroom on And to the throughput think well? sounds as we a what I is it and CosMx about pull-through, final talked there since maybe could how just it. Got cosmetics at used good really unlock some one, for CosMx increase early, is GeoMx holder maybe it's think any that sample all like on color a about Thanks. the new case and place does, you've I

Brad Gray

yes. modeling there are to modeling on you purposes, to throughput we're position question to opportunities I'd increase in pull-through throughput utilization give the the of what until and actual CosMx that as the for a if begun still is similar answer whether to say is best Dan see answer possible, From we've system. Yeah, GeoMx our

techniques working are as expecting processed time that system. that more are would on you or allow on the on We that that on. goes number know, increase samples for weeks And, us to of

Dan Brennan

Great. Thanks, guys.

Brad Gray

Dan. you, Thank

Operator

[Operator Instructions] you so much. Thank

the any back hand closing to I'll now over So, our for speakers remarks. call

Doug Farrell

Thanks everyone for joining us today.

concludes please any Thank the or If of you the very callers, you our XXX-XXX-XXXX. available the that callers international call, hours did two The XXX-XXX-XXXX, miss next XXXXXX. there will in To please same dial so. both. U.S. dial is portion call, conference a call. be ID replay It's much. That for access

Operator

call. all disconnect today's That joining. Please Goodbye. for you concludes Thank lines. your

NanoString (NSTG) 7 Aug 222022 Q2 Earnings call transcript